Is living fake rich keeping you real broke?

Do you find yourself struggling to maintain the illusion of success and affluence while secretly grappling with financial difficulties? Are you borrowing money just to keep up with your social circle every weekend? Take a moment to reflect on your social media presence – does it truly reflect your actual life or does it portray a more luxurious lifestyle than you can afford? Have you ever sacrificed meals or delayed bill payments due to extravagant purchases or weekend adventures? It's time to acknowledge that the desire to look rich is keeping you broke. Ask yourself, is it worth it? Does external validation and a YOLO (You Only Live Once) lifestyle truly bring you happiness, or does it push you to live beyond your means, accumulate debt, and undermine your financial and emotional well-being?

If these questions resonate with you, know that you're not alone. According to research from Finder, 4.3 million Australians have gone into debt or overspent to keep up with their friends. The younger generations are particularly vulnerable, with around 69% of millennials and 64% of Generation Z spending money due to peer influence, compared to only 23% of baby boomers. Emma, a fashion buyer at a leading activewear brand, has witnessed the pressure to maintain appearances firsthand. "The pressure to look the part in fashion is crippling. I see my colleagues in their 20s wearing designer clothes, designer handbags, and dining at exclusive restaurants on the weekends, knowing they can't afford it on their salaries." She shared that an entry-level salary in fashion is around $60,000 per year, while an 'entry level' designer handbag costs approximately $4,000, representing nearly 10% of an individual's take-home pay for the year. In a recent Refinery 29 article, the author confessed to feeling obligated to buy "a nausea-inducing round at work drinks because it's what I've been conditioned to do," only to later go without food at home to compensate.

Our society is driven by image, consumerism, instant gratification, and materialism. Consequently, there is mounting pressure to project an image of wealth and affluence. This pressure can arise from societal expectations, peer influence, or the desire for approval and recognition. Many people feel compelled to keep up appearances and showcase a lifestyle they perceive as desirable, even if it means living beyond their means. Moreover, the constant exposure to advertising and media, including social media, creates the perception that a specific lifestyle is necessary for happiness and fulfilment. Advertisements often promote material possessions, luxury goods, and experiences that create a sense of aspiration. Given that the average Australian is projected to spend 17.25 years on their phones, it's no surprise that we succumb to advertising, aspiring to a lifestyle that doesn't align with our financial reality. Additionally, research from the HILDA survey reveals that 45% of Australian adults lack financial literacy, leaving them unaware of the consequences of living 'fake rich' on their long-term financial wellbeing.

Living a "fake rich" lifestyle can indeed keep you in a state of "real poor" living. If left unchecked, it can lead to debt accumulation, financial struggles, and long-term consequences. To avoid the detrimental effects of this phenomenon, it's crucial to shift your perspective on wealth and happiness while developing a sustainable relationship with money. So, where do we begin?

Shift your perspective on wealth and happiness:

Take the time to understand what truly brings you happiness and a sense of wealth. Often, it's the non-material aspects of life, such as experiences, health, and quality relationships, that provide the most genuine contentment. 

Get Financially Fit:

Make financial well-being a part of your daily life. Understand your current financial position, create a spending plan for each pay cycle that allows you to enjoy the present while taking care of your future. Develop a plan to eliminate debt and build real wealth. Build your financial knowledge, capabilities and confidence so you can make informed financial decisions that support your aspirations.

Develop money goals aligned with your personal values:

Identify your core values and priorities. Set financial goals that reflect what truly matters to you. For example, if you value freedom, perhaps you aim to have 3-6 months' worth of emergency savings, allowing you to walk away from unfavourable situations like bad jobs, bad housemates or bad lovers. Create specific and measurable goals that honour your values and align with your long-term financial aspirations.

Practice Mindful Spending:

Become a conscious consumer and evaluate the true value and necessity of each purchase. Distinguish between needs and wants. Explore alternative options. Calculate the amount of time you would need to work to afford the item. Consider what else you could spend the money on. Ensure that your purchases support your financial goals and priorities.

Find your tribe:

The people you spend the most time with significantly influence your life. Surround yourself with like-minded individuals who prioritise financial stability, personal growth, and a zest for life.

Living a "fake rich" lifestyle may seem appealing, but it often leads to financial struggles and emotional strain. The pressure to project affluence and meet societal expectations can drive us to make choices that harm our long-term financial well-being. However, there is hope. By shifting our perspective on wealth and happiness, becoming financially fit, setting values-aligned goals, practising mindful spending, and surrounding ourselves with a supportive community, we can break free from the cycle of living beyond our means. It's not about looking rich; it's about feeling content and in control of our financial lives. Take the first step today and embark on your journey towards financial empowerment. You deserve it.