301 | Keeping Up Appearances

How many lawyers look like they have it all on the outside but are secretly living paycheck to paycheck and stressed about their finances?

Unfortunately, it’s probably a lot more than you think.

In this episode, let’s talk about the tendency of many lawyers to spend money to keep up appearances without thinking about the impact to their finances.

• • the desire to keep up the appearance of a successful lawyer
  • society’s obsession with luxury
  • the negative financial impact people often experience
  • visible and invisible markers of wealth
  • two lawyers’ experiences with keeping up appearances at the expense of their finances
  • looking wealthy vs. building wealth
  • striking the balance between buying things you enjoy and maintaining healthy finances

• Need help with your finances? Schedule a consultation here

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back.

Today we are talking about keeping up appearances. I have talked with a lot of lawyers over the years and there’s often this common thread of believing that they should have certain things or they should be a certain way because they’re a lawyer.

And it’s this thing that I think keeps a lot of people from having the finances that they want to have or being in a better financial position because they’re spending all this money to keep up the appearance of what a successful lawyer looks like.

The thing is, in the work that I do, it’s helping people who are not where they want to be financially. And so from the outside looking in, these lawyers have it all. They’ve got a great house, they’ve got a great car, they’ve got great clothes, their kids go to the best schools, they go on great vacations, all of this kind of stuff. But behind closed doors, they are crumbling.

They don’t know what’s going on. They’re stressed out about their finances, trying to figure out how to keep up with it all. Their bank accounts are just about empty or they are actually overdrafting. They’ve got all this credit card debt. And so the appearance is not matching reality.

I don’t know if the pressure to look a certain way or to have certain things is completely external, if it’s something that we internalize or what. But there is this overarching view in society that lawyers are part of the crew that has made it. And that lawyers shouldn’t have financial troubles, and that lawyers are rich and all of this stuff.

But it’s not just an absolute truth. It’s not necessarily the case. But I think because of that view, a lot of people kind of internalize this pressure to display a certain appearance because they want to match what other people expect of them.

I think there’s also this pressure in society at large, even apart from people being lawyers, where you’re seeing people going on all of these fancy trips and having certain clothes and that stuff is glorified over just having an average life, a normal life.

There’s a lot of the luxury lifestyle that is promoted as the life that you want to have. And so you also see even in professions outside of law or in other work settings, like people who are in different jobs, you see a lot more luxury products people are buying. You see these luxury companies advertising where they didn’t used to before.

And so there’s just this… overarching sense of luxury and reach for more and do more and all of that. And then I think it’s heightened by being in a profession like law where you are deemed to have been or to have made it.

But this pressure that we put on ourselves to project a certain image is not healthy for our finances. So if you’ve got the luxury bags and you’ve got the fancy car and you’ve got the big house, but you don’t have any money, does it really matter?

Like you’ve got all the stuff, but you’re stressed and you’re waking up at night and can’t sleep and you’re dodging calls and all of that kind of stuff because you are putting all of your money, all of your payments into this appearance that you have.

There have been so many studies that show that people who are making six figures, multi-six figures, are still living paycheck to paycheck. And it’s really unfortunate because it doesn’t have to be that way. And I think it’s a matter of thinking about what’s really important to you and deciding would I rather have these items? Would I rather show this image or would I rather be in a more financially secure place?

And let me say, this is not to say that you can’t have luxury items at all and nobody should buy those. I like nice things too, but I think it’s a balance. So rather than trying to have all the things and putting all of the stuff on these different payments and buying it on your credit card and whatever else, it’s deciding which things are most important to you and spending money on those things, but saving money elsewhere.

Or maybe you’re buying these things, but you don’t buy them as often. You’re not buying some designer something every month or every other week or whatever. You’re doing it in a more balanced way.

The visible markers that we show, the house, the car, the clothes, the trips, all of that, really don’t mean much if you are not where you want to be financially. The invisible markers of wealth, like your bank account balances, your investments, your savings, where your credit card balances are, those things matter a whole lot more. And I wonder how much different the world would be if there were some way for us to display where we are financially.

Like if they’re, you remember the Sims, I think it’s still, it’s actually a thing, but the game, the Sims, how they had that little like green thing over their head. Like what if everybody had their financial status over their head? And so even though you see the house, the car, the clothes, you can also easily see, oh, this person is not where I would want to be financially. This person that’s in a more modest house, more modest car, whatever, and has like, the good finances, I want to be more like that person.

I wonder if there were that external visible marker of where we are with our finances, if that would change people’s financial decisions. Because I think it really is this trying to put on appearances for other people that’s causing these negative decisions. It’s causing these decisions that are putting people in these stressful places.

Like I talked to one person and she had bought her dream car, but the payment was like $1,000 a month. And she was stressed trying to keep up with the payments and all of that. And then on top of that, the service cost a lot more than what her other car was. And it just, it seemed like she wasn’t quite in the place where her finances could handle that car, but she wanted that car to show that she had made it.

There was another lawyer who each time she got some sort of raise or increase in her income, I think she was, maybe changing jobs and got more or something like that. I can’t recall the specifics of her situation, but it was like with each income increase came some new higher payment.

She also got a luxury car and they got this house that was, you know, more than what the old house was. And then when the property taxes were redone and the payment went up and now things are stressful and it’s just so many stories that I’ve heard where people are taking on these things, the luxury status item to show that they’ve made it, but then it leads to financial stress.

And again, I think it’s because the underlying finances are not the focus.

We’re not thinking about what is best for my finances. We’re thinking about what will other people think. And so that’s where my whole train of thought of like, what if our financial status was kind of on display for everyone to see, would we make different choices? I don’t know. But the thing that I want you to take away from this is don’t worry about keeping up appearances and trying to look wealthy. Worry about actually building wealth.

If there are some of those status symbols that you like and they can fit into your financial plan, fine, go for it. As I said, I like nice things. I have bought designer things myself. I don’t think there’s anything inherently wrong with it. You just want to make sure that when you’re buying those things, they’re not taking you off track from where you want to be financially.

So make sure that you’re thinking about your overall finances and not just the picture that you’re portraying to the world. Think about the things that are actually important to you and that you value. We’re not buying stuff just for the sake of buying it to say that we have it. There might be things that your colleagues or your neighbor or whoever else buys that you don’t care about.

Just because they buy it doesn’t mean that you have to.

So think about those things that are important to you. And then from there, looking at your income, looking at how much money is coming in, decide where you want it to go, align it with those values, those things that you are, that are important to you. Those things that bring you joy, right?

Make sure that you’re spending your money in a way that fuels what’s important to you and not in a way that leads to you in financial stress because you’re trying to keep up appearances. Focus on your financial picture overall and not just what things look like on the outside.

If the things that I’m talking about in this episode resonate with you, you are that lawyer who has all the things, has it all from the outside, but inside your finances aren’t where you want them to be, I can help you. Head to rhothomas.com/call and schedule your consultation.

Alright, that is it for this week’s episode. Please share this episode with a friend or two who you think could use this information. Sharing is how we get the information in the hands of more lawyers, and as always, I appreciate your support.

As we close out, friend, I pray that you take the information you learn here, apply it in your life, and open up to the realization that wealth is available to you.

As you do that consistently, week after week, you’ll continue to take steps to take back control of your time, build wealth and live the life of freedom and choice you deserve.

Talk to you later.