Keeping Up With The Joneses Costs A Lot

It seems our desire for better things, from possessions such as handbags and watches, to the latest mobile phone or exotic holiday, costs us a fortune but can these realistically be achieved?

The Direct Line Aspiration Index shows that 96% of us aspire to own something better than we currently have.

Analysing what people have now, compared to what they realistically aspire to owning within the next five years. The price tag for the nation’s aspirations stands at a staggering £230 billion. In order for the average person to meet their realistic goals within five years, they would each have to own items worth almost £5,000 more than their current possessions.

The extra spend would include £500 on a watch, £270 on a laptop and more than £3,000 on buying a new car.

Donna Dawson, behavioural psychologist, said: “It is psychologically healthy to hope, dream, strive and aspire for better things for ourselves and our families; in fact, it is part of the universal human condition. However, it is important to ensure that our material aspirations are kept within our financial means; otherwise, we become slaves to them.

The Index shows that six in ten people will save up to buy the things they really want, but one in five will cut back on things like meals out and entertainment, while 15 per cent will put it on plastic.

Stuart Ballantyne, head of Select from Direct Line, said: “We all love ‘keeping up with the Joneses’! The nation certainly has ambitious aspirations for their possessions – many of us will always be on the look-out for the next big trend or designer, but the question is can we afford it?

For those who are realistic about what they want and are saving hard to achieve them, then their goals are in sight – but beware if your solution is to rely on credit, for example.”

The study also revealed that a third of respondents do not adjust the level of their home contents insurance when they buy new things of value. A fifth will, but only for very high value items.

MoneyHighStreet.com comment: Lovely as it is to have all these nice, new possessions the point about being able to afford them, as well as of course the need for insurance to cover them, is critical. Taking on more credit than you can afford to repay not only can result in debt problems for you but it can also damage your credit rating – this can have a knock on effect when applying for a new credit card, mortgage or any other kind of credit. Be careful – keeping up with the Joneses is not to be done at all costs!!

With regards to the point about high value items, be careful to check that your home insurance policy covers these. Depending on their value you may need to consider a high net worth home insurance policy which will have increased limits for such as jewellery, watches, art collections etc.