Paycheck Chronicles

Fear the Joneses

House with broken dollar sign.

The Joneses are not necessarily the sharpest knives in the drawer. Let me stay out of trouble by mentioning that I say that only in a figurative sense. I know some very fine people named Jones and this article has nothing to do with them.

Now, back to our figurative couple. Keeping up with them is a never-ending battle. Don’t even try. That’s my thought for the day. I know it can be hard. Heck, my wife is going to be in the market for a new car later this year and I – even though I should know better – find myself walking through parking lots and looking in driveways for ideas. It’s easy to get caught up in the Jones race.

However, if you look around, you’ll quickly recognize that the Joneses are setting a financial example of what not to do. Follow their lead and you could end up in a bad place. Here are a few examples:

They are powering economic growth. With roughly 2/3 of our economy powered by the American consumer, the economy is in good hands. Earlier this year, personal savings hit a 10-year low of 2.4%. That’s plain pitiful. If you’re in your early 20’s and just getting started, you can probably get away with saving 10% for retirement, but most people have a variety of goals that will require even more saving. So, the Joneses and their 2.4% savings rate is a joke.

They’re playing the “how much payment can you afford” game at the car dealer.  Ever wonder how the Jones family affords that never-ending carousel of slick new vehicles? Maybe they can’t. Instead, much to the appreciation of their car salesman, they are stretching out car loans to the point where the payment is “affordable.” Every quarter, Experian produces a “State of the Automotive Finance Market” report. The latest indicated the average new car loan was over 69 months1. You know how averages work and that means there are a whole bunch of loans out there with terms longer than 69 months. Shoot for an un-Jones like approach, something that’s affordable with a loan of no longer than 5 years.

They can’t be bothered with life insurance. The Jones family apparently doesn’t need any stinking life insurance. Three kids, a big mortgage, a couple car loans and a lot of underfunded financial goals wouldn’t even phase the survivor if the unthinkable happens. That probably sounds ridiculous, but according to LIMRA, one in three people indicate they know they don’t have enough life insurance.2 The Joneses are clearly skimping, you shouldn’t. Check out the life insurance calculator at usaa.com/life and see where you stand.

They’ve got plastic in hand for the next emergency. In January, the Bankrate Financial Security Index survey reported that 61% of Americans surveyed would be unable to draw from savings to respond to a $1,000 unexpected expense. They’d be forced to borrow from family, sell stuff or break out the good old credit card. Another not-so-enviable trait of the Jones crew, but a boon for credit card companies.

Fear can be an enabler. It can motivate positive behaviors. In this case,  I hope I’ve created a compelling case against trying to keep up with the Joneses.  

1 State of The Automotive Finance Market Q4 2017, Experian, January 2018 2 LIMRA

2 2017 Insurance Barometer Study, LIMRA, April 24, 2017


JJ Montanaro is a Certified Financial Planner professional with USAA’s Military Advocacy Group

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