Hey all! We have a bonus special feature today! Ryan, from over at Arrest your Debt, is a super awesome blogger and one of the most supportive and engaging people I know on Twitter (seriously, check him out on Twitter, you won’t be disappointed!).
Ryan wanted to share a guest post about the illusion of wealth and keeping up with the Joneses for all of our wonderful Partners. And he’s absolutely right, most of our neighbors are icebergs! They look great from the surface, but the part you don’t see is extremely dangerous. Read on to find out exactly how your neighbor is an iceberg!
Your Neighbor is an Iceberg
I saw this image the other day and could not help but think about the facade we put on for others. Earlier in my marriage, my wife and I were starting to take control of our finances and spend intentionally. I was recently promoted but things were tight.
We had a couple of kids and my wife was a stay at home mom. We lived off of my sole income which made things tighter for us than our DINK friends (Double Income, No Kids). As we socialized with other work friends, it was impossible to ignore the lives they were living. I knew we shouldn’t judge people, but it’s difficult to avoid comparing ourselves to others. A close friend of ours was in the same stage of life with similar circumstances. The husband provided the income and the wife stayed at home to raise the kids. The only difference was he was a level below me and I was making more money than him. However, you would never know that by looking at us. I was, and still am, driving an older vehicle, yet he had a nice new truck and was constantly going on vacation.
What Were We Doing Wrong?
It really hit home when my wife and I would look at our budget each month and constantly ask ourselves what we were doing wrong. We did not have many extras; no cable TV, no car payments, no fancy extras. The only thing we did splurge on was a $150 a month gym membership which was certainly less than our friends truck payment. As we sat there looking at the numbers, there was no way we could afford what they had. “What are we doing wrong” was the resounding theme in our house.
To make things worse, our friends had satellite TV, a new house which was larger than ours, and they were constantly posting on Facebook about Disneyland and their other expensive vacations. Early on, my wife and I began to become somewhat resentful at the fact that we were unable to afford what they had. We didn’t resent them, we resented our situation and couldn’t figure out what we were doing wrong. Little did we know at the time, we were not wrong – we were more right than we knew.
Heading For Disaster
As time passed, it was evident that they were not affording their life style. They were an iceberg. On the surface, everything looked great and in order. But under the surface, there was a deep dark side to their finances that was quickly catching up to them – something we couldn’t see from the outside looking in. They were making payments on credit cards and starting to drown. Their mask was quickly being removed which caused them to hit rock bottom with creditors on their heels. They had no savings, no emergency fund, and no retirement savings. After losing much of what they owned, they are now just starting to pick themselves up.
They were living the life that many of my friends subscribed to. They believe that life is worth living in the moment. Why would they spend their young years saving when they should be enjoying their health and wealth? Unfortunately for my friends, it didn’t work out the way they anticipated. Life has a way of knocking us down at the most inconvenient times. As Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.” Don’t be naked my friends!!!
The Joneses Are An Iceberg
I grew up hearing that you shouldn’t try and keep up with the Joneses. That’s easier said than done, especially when the Joneses are not some figurative person, but your actual close friends. It is difficult to avoid comparing yourself to others when they are living the life you think you want. The truth is, the majority of those lives are in deep financial distress which is hidden beneath the surface.
The other day my wife and I were driving down the road when a younger guy in a sports car sped past us. My wife looked at me and said, “Awe, he must be broke!” I don’t think I have ever been more in love with her than at that point! She gets it – whether that guy was truly broke or not we will never know. For one, it made us feel better about our 12 year old vehicle we were driving, and second, the odds are he really was broke trying to portray a wealthy image.
If you find yourself trying to keep up with the Joneses, be careful. Remember what happened to the Titanic? If you try and keep up with this image, it will take you out at the knees and sink you. Don’t let the icebergs sink you!
As you continue this financially responsible life style, keep this in mind. When you become disgruntled by comparing yourself to others – realize, they are more than likely an iceberg.
Are you an Iceberg?
Do you know any icebergs or are you one? I reassure you, you are not alone! Comment below, I’d love to hear your story about where you have been and where you are going. I would like to give a huge “THANK YOU” to @partnersinfire for allowing me to guest post on her blog. Stay safe my friends -you work too hard to be this broke!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.