There’s rich. And there’s ‘fake rich’. Of course we’d all like to be genuinely wealthy. But it turns out one in three Aussies feel pressured to live a lifestyle they can’t afford.

That’s according to a recent study by Finder¹, which estimates over six million people are trying to keep up with the Joneses. And it doesn’t always end well.

Holidays, homes, even memberships

The research found 5% of Aussies feel pressured to go on holidays they can’t afford, while the same proportion (5%) drive cars beyond their reach.

Worryingly, 5% are also spending more on their homes than they think they should.

Other areas where many of us are spending more than we can afford to create ‘the right impression’ include clothing, memberships to various clubs, and even the school we send our kids to.

Why do we fall for peer pressure?

Research from the US² shows humans are hardwired to try to keep up with the Joneses. The fact is, people care deeply about what their social standing looks like.

But let’s be honest, social media can play a role. We are often bombarded by images of people who seem to be living the perfect lifestyle. Who wouldn’t want to own a luxury car rather than a clapped-out banger?

And why not holiday in an exotic coastal retreat instead of heading off to the costa-notta-lotta caravan park?

Okay, these are extreme examples.

But Finder points out that social media has amplified the pressure to spend beyond our means through endless reels that make it easy to fall into the trap of comparison and consumerism.

Bear in mind though, what we see online isn’t always reality. A lot of the flashy lifestyle is built on debt.

The financial cost of keeping up appearances

The same US study we noted earlier found that when we look at other people’s lifestyles, we rarely consider how much debt they’re wearing.

Yet the researchers noted that someone trying to keep up with the Joneses may need to take on more and more debt to maintain the illusion of a flash lifestyle.

It can make constantly comparing yourself, and your lifestyle, to others a slippery financial slope.

The scary part is that the mounting debt can creep up on us gradually. You charge little things you can’t really afford to buy now/pay later or whack them on a credit card. It seems harmless at first.

Over time though those debts can compound and become a significant problem especially if you need funds for an unexpected emergency.

How to run your own race

Focusing on your own financial wellbeing instead of aiming to keep up with others, is a lot more likely to reward you with long term financial security. 

Here are a few simple ways to run your own race – and skip worrying about what the Joneses are doing: