5 Financial Strategies to Beat the Joneses

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You've probably heard the old saying, "Don't try to keep up with the Joneses." It makes sense: If we are trying to live large in the context of the spending habits of those around us, it can be very easy to overspend, accumulate debt, and dig a deep financial hole. This is especially true when we measure our own activities against everything we are bombarded with in the social media arena.

However, there can be a place for this sort of social benchmarking, so let's turn that phrase on its head and provide a few different examples of where it makes sense.

Here are five areas where you should aim to keep up with -- and do better -- than the Joneses:

1. Save More Than Them

The most recent numbers from the Bureau of Economic Analysis put the U.S personal saving rate at a skimpy 3.5%. That's simply not enough, whether you are putting money away for emergencies or longer-term goals such as retirement. It's definitely not enough if you are trying to do both.

To get ahead, make sure your goal-oriented savings and investment plan carries a lot more punch than the Joneses. According to a recent report from the Federal Reserve, the average American retires with just over $250,000 accumulated for retirement. These are two benchmarks you should crush.

2. Carry Less Than Them

According to TransUnion, the average American with a credit card carries a balance of just under $6,000. These days, with interest rates on the rise, it hurts my head just to think about that. No good comes from paying 20%-plus interest on a credit card balance. Beat down the Joneses by creating your own plan to pay off debt.

3. Drive Less Than Them

Yes, driving less could help mitigate higher auto insurance rates, but with the average cost of vehicles skyrocketing, what I really mean here is seriously consider driving "less" car than the Joneses. Over the last two years, the average loan on new vehicles has increased from around $35,000 all the way up to $41,000. That type of increase is putting strain on families trying to build reasonable transportation costs into their spending plan. If you are in the market for a vehicle, make a decision that won't handcuff you.

4. Prepare More Than Them

Prepare for the bad things in life. In a USAA survey earlier this year, roughly half of the respondents didn't have life insurance. Bankrate published findings in January that 43% of Americans couldn't come up with $1,000. In my experience, people choose a $500 or $1,000 deductible for their auto insurance. Do you see the potential disconnect? I hope everything always goes smoothly, but I know it doesn't. Building an appropriate emergency fund and maintaining appropriate insurance coverage is how we can prepare for some of the curveballs that life throws us. Do better than the Jones family by safeguarding your family and property.

5. Plan More Than Them

The Joneses are not planning. The 2023 Schwab Modern Wealth Survey found that only 35% of Americans had determined their goals and documented them in a formal plan. Ouch. If you haven't, I would encourage you to do both.

This article has been all about benchmarking yourself against the mythical Joneses. However, being able to see where you stand relative to your own goals is critically important.

So, you heard it here. Maybe we do need to keep up with and eclipse the Joneses. Thanks for the inspiration, Jones family.

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