Ever wonder where the phrase “keeping up with the Joneses” comes from? It was coined by a comic strip of that same name, written by Arthur R. “Pop” Momand in the early 1900s. It first printed in 1913 and ran for twenty-five years. As you might expect, it was about a family who was constantly trying to keep up with their neighbors, the Jones family. The wife, mostly, was constantly trying to do all the rich and elaborate things that the Joneses did, even though it was outside of their means to do so.

The history of credit is a surprisingly lengthy one, dating back prior to the 1900s (likely even further in a different version than we are used to today). But credit was never meant to be the trap it has become. It was a way for someone to get what they needed today and pay for it at a later date when they were able. Unfortunately, as it became common and very simple for anyone to get at least some credit, it has also become common for people to take it for granted and soon find themselves in a mountain of debt.

Don’t get me wrong—credit got me through some tough times and I am very grateful for it. But it also took me a long time, a lot of hard work, and years of pinching pennies to pay it all off. We need to keep a diligent eye on what we’re spending and strive to live within our means as much as possible. Sure, using credit from time to time is okay and even necessary. After all, who can afford to buy a home without a mortgage? And it sure is nice to pay with a simple swipe of a card rather than to count out dollars and change. Not to mention, the people in line behind you would scoff if you dared to pull out your checkbook (I used to pay with this method all the time, but it’s unthinkable now!).

So, I certainly don’t mean to tell you to never use credit. I just want to warn you to use it with caution. It’s easy to swipe your card and not even notice how much your total came to. Be sure to pay attention to that final dollar amount on your receipt because it’s not an arbitrary number—you do actually owe that money back to your creditor, plus interest. Ideally, you should only charge what you can pay off in full at the end of each billing period.

The biggest negative factor to the credit game is that our dollars don’t stretch as far as they used to. What you could buy with a dollar yesterday will take two or even three dollars today. Take a look at this comparison of prices from 1940 to 2022 (a range of 82 years) to get an idea of what I mean.

It looks okay at first glance, right? I mean, minimum wage is much higher today than it was in 1940, so it makes sense that the costs of products would also rise. But if you consider why wages and prices are increasing at all, you’ll realize that the bottom line is that the dollar is losing value with each passing year.

“The dollar had an average inflation rate of 3.76% per year between 1940 and today, producing a cumulative price increase of 1,965.06%” (In2013Dollars). Yes, you read that right. At this rate, something that cost $1 in 1940 would cost $20.65 today, drastically reducing the real value of that original dollar. In other words, that same dollar doesn’t buy as many goods today as it did yesterday.

Next Time…

…So, what is the answer? Unfortunately, there is not a simple solution to this problem. But be sure to check out the concluding post of “Keeping Up with the Joneses” next time, where I will further discuss inflation and my personal newly adopted plan to hold the value of my savings as best I can, discovered through working on a wonderful book with one of my clients!