Mr. and Mrs. Jones. Big diamond ring, brand new cars, huge house, high school kids both have BMWs. A part of you, if only for a moment gets the smallest feeling of envy before...ZAP! Your gut reminds you that the JONES family is probably living beyond their means, and may not have an ounce of savings to their name.
And you'd be right. The Jones family doesn't see a point to having an emergency fund. After all, that's what credit cards are for, right? The Jones family also views their home as an ATM machine that doesn't empty. Mrs. Jones enjoys bi-monthly $100 haircuts and $1000 purses, while Mr. Jones has every toy imaginable in his garage, and can't wait to sell his "piece of crap" 3 year old BMW for a fully upgraded current year model.
Their kids both go to private school, and every other month your Facebook news feed gets clogged with 10,000 pictures from their exotic trips abroad. Walking into their home is like walking into a Better Homes and Garden magazine!
So what don't they have?
What Mr. and Mrs. Jones don't have is a financial future. They are self destructing. Many lessons can be learned from our debt-ridden, over leveraged neighbors, but below are 5 takeaways to reflect on next time you see the Jones family around town.
5 Lessons We Can Learn from Mr. and Mrs. Jones
1. Life isn't about material things. Take the time to enjoy experiences, not things. Trying to be the "big shot" with the newest toys will kill you. Achieving financial independence is much more important than impressing your friends and neighbors.
2. If you need to buy something expensive, do your research and buy the BEST. There is nothing wrong with being selectively extravagant, but choose your luxuries wisely and sparingly. Plan, save, and pay cash.
3. What you keep is more important than what you make. Celebrate savings! Being a millionaire is much better than pretending to be one.
4. No, you can't take it with you... BUT, being poor and old sucks! Social security may not always be there for you.
5. One day you may want to peel back on working, and it would be nice to have that option available. Realize early on that becoming a slave to your job/debt/expenses is much easier when you are in debt. Put saving and investing at the top of your priority list, and notice the end of the rat race approach quickly!
I'm sure they're nice people. You may even have them over for dinner sometimes. But don't fall into the envy trap and seek approval the same way the Jones family does. Plan, save, and pay cash.
Peace and Love,
The Tortoise Banker
*This post was mentioned on See Debt Run and Control Your Cash.