Keeping up with the junior Joneses

Striving to match the lifestyle of family, friends and neighbours — and their kids — can be a dangerous pursuit, both in financial and emotional terms.

It’s back-to-school shopping time again, which means kids around the country — and their parents — are figuring out what to buy for the new school year. And, like it or not, assessing what your children’s peers have — whether in terms of clothing, technologies or extra-curricular activities — is part of the process.

Even if you are unaware (or don’t care) that “everyone” has an iPhone, or a Lug bag, or a pair of Skechers, or the new PlayStation, or whatever the thing is that “everyone” has this year — your kids will let you know. And, they’ll make it clear that they must have it, too.

I don’t know if it’s because I write a blog about raising money-smart kids, but this is the aspect of parenting that gets under my skin like no other. The “Why can’t I have X? So-and-so has X, so I should have it, too…” conversations make me see red. And my 10-year-old son, Adam, knows it. I remind him, in so many words, that a lot of kids his age — including some of his friends — don’t have all the things he has. And, that if he continues to focus on what he lacks, instead of what he has, he will never be satisfied. There is always someone else who has more.

Still, he can’t help himself. In part, that’s because “keeping up with the Joneses” is a natural human impulse. A recent paper co-authored by University of Alberta business professor Barry Scholnick even provided evidence of this, by looking at the neighbours of Canadian lottery winners. For every $1,000 increase in lottery winnings, there was a 2.4 per cent increase in the number of bankruptcies for those who shared the winners’ postal codes — that is, their immediate neighbours — in the following two years. According to the bankruptcy reports, the neighbours of the lottery winners got themselves into trouble by spending on conspicuous assets such as cars, boats and houses.

“If your neighbour is richer than you, you try and keep up by buying things your neighbour can see. The problem is, it leads you into debt because you can’t afford to pay for it,” Scholnick told the Globe and Mail. There is also some evidence that a child who grows up without siblings, either because he or she is an only child (as Adam is) or has siblings who are much older or younger, is more prone to “positional concern” — meaning that they care more about how they compare to others.

So far, the way we’ve dealt with the issue is to say no to anything we feel is too extravagant, and remind Adam he can save up his allowance and gift money if the item in question is that important to him. But this doesn’t actually address the root of the problem — the desire to have what others have, even when you have plenty.

I hope that by continuing to drill the message, it will eventually sink in, but I’d love to hear from other parents as to what you’ve found works with your kids.

Keep the conversation going

How do you deal with your child’s desire to keep up with the Joneses’ kids?  Post a comment below.

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.