For decades, Americans often measured their success by the size of their house and, perhaps even more so, what kind of car was sitting in the driveway. A new study suggests not much has changed.
In fact, the pressure to “keep up with the Joneses” is still a significant factor in today’s purchase or lease decision, according to a survey by Bankrate.com, a financial news website.
Nearly one in five U.S. adults (18%) say they have felt pressured to spend more than they were comfortable with on a car in order to appear successful in the eyes of others, the website study reports. The pressure to have the latest and greatest cars, trucks and sport-utilities only ramps up with the arrival of kids.
Twenty-nine percent of parents with children under age 18 are the most likely to have felt pressured to overspend on a car to look successful. This feeling of needing to drive a fashionable or impressive vehicle has hit a surprising group of people: millennials.
The group once thought to care more about phones than cars is not immune to the scrutiny of what sits in their driveway.
Twenty-six percent of millennials (ages 23-38) say they’ve felt this pressure compared with 14% of older buyers.
Additionally, men are more likely than women (21% vs. 14%) to feel it while vehicle owners who make $80k+ per year are more likely than those who make under $40k (21% vs. 16%). This issue isn’t just limited to cars.
The survey also found that nearly half (49%) of Americans feel pressure to overspend in order to look successful in the eyes of others.
The most popular items respondents say they’ve felt pressured to overspend on include clothing, shoes and jewelry (23%) as well as social activities and dining out (22%).
And while the most common offender in perpetuating overspending expectations is friends (37%), respondents also feel pressure from spouses or significant others (30%), extended family (25%) and their own children (23%).
In order to keep a vehicle purchase under control, Bankrate.com does have a few recommendations.
Budgets are essential to combat overspending, but you should ensure your budget is flexible enough to withstand any pressure you feel to overspend.
Stephens recommends building a budget with room for “empowered spending.”
“Most people don’t enjoy budgeting because we tend to cut the small joys out of our lives,” he says.
“However, if you keep a little bit of your budget open to empowered spending, you will have a much better chance of sticking with your overall budget.”