The Joneses aren't the reason you overspend – you are

If there's anything the financial independence movement hates more than spending $4 a day at Starbucks, it's the Joneses, and what we do to keep up with them. There is endless advice on how to avoid keeping up with these stereotypical consumers living near you. If you're not familiar with the idea of the "Joneses", they are the family living in your neighbourhood who spend more than they make and focus on showing off their own wealth. The theory is: when we see our neighbours driving a nice new car or enjoying a luxury yacht, we feel the urge to get the same thing. There's even scientific evidence that if our neighbours win a decent sized cash prize, between Dh2,700 and Dh440,000, those living close by who didn't know about the prize, were almost 7 per cent more likely to file for bankruptcy. The 2018 paper, from the Federal Reserve Bank of Philadelphia attributed this to people making riskier financial moves when they saw someone around them suddenly spending more money to keep up with their neighbours' perceived level of financial success. Here in the UAE, we are surrounded by signs our neighbours are spending heavily. I cannot walk down my street without passing a Rolls Royce, a McLaren or a Ferrari. As frugal as I am, even I sometimes cannot stop myself from fantasising about owning these bright, shiny things. And the Joneses in our communities have a major effect on our ability to save money. A 2017 survey from ServiceMarket and HSBC to understand current saving habits in the UAE found almost a quarter of working respondents were not managing to save anything, while 32 per cent were saving under 10 per cent of their monthly salary. There is hope, however. And this hope comes from the same social pressure that causes so many to overspend and overextend their finances. All we have to do is take a look at the Chinese savings culture to see how we can make the Joneses work for us. According to the International Monetary Fund, the Chinese save a staggering 46 per cent of their income, on average. Even the poorest portion of the Chinese population has a savings rate of almost 20 per cent. In the US, where I am from, the savings rate is closer to 4 per cent. Researchers attribute the extraordinary Chinese savings rate to cultural factors. The population has emerged from great uncertainty and hardship over the last century, so saving became a normal part of the culture, and therefore socially reinforced. The Joneses in China aren't causing people to spend money they don't have, instead, they are making their neighbours think twice before making a purchase. In turn this reinforces the values that have allowed them to build up significant monetary safety nets. You just need to choose the right role models and follow the right Joneses in life, ones with the same values as you, or values you aspire to have. You can use that same social pressure to save money to buy a house or prepare for retirement. All you have to do is find a frugal tribe. Personal finance blogs and Facebook groups like SimplyFI.org in the UAE, or the forums on the blog Mr. Money Mustache are fantastic resources to surround yourself with people who will cheer on your frugal decisions. They will also castigate you when you need a bit of scolding to keep you on financial track. A study by the American Society of Training and Development (ASTD) on accountability found that you are 65 per cent more likely to complete a goal if you commit to someone financially. If you make an accountability appointment with a partner, your rate of success goes up to 95 per cent. The key is knowing what you want, and then finding a supportive group of people to hold you to your goals. While the endless shopping promotions and flashy cars might make it seem as though everyone is living the high life, if you look close enough, you will find communities both in person and online that won't drag you down. They will inspire you to reach for and achieve your dreams. Dubai schoolteacher Zach Holz ( @HappiestTeach ) documents his journey towards financial independence on his personal finance blog The Happiest Teacher

The Joneses aren't the reason you overspend – you are

Rather than following those that like to splash out, find a tribe that enjoys a more frugal lifestyle