Understanding Status Spending: A Timeless Financial Lesson

Back in the dark ages that were 1980s, anyone who was anyone in my elementary school wore Jordache jeans. My sister and I, of course, wanted to fit in with the popular kids and begged our parents for the name brand jeans. The problem was that Jordache cost three times the price of a pair of Wrangler jeans. So, Mom and Dad presented us with a choice: buy one pair of the “in” jeans, or three pairs of Wranglers.

This was my first lesson on that strange beast that is status spending. As a fairly practical child (who was responsible for her own laundry), it was clear to me that three pairs of jeans was better than one, no matter what label happened to be on the seat.

And that is basically how I choose to live my life. For example, I drive a 14-year-old Mazda 626 that certainly looks as though it has seen better days. But it is the most reliable car I have ever driven, and if it efficiently gets me from point A to point B, who cares if it’s missing a hubcap or has several scratches and dents?

As it turns out, many people do care. Like it or not, we are all judged by our possessions. I have a difficult time convincing people that I truly love my dilapidated old car. They assume that I must secretly be longing for something newer and prettier and faster, etc. When I get into these conversations, I find myself wondering if the individuals questioning my love for my car are also making judgments about my level of success because of what I drive. Possessions equaling success is such a common assumption that many individuals don’t even question its validity.

Do your possessions reflect how successful you are?

For example, in the film American Beauty, Peter Gallagher’s character Buddy Kane impresses Annette Bening’s Carolyn Burnham by expressing his belief that “In order to be successful, one must project an image of success at all times.” Both of these characters are real estate agents, whose jobs require that they have clients climbing in and out of their cars every day. The argument that a car (or even a Wrangler wardrobe) like mine could potentially hurt their career seems like a reasonable one.

However, there is a difference between presenting yourself in a confident and successful way and spending your way there. A long weekend detailing and waxing my car, along with a little cosmetic work, would make it much more presentable, and would be infinitely cheaper than buying a flashy new car. However that would not change the fact that I drive an old, low-status vehicle. No matter how successfully I present my car, some people will assume I cannot be good with money because I haven’t bought a newer car. But do I really need these individuals to think highly of me?

This was the same issue that plagued my sister and I in school. Though I would have loved to be accepted by the Jordache-wearers back in primary school, I also started to understand that the status symbol was ever-changing. One year, you had to have Jordache on your butt. The next year it was Gucci emblazoned across your shirt. By the time Hypercolor shirts were all the rage when I was in middle school, I realized that staying high-status among my peer group was getting to be awfully expensive.

Ultimately, status spending can help you to impress people who are very focused on money and how it is spent. And there are certainly some careers wherein success might depend (at least a little bit) on impressing those individuals: real estate, venture capitalism, investment banking.

But you have to recognize that you are the one who has to live with your spending choices. If buying something because it is high-status makes you happy—and you can afford it—then there is nothing wrong with spending your money that way. But always chasing the next status symbol means you’re living your life based on how other people perceive you, rather than based on what makes you feel fulfilled. No one has ever achieved contentment that way.

It’s also important to remember that status symbols don’t take that long to fall from grace. When I Googled Jordache jeans to see if they were still available, I discovered that they are now exclusively sold at WalMart.

If the price is right, I might finally buy myself a pair.

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