Staying Away From the Joneses

 

Google Glass
Google Glass

This is another post from Mrs. Buck who is proposing an app that I think would sell like hotcakes to our community.  Any Google Glass developers want to sign up for this one?

We’ve been living in our house for 8 years now.  I consider our neighborhood pretty nice, although far from fancy.  The homes are plenty large enough to raise a family.  Sizes range from 1,600 to 2,600 square feet, come equipped with 3 or 4 bedrooms, and are typically priced from $210K to $350K.  We’ve been here long enough to notice an interesting trend. Many young couples stay in our neighborhood for about 5 years, then leave to “upgrade” their homes.  It’s made me wonder if we should be doing the same thing.

I am amazed at the sheer number of neighborhoods in our modest Midwest location (average sales price this spring in our town was $190K) with homes priced $600K and above.  I’ve asked Buck, “How do this many people afford these homes?”.  He immediately replies, “They’re spending all of their money on their home, and not saving much.”  Really!?  All of these people are making the same mistake?  The optimist in me can’t believe it, but the statistics on the finances of American families paint a less optimistic picture.

Deep down we all know and believe these statistics. But unfortunately when it’s time to buy a house or a car, we don’t keep these things in mind.  What if we could change that?

Behavioral Science

I was watching a recent TED talk by Alex Laskey:  How behavioral science can lower your energy bill (about 8 minutes long).  He discusses the fact that the use of personalized home energy reports which included energy consumption comparisons to one’s neighbors was resulting in a marked decrease in usage.  Turns out that comparing yourself to your neighbors was more effective at reducing energy consumption than other marketing taglines such as *Save Money* or *Save the Planet*.   As Alex Laskey states, “We’re just motivating people to pay attention and change their behavior.” This little behavioral science experiment is working. They are estimating this year two terawatt hours of electricity will be saved, “enough energy to power every home in St. Louis and Salt Lake City combined for more than a year.”

Looks like “keeping up with the Joneses” runs deeper than just material goods.  So let’s use this to our advantage and change some behavior.

There has got to be an app for that

Let’s use Google Glass to fill in the rest of the financial picture.  Say you’re shopping for a house in a new neighborhood.  Currently we only have very superficial information available to us:  school district, average home price, crime rate, etc.

Google Glass - Basic Neighborhood Stats
Google Glass – Basic Neighborhood Stats

There is no way to determine the financial values of the community as discovered by Mr. and Mrs. 1500 from the blog 1500days.com on their move to Colorado from Wisconsin:

“We thought we were buying into a nice community, but it turns out community is the farthest thing from our neighbor’s minds. This bunch of self-centered, self-absorbed consumeristic morons only get together to drink copious amounts of alcohol (often riding their tricked out Harley’s to the bar to do so). I am pretty sure they also get together to compare their latest purchases, and plan on how to catch up to or surpass the Joneses.”

What if they had a Google Glass view that looked like this?

Google Glass - Enhanced Neighborhood Stats
Google Glass – Enhanced Neighborhood Stats

A view that included detailed information regarding their neighbor’s consumer debt and savings. You could identify quickly if residents of a particular neighborhood shared your financial values.  In this example, if you find that your favorite neighborhood shows an average credit card debt of $17,500, average car loans of $29,000, and an average annual savings rate of 1%, you know that you’re looking at a neighborhood of people making bad decisions.  You do not want to move here!

Alternatively, more precise financial details could be used to encourage neighbors to boost their own financial statistics.  What if you were told that your average neighbor had no credit card debt, no car loans, and a savings rate of 20%?  Would this make you want to keep up with these Joneses?

Question

What kind of consumer financial information would you want to see on your Google Glass display?

4 thoughts on “Staying Away From the Joneses”

  1. That Google Glass app would be awesome! I have a couple thoughts:

    1)The way people spend their money fascinates me to no end. I’d love an app that display a little bubble over everyone’s head: It would show age, income, debt, net worth, car, annual spending, etc! I realize that this is a ridiculous idea, but if a genie ever grants me a superpower…
    2) There was a huge clue that I think could have told us that the neighborhood we moved to was horrible; foreclosures. In our little enclave of about 50 homes, there were 4 foreclosures that we knew about. Our old little community in Wisconsin, while having 100s of homes, had only 1 foreclosure. If you’re living a good and financially responsible life, you should have a nice, fat egg saved up to get you through the rough patches. The fact that the foreclosure rate in our neighborhood was almost 10% should have raised a huge red flag. Also, this feature could easily be integrated into your Glass app!

    Nice post and I feel bad for the people moving out of your neighborhood. They have no idea how adversely their lifestyle inflation will affect them down the road.

    1. Adding foreclosure stats is an excellent idea. I’m on board for all the stats on item 1, except for age. I like to keep people guessing about my age. It motivates me to take care of my physical health 🙂 Though you probably included that as a gauge of now much an individual has saved given their age (e.g. 30 vs 50).

  2. What an interesting idea! Hmmm, if I wanted to know about my potential new neighbors, this data might be useful:
    – Average length of time in the home
    – Average age
    – Number of children under 18
    – Number of Millionaires
    – Number unemployed
    – Number of small business owners
    – Number of bankruptcies
    – % of homes rented vs owner-occupied
    – % of fixed vs ARM loans
    – % of loans at 30, 60 or 90 days delinquent

    I’ll stop there, but I think you are on to something…I hope you find a way to make it happen!

    Ree ~ I blog at EscapingDodge.com

    1. Great list Ree. I was considering the “millionaire” item as well, it would put real numbers behind the idea that you may have a “millionaire next door”.

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