Needs vs. Wanting to Keep Up With the Joneses
One of the effects that systemic racism has on Black people is that it can sometimes seem daunting to achieve financial security. Lower incomes and shortened life expectancy can decrease faith in better tomorrows. However, as we become intentional and proactive with our finances we can shift from a paycheck to paycheck mindset. As we lengthen our horizons, it is wise to discern between needs and wants.
Consumerism as a way to prove our worth has created a debt-ridden society. Bad debt is a form of slavery in that we are bound to our lenders. Our movements and options are restricted and limited because of these prior obligations. Prioritizing debt elimination in order to become debt-free will have a positive impact on overall financial health, which in turn, impacts pretty much every aspect of our lives. Of course, there is institutional racism which by design has been very successful at preventing Black people from building wealth and, for many, basic security. In spite of the multitude of hurdles strategically placed in our path, I believe in a both/and world and therefore we have to do what we can with what is in our control.
Using debt to finance a lifestyle in order to project a certain status or to purchase distractions that prevent us from connecting with our feelings keeps us in an unhealthy and expensive cycle. When you experience an advertisement and you feel the familiar rush of wanting whatever it is, pause for a few minutes and breathe. With compassion, ask your true self the following questions:
Why do I want it?
Is it to fill a void?
Will it actually fill that void?
What is the source of that void?
Will it give me lasting value or pleasure?
Who am I hoping to impress by making this purchase?
Why do I feel the need to impress them?
Does this purchase get me closer to a goal or further away from a goal?
If I don’t have a current goal, why not?
Wants can bring us joy or they can sabotage our efforts. It's up to us to decide if instant gratification is more important than retiring in dignity or building a legacy. With longer outlooks, we can take advantage of the power of time on money. This is called compound interest and it's essentially how debt is eliminated and wealth is generated. Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it”. Utilizing it to our advantage influences the trajectory of our financial health which also has a direct impact on our mental health.
This chart exemplifies the effect that time has on building wealth.
Years ago when I was beginning my journey toward financial peace of mind, I realized that I needed to be consistently intentional and proactive with my choices. I chose to act broke temporarily by pretending to be poor so that I could achieve my goal of acquiring assets (instead of liabilities) so that I wouldn’t have to actually be poor. Reframing my situation empowered me, bought me time and helped me to have a deeper understanding of my priorities. I invite you to begin your journey.
Make a list of your needs. Use it as a guide to help you make purchasing decisions.
Commit to breaking the cycle by making a stand to compromise by choice.
Look within for guidance on how to balance now with later.
Create a solid multiphase plan that captures your goals, hopes and dreams and develop the discipline to follow it.
It is likely that your Joneses are in debt and have allowed retail therapy, YOLO and FOMO to influence their decision-making. Look within for alignment and be your own Joneses.
Utilizing a Financial Coach is like having a personal trainer for your money. Find out if a mentor, accountability partner, guide or cheerleader is right for you by scheduling your FREE 30-minute Q&A call.