The Problem with Status Spending

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Mazda 626Would you drive this car? I would.
Back in the dark ages that were 1980s, anyone who was anyone in my elementary school wore Jordache jeans. My sister and I, of course, wanted to fit in with the popular kids and begged our parents for the name brand jeans. The problem was that Jordache cost three times the price of a pair…

Back in the dark ages that were 1980s, anyone who was anyone in my elementary school wore Jordache jeans. My sister and I, of course, wanted to fit in with the popular kids and begged our parents for the name brand jeans. The problem was that Jordache cost three times the price of a pair of Wrangler jeans. So, Mom and Dad presented us with a choice: buy one pair of the “in” jeans, or three pairs of Wranglers.

This was my first lesson on that strange beast that is status spending. As a fairly practical child (who was responsible for her own laundry), it was clear to me that three pairs of jeans was better than one, no matter what label happened to be on the seat.

Mazda 626
Would you drive this car? I would.

And that is basically how I choose to live my life. For example, I drive a 14-year-old Mazda 626 that certainly looks as though it has seen better days. But it is the most reliable car I have ever driven, and if it efficiently gets me from point A to point B, who cares if it’s missing a hubcap or has several scratches and dents?

As it turns out, many people do care. Like it or not, we are all judged by our possessions. I have a difficult time convincing people that I truly love my dilapidated old car. They assume that I must secretly be longing for something newer and prettier and faster, etc. When I get into these conversations, I find myself wondering if the individuals questioning my love for my car are also making judgments about my level of success because of what I drive. Possessions equaling success is such a common assumption that many individuals don’t even question its validity.

Do your possessions reflect how successful you are?

For example, in the film American Beauty, Peter Gallagher’s character Buddy Kane impresses Annette Bening’s Carolyn Burnham by expressing his belief that “In order to be successful, one must project an image of success at all times.” Both of these characters are real estate agents, whose jobs require that they have clients climbing in and out of their cars every day. The argument that a car (or even a Wrangler wardrobe) like mine could potentially hurt their career seems like a reasonable one.

However, there is a difference between presenting yourself in a confident and successful way and spending your way there. A long weekend detailing and waxing my car, along with a little cosmetic work, would make it much more presentable, and would be infinitely cheaper than buying a flashy new car. However that would not change the fact that I drive an old, low-status vehicle. No matter how successfully I present my car, some people will assume I cannot be good with money because I haven’t bought a newer car. But do I really need these individuals to think highly of me?

This was the same issue that plagued my sister and I in school. Though I would have loved to be accepted by the Jordache-wearers back in primary school, I also started to understand that the status symbol was ever-changing. One year, you had to have Jordache on your butt. The next year it was Gucci emblazoned across your shirt. By the time Hypercolor shirts were all the rage when I was in middle school, I realized that staying high-status among my peer group was getting to be awfully expensive.

Ultimately, status spending can help you to impress people who are very focused on money and how it is spent. And there are certainly some careers wherein success might depend (at least a little bit) on impressing those individuals: real estate, venture capitalism, investment banking.

But you have to recognize that you are the one who has to live with your spending choices. If buying something because it is high-status makes you happy—and you can afford it—then there is nothing wrong with spending your money that way. But always chasing the next status symbol means you’re living your life based on how other people perceive you, rather than based on what makes you feel fulfilled. No one has ever achieved contentment that way.

It’s also important to remember that status symbols don’t take that long to fall from grace. When I Googled Jordache jeans to see if they were still available, I discovered that they are now exclusively sold at WalMart.

If the price is right, I might finally buy myself a pair.

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About Emily Guy Birken

Emily Guy Birken is a freelance writer and mother who loves to share tips on managing the family budget and other personal finance tips. You can find her musings on parenting and life at The SAHMnambulist.

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  1. Stephanie @ PoorerThanYou says

    Great points! I’m shopping for a new(er) car right now – out of necessity. I have been driving a 1996 Oldsmobile (only 83,000 miles on it, baby!), but it’s suddenly stalling out randomly, and would need a lot of expensive repairs to keep it on the road long-term. But I’ve noticed a lot of people giving me flak for not caring much about the new car that I get – when I tell them I don’t care that much, I just want something reliable and safe… I get looks like I have two heads. But cars just aren’t my thing.

    I don’t judge anyone for spending a lot on their car(s) if cars are their thing. Some people get really excited about features and horsepower and the color, and that’s cool. But I hope they’re doing it for themselves, and not to impress other people.

    • Ryan Guina says

      I’ve been on both sides of the coin with cars – I always drove cars with a lot of years and miles and never had a problem with it. The last car I owned when I was living in England was a Rover Metro, which is similar to a Geo Metro, but with fewer amenities if that is possible. It was a small car with a tiny engine, a huge dent in the back which made the hatchback difficult to open… In typical male fashion, I added a CD player and stereo, but even then I kept it on the inexpensive side, with the entire system (head unit and speakers) costing around $100 or so. No sense in putting more than that into a car which ost less than $600!

      My next car was a used pickup truck. Then when I was in my mid twenties I had to go in for back to back knee surgeries and I was single and living alone, so my manual transmission would have been a big challenge. So I went out and bought a new I bought a new Mazda 3 – something I budgeted for, and which was reasonably priced and within budget. (More on the decision to buy new: Why I Bought a New Car, and Why it Was A Good Idea)

      6+ years later, I’m still driving the same car and will probably drive it until it is either too expensive to maintain, or something happens to it.

  2. Early Financial Freedom says

    This post reminded me of a recent call we got from the car dealer from which we had bought our SUV 6 years ago. They were calling to talk to me for a few days but I wasn’t home whenever they called, so my wife took the calls. On the last call, they told my wife that why we were not buying a new car since our car was 6 years old, and almost everyone who bought a car around the same time had already gotten another one. My wife said that we love our car, it is in a great shape and is already paid-off for years, so no need for a new car.

    The response she got from the dealer rep was that “everybody loves a new car, why don’t you get one!” Well, I guess we love our financial freedom more 🙂

  3. Kris says

    If you have the status, and the money that goes with it, then that’s not such a bad problem. But if you overspend to make it look like you have more than you do, then that’s dangerous. I’m very happy to drive around in my 99 Honda Accord in a town where everyone seems to have a Lexus or Audi. Sure, I’d love to have either, but that’s just not reality right now.

  4. Peter says

    Ah.. the good old dark ages of the 80s. I remember the status symbol jeans. At our school it was the Guess jeans, and at one point the acid washed jeans. Oh and of course we all rolled our jeans back then. Man I’m old. Of course I bought the one pair of Guess jeans cause I wanted to fit in and match my hypercolor shirt.. ah. the memories.

    It can be easy, especially when you’re younger, to get caught up in projecting an air of success and status. The older I get, however, the less I care about that stuff and the less incentive I see in the status spending. If only i had learned that back in 1986. 🙂

    • Ryan Guina says

      I never had the designer jeans, but I rocked the tight roll. To this day I’ve never owned a pair of Jordans either, though I did have the Nike Airs and a pair of Reebok pumps. I had a Hypercolor shirt, and loved it. Yeah, I’m old too!

  5. Victoria @Lend Not Borrow says

    Millionaire Next Door (Thomas Stanley) gives a great description of what the average millionaire looks like. They look more like the average person and not flashy. It’s almost the complete opposite of what society views as “successful”.

    Thanks for sharing!!

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