In the second episode of our Open Money podcast, we talk about “keeping up with the Joneses” and the financial decisions we make because of peer pressure and our desire to fit in. Bruce Sellery and Blake Carter talk about the consequences that can have and offer strategies to make you less susceptible to financial peer pressure and more in control of your finances.

“Keeping up with the Joneses” is a popular expression that refers to comparing yourself to others and trying to achieve or own as much as those around you. Being concerned with status in society is human nature, but it also can land people in financial trouble when their desire to keep up doesn’t match their economic reality.

Bruce Sellery is the author of the bestselling book Moolala: Why smart people do dumb things with their money (and what you can do about it), as well as the host of his own investing podcast and a money columnist on CBC Radio, MoneySense and Cityline in Toronto. He believes that knowing yourself and what matters to you is how you cultivate a personal shield when it comes to social pressure and your bank account.

“I think why we’re so susceptible to peer pressure is something grounded in being human,” Sellery says. “We look to others to validate what we are doing in the present.”

Blake Carter knows all about that kind of journey. She is a radio and TV host in Toronto who found an insecure relationship around money paired with a high-profile career made her bank account very susceptible to that “keeping up with the Joneses” effect. She was using money to portray a life to the outside world, but the problem was it put her into debt and unable to absorb financial shocks such as having a sick dog.

“You definitely overspend to keep up with the Joneses, especially coming into the media career that I did,” Carter says. Starting out, she made little money but still had to be visible at live events. “Then social media started … now that means being on camera every day, doing your makeup, which costs money, getting your hair freshly done, having cute outfits, especially as a woman.”

She learned to question purchases more closely, realizing a coveted handbag would likely end up in the back of the closet or spending $500 on a dress for one short event would be regretted.

“The very basic things you need to do begin living within your means, so your income needs to exceed your expenses,” Sellery says. If it’s not, that means not ordering that takeout or buying a new blouse, for example. “Number one is cash flow. Number two is eliminating your debt to zero every single month.”

The ease of credit cards and powerful advertising can also make saying no more difficult.

“We have all these inputs of consumerism coming from social media and advertising and digital marketing … that make it very difficult for us to make choices for ourselves about what makes the most sense for us today and for the future,” Sellery says. “An ability to discern what is going to make the biggest difference is a skill we need to develop.”

One framework Sellery uses as a guide when considering how to use his money most wisely and be more free of financial peer pressure is from a book by Stephen Covey called The Seven Habits of Highly Successful People.

“In the book, he details a framework that includes our circle of influence – the circumstances, issues or problems that we have indirect control over – and our circle of control – those circumstances, issues we have direct control over,” Sellery says. ”It is so powerful for us to focus on what is within our circle of influence and our circle of control when it comes to our money.”

An example might be your subscriptions, for such things for things such as streaming services, magazines and websites. You might not have control over what is available to you but you do have control over how many you buy and which ones you choose.

“A quick win would be to pull out your credit card statement for the last couple of months, go through it and eliminate all of your subscriptions for everything and then add back the ones that on reflection you realize you really, really want,” Sellery says. “That is an example of where we can get more control over our spending by getting ruthless over what is going to make the biggest difference for us.”

Another tip is to seek out those few voices amid all the information that’s out there that you can trust. Peer pressure at its core is thinking other people are right and, if you listen to them, you’ll be accepted. Sellery says it’s important to be strict with yourself about whose opinions you should listen to.

“When you find those people whose opinion you believe counts, and it’s probably not very many, listen to them, be inspired by them, march forward and create a great life.”

For him, those voices include financial experts David Chilton, Ramit Sethi and Suze Orman, and Globe and Mail columnist Rob Carrick.

“I think what we all need to do is start with the question, ‘What is your money for?’” Sellery says. “The second thing we need to do is wake up to the consequences of our behaviour. And financial peer pressure really makes that difficult .. because we buy stuff that we don’t necessarily need and that has tangible consequences (we don’t have enough money to save for retirement) and intangible consequences (we feel not as great about what we’re doing on a day-to-day basis).”

If you want to know more about how you can gain confidence in making financial decisions and find solutions you can feel good about, talk to a Servus Credit Union advisor.

Illustration by Amanda Wall