To Hell With The Joneses

From Yahoo Finance:

Keeping Up with the Joneses Can Put You Behind
by Laura Rowley

You're watering your lawn in your worn-out shorts and flip-flops on a warm summer weekend when you notice your Armani-clad neighbors opening the door for their caterers.

They've ordered trays of gourmet food, bottles of top-shelf alcohol, and a huge tent for what will clearly be a midsummer night's dream party in their manicured backyard. Eyeing their shiny, silver BMW convertible in the driveway and their new family room addition, you think, "How can they afford that? What am I doing wrong?"
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Boss' personal journey into covetousness started with her next-door neighbors, John and Tina, in her New York City co-op. They seemed to enjoy an easy, charmed life. Rumor had it that they paid cash for their apartment. They spent weekends antiquing upstate, jetted off to Paris for vacations, and ordered a steady stream of luxury goods that piled up at their door.

Meanwhile, Boss and her husband had relocated back to the U.S. from the Middle East just as a recession set in, and he couldn't find work. He eventually returned to business school and they relied on her freelance writing income, all the while hiding their financial stress from family and friends.

From these experiences, Boss decided to write a book focusing on the social psychology of money -- the relationship between the household and the outside world -- and asked her neighbors if they would agree to an interview.

As it turned out, the grass was not greener on the other side: Tina, unhappy in her career, had turned to retail therapy and racked up $21,000 in credit card debt without telling John. She and her husband had both been given money by their families (something they felt they had to hide from friends), and they actually did have a mortgage.
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Boss says we naturally compare ourselves to peers who are doing better, but rarely look at a homeless person on the street and thank our good fortune. That tendency has been confirmed by numerous studies. For instance, Andrew Oswald of England's Warwick University and David Blanchflower of Dartmouth College found that even if our incomes are rising, we tend to become less happy if the incomes of others are increasing more.
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But more and more people on our radar screen are living the good life -- at least in a material sense -- thanks to the democratization of credit and unprecedented levels of consumer debt. This prompts increasing speculation about how they can afford it. The reality is simple: Some of them can't, at least not without going into debt. But money is the last taboo, and few people speak about it honestly.