Lifestyle

The Fear of Looking Cheap: How The New American Dream is Keeping Us Broke

This post was written for my blog partner Learnvest. You can read the original published version here.

Our grandparents grew up in a time when you had to learn to be resourceful. Things were fixed and not replaced, women made their own clothes, and neighbors shared one phone. Things were purchased because they were necessary, not because they were simply wanted – and guess what? No one would ever have dared to refer to your Nana as a cheap-ass.

 So where did we go wrong? Research from Ohio State found that People in their late 20s and early 30s carry significantly higher credit card debt than older generations and pay it off way more slowly. Much of this can be attributed to the rising costs of education, but the bigger problem in my opinion, is our generation’s fear of looking cheap.

Success is naturally equated to wealth, and no one idolizes someone who is not successful. On top of that, the American Dream has morphed into a whole other level of status and luxury. We see rappers in chinchilla jackets popping Ace of Spades champagne in their videos, not driving a Toyota and having game night in with their friends. Kanye said it best– “What you think I rap for, to push a fu@#ing Rav4?” In the pop culture of today, having the appearance of wealth trumps actually having any money. What needs to be understood, though, is that people who are really wealthy actually attribute frugal (or “cheap”) habits to getting and staying there.

the new american dream

The number one quality of successful people is living below their means, and this means being frugal. For example, there are 1,138,070 millionaire households living in homes valued under $300,000, yet at the same time, 86% of people driving the most expensive “status” cars are non-millionaires.

People who actually have money are not scared of looking cheap – that’s how poor people think, and it keeps them poor.

I’ve personally lived in NYC for nine years, and I saved a reasonable about of money working as a waitress and a model. It’s true – I was fortunate to have fit the bill for these particular jobs, but it’s not like I was booking $30,000 campaigns. I just lived in an affordable apartment, I never took taxis, and I never feared being labeled as cheap. Did people call me cheap because I always looked for better deals and watched my spending? Sure, but while they racked up their debt in an attempt to show everyone how well they were doing, I was putting myself in the position to have the money to invest in my future – to create more opportunity and success for myself.

Who knows, maybe this is what will separate the rich from the poor, like a survival of the fittest. Those who know to sacrifice will be the ones who ultimately live in comfort, and those who feared looking cheap while they were rocking Louboutins and Gucci loafers will ultimately live in their parent’s house when they’re 35. Wondering where you fall in all of this? Well the next time you put your credit card down, ask yourself what kind of American Dream you’re investing in.

 

18 Comments

  1. Loved the last line of this post – very true!

  2. This article is truly inspirational. I live in NYC and honestly its very expensive to live here, hopefully someday I will be able to move on.

    • NYC is definitely a rough place to not have a ton a money – but it’s also the place where big things can happen. I love this city – it will always keep you driven and hungry :)

  3. I happen to like the Rav4. Mr West, should take it for a test drive at least before he writes off the car. It’s economical as well.

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  5. My grandmother was one who made her own clothes and her childrens’ clothes. Growing up with 14 brothers and sisters in Germany, they only purchased what they needed. We need more of that these days.

    • I agree. My grandparents were the same way, and I would bet that they’re alot happier than we are now a days. Something needs to change.

  6. I completely agree with you. Everybody is trying to keep up with the Joneses…no matter the costs. I just don’t understand why status symbols like certain types of cars, certain brands of handbags, and the latest tech gadgets have consumed so many people. So true that actual millionaires don’t need to show off.
    P.S: I guess I shouldn’t judge a book by its cover…always assumed models had a glamorous lifestyle, bought expensive shoes and clothers and rode in luxury vehicles. =) Great blog!

  7. Here in Italy, at least the food is not expensive. You can dine and eat really good without overspending.

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  9. Conspicuous consumption has been around for centuries. Attempting to look rich to live up to the American Dream has been around at least since the 1920s. (Now that The Great Gatsby is in vogue again…) It’s all about easier access to credit and more advertisements everywhere.

    As far as the millionaires living in sub-$300,000 homes thing goes, in certain centres that’s possible. In Toronto or NYC, I think we both know that isn’t an option. It’s true that successful people tend to be smart with money but the numbers look different in different locations.

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  11. Great article. Yes, it is true that conspicuous consumption has been around for a very long time and we still see a lot of it today. I think that with the popularity of social media, it has become even more a part of our world…everyone seems too concerned with showing off in real life and online even if they are hurting for it. This is also the exact difference between “old money” and “new money”…some people just have the overwhelming need to show off, which in my opinion is incredibly gross. You can show off, but at some point it just becomes too much and you have to wonder what kind of core values these types of people really have and what they might be teaching e.g. their children or other people who look up to them.

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