Vision Credit Education, Inc.

Is is natural to want to improve your standard of living. Some of us do it for comfort, others for image. Many of us try to fake it until we make it as we try to keep up with the Joneses. The problem is, I’ve met the Joneses, and they are in debt too!

Suburban Cold War

Remember when the U.S.S.R went bankrupt? They ran out of money trying to keep up with the military might of the U.S.

Now the Cold War has moved to the suburbs. Neighbor is pitted against neighbor, trying to outdo each other in the race to outfit the nicest home, drive the fanciest cars, have the best toys and take the most vacations.

In trying to keep up such an image of success, we are mortgaging our futures. Some of us have begun to earn much more income than before. Perhaps it was a promotion or a new job. Maybe we got married and found that we have more to spend.

In order to create symbols of our success, we buy the biggest home we qualify for, put the furniture on credit and buy higher end automobiles. These are our status symbols. We know that the Joneses are watching. Perhaps we want to fit in, or maybe we are trying to prove our supremacy.

The Joneses Are in Debt Too

If we turn our attention to the Joneses, lets examine what it is that makes us see them as successful. It is their status symbols that give them the image of success, right?

When the Joneses make extravagant purchases, we can assume one of two situations exists. One possibility is that the Joneses are very well off. They could have family money, great investments or much higher income. They could be living well within their means. If that is the case, you might be out of your league trying to compete with their wealth.

The other possibility is becoming more common. The Joneses may be just like you, spending their way to create an image of success. Both of you could be on a collision course with disaster.

If you think this doesn’t happen, try driving through a neighborhood that has multiple foreclosure listings. These homes uses to be occupied with the Joneses and every other family that tried to compete with them.

Many took out bad mortgages that they could not afford. Adjustable rates and other exotic terms made such loans unaffordable in the long run. Others bought more home than they could reasonably afford, and simply fell behind on many of their monthly obligations.

This too could be you. Think about the “stuff” that you have, and consider how much of it you actually own. Do you have substantial home equity or did you cash that out? Are you upside down on your car loans?

If so, you are setting yourself up for financial ruin. What will you do if your engine seizes while you still owe $15,000 on your car? Can you afford to buy another one and make double payments? Or you could simply roll it over into a newer, even worse car loan. Have you done that before?

If you have made financial mistakes, then understand that you are just like everyone else. We have all made them, and we will continue to make more. However, lets try to make smaller financial mistakes while we proactively plan our financial future.

Are you behind on your car payments? Talk to your lender to work out a plan. Are you falling behind on mortgage payments? Speak with a housing counselor. Do you have heavy credit card debt? If so, get debt help from a credit counselor. Whatever your situation, take action today before it gets worse.