Why we don’t care about keeping up with the Joneses, or the Smith’s or the Patel’s.

Why we don’t care about the keeping up with the Joneses, or the Smith’s or the Patel’s.

Most people have heard the old cliche, “Keeping up with the Joneses”. Well, as we live in the most diverse County in the United States, it also includes the Patel’s, Smith’s, Garza’s, Nguyen’s and Wang’s.

OK that sounds pretty harsh, I admit. Its not that we do not care but it does make a catchy headline. The more compassionate side of me says maybe I should substitute ‘worry’ for ‘care.’ Then again, I am not a very politically correct guy.

Here is why we don’t worry about those other families – they are not us! Pretty simple.

Yacht

I am not going to lambast others with what they do with their own money. They are grown ups and can do as they want. Go ahead and buy that Mercedes. Go ahead and by the 5,000 square foot home with five bedrooms, 4.5 baths and a pool. Not that I don’t mind going over to our friends house for a swim.
Go ahead and buy that boat (by the way, the best boat you can have is your buddies!). That is all just not our thing.

Mrs. r2e and I are not flashy people. We buy for necessity. We needed a place to call home and we decided to buy a modest home. We needed two cars for home and work.We needed beds to sleep in. We needed a refrigerator and stove.

Now, we did make some purchases that were choices. We made a choice to get two more cars as the boys got older. Notice I said choice – we did not need those two extra cars but it made life more convenient. I know not all people are in a position to make a choice like this.

As far as material things go everything else is a want to us. We wanted entertainment so we bought a modest television set. Then we signed up for cable tv (yeah, I know, we are so old school with the cable). We wanted to have some furniture in the house we had so we bought a couch, tables, chairs, etc…OK, you get the idea. These were all choices and not necessities.

Here are some of the choices we made and how it impacted our journey to becoming FI.

Cabin
Big House

Figuring out housing – To Rent or To Buy?

This is a BIG decision for anyone. This is a choice tough. We could rent or we could buy. Renting meant not building up equity in the home. Buying could mean taking on a big mortgage.

You need to tune out the real estate agent and the mortgage broker who are in business for themselves! They want the commissions related to your purchase. Not saying all people are like this but they are in the business to make money for themselves.

After we were first married, we rented a townhouse in the town where we worked. I would love to say it it because we wanted to learn about the community before we committed to purchasing a house. It was really because we were just starting out and had no net worth and crappy salaries! The joys of being newlyweds!

In the end it was the right decision for us. The time allowed us to get to know the community. Through work acquaintances and friends we learned about different areas of town. We did not have children yet so schools were not even on our mind. We took a year or so on this so we were prepared to make the next leap.

After about a year, we bought our first house. It was a modest split level. It needed some work. It was located in an area that was on the lower end of the cost spectrum. Sure it was not in the most popular area but it also was not overpriced! It had 3 bedrooms which was more than we needed since we had no children yet.

When I was offered a promotion it was just far enough away to make it to long to commute daily. We learned from our experiences and started searching in a new town. We avoided areas that we considered over priced and over developed. While we did have a small gain on the sale of our first house, we did not go overboard on the new one. We did buy a house in the suburbs that was a little larger and a little better. We knew that we were planning on a larger family at that time.

With the second house I got some great lessons in the cost of home ownership. There are things you need to take into account that can have a real impact on your cost of owning a home. Don’t just focus on the mortgage payment. There are other “costs” related to being a homeowner that people tend to overlook.

House Bills

First lesson is about real estate taxes. I have only ever seen one city where there were no real estate taxes (that city relied solely on business property taxes). So, when buying your house, ask what the real estate taxes are so you can add that into your budget.

We also learned about possible taxes in a major city or county jurisdiction. Understanding this helped us avoid the big city taxes and also the big “sports” taxes levied to pay for professional sports stadiums. The downside of course is that your commute to work will be longer and that means higher cost for commuting.

Second lesson is that houses cost money to maintain. Things break. The cost of a furnace, a water heater, air conditioner are major dollars if they break down. When you are buying a house, have those items inspected, determine how old they are and factor that in to the price you offer.

By the time we got to our third house we made sure to keep learning. I took another promotion and relocated a pretty long way from family this go around. We researched the cost of living (link to other blog about this) and found that the costs were even lower than where we were living. A house that was 25% larger than what we had at the time actually cost about the same. By this time we had to consider the fact that we had two boys so we made sure we bought a house we could grow into. We also had to factor in things like commute time, schools and activities.

So, when you look at home needs you have a choice to make. The choice is entirely yours and you will inherit the consequences of that choice. Don’t coming whining to me about being in debt as you live in your mansion – remember, I don’t care.

dodge colt

Purchasing a car.

So this one took me about 25 years to learn what was better – better for us anyway. Remember, what works for us may not work for you.

I had always been a new car guy. Even right after college when we were DINKS (google it if you don’t know what that is). Now, we did not go out and buy some top of the line new car. Our very first new car was a Ford Sable and we purchased it using a family discount (thanks Uncle M). After that, I just got into this automatic mode of buying new cars – but at least we stuck with the lower cost side.

When the new “mini-van” craze first hit we had to get one, we had one son at the time so why not? We fell pray to peer pressure. Again, the new car purchase.

The downside of purchasing new is that the second you drive the car off the dealer lot the value plummets! You buy a $30,000 car, take a $25,000 loan and ten minutes later the value of your new car is below the loan you just took! Crazy huh? Unless you have some super rare car that appreciates with time, cars are definitely not an investment.

Only in the last couple years did we start buying “new to us” cars – otherwise known as used cars. When our two son’s starting driving we made the choice to purchase used cars for them. I Nothing fancy but certainly not the $500 car I started with as a young driver! I do distinctly remember Mrs. r2e saying their used cars were newer than her new car!

In 2017 we went through a major natural disaster named Hurricane Harvey. We lost two of our cars in one day after evacuating to where we thought was a safe zone. (FYI – Thankfully our home was fine, though I had family and friends that lost theirs).

Through a friend I was introduced to a contact at a car manufacturer. This contact said she could sell me some new model cars with low mileage. Apparently company representatives drove new cars and then they sold them. So, I lucked into another discount deal and bought two used, new model cars. The best thing was that I paid in cash and took on no loans due to being FI.

So, when you look at cars you have a choice to make. The choice is entirely yours and you will inherit the consequences of that choice. Don’t coming whining to me about being in debt as you drive your high end car – remember, I don’t care.

rotary phone
cell phone camera

Purchasing new technology.

Now don’t go getting me started on this one. There are so many issues these days it drives me crazy. I am going to sound like my dad but geez, stuff just ain’t built like it used to be. Plus, when it is built the manufacturers build it with ‘planned obsolescence” in mind. You know what happens – hey, consumer, we won’t maintain or have parts after five years so you have to buy new!

Anyway, we have not purchased the latest and greatest of technology too often. I am sure we have a couple times. Who needs to replace that iPhone you just bought a year ago? Who the heck needs a a refrigerator with a video monitor installed on the door? Who needs that latest 100 inch, 10,000K resolution television? I guess there are people out there that do need this stuff. We don’t.

Our two boys got tired of our canned response to their questions about buying stuff. They would ask when we would buy that new gaming device. We would ask them about friends of theirs who had one. “Well, Joey has it.” To which we would reply, “Then go over to Joey’s house!” Sure we were not the popular gathering spot for the kids but who cares – our boys had just as much fun going over to friends houses.

So here are some tips you many want to consider:

1. Stop comparing yourself and your situation to others. Easier said than done maybe. A lot of negative vibes come out of comparing to others.

2. Stop being jealous of your friends if they go out and buy some grossly overpriced latest technology gadget. If you really want it, wait under version 2.0 comes out! More often than not, the latest gadget turns into a one Christmas season fad and goes away.

3. Stop listening to the constant barrage of advertisements that try to convince you that you need their product. You don’t. Tune out the subliminal messaging.

4. Stop getting sucked into social media crazes that make you feel guilty for not being part of the crowd. What you see on social media are people’s best moments. People are not sharing the drudgery of their daily lives.

5. Stop giving into your kids when they whine about their friends having the latest cell phone or other gadget. I will probably get some flack on this but stop being your children’s ‘best friend.’ You are not. You are their parent. Act like it.

6. Stop being a victim. Be a grown up and make grown up decisions. Sure, there are situations in life that we cannot control. Going through a major healthcare certainly was not in our plans! Most of our lives are controllable though. Get help. Be positive.

Have you fallen for the Keeping up with the Jones’ trap? What did you learn from it? If you have avoided the trap, how did you do it?

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