Keeping up appearances can break the bank

YOU should never judge a book by its cover, so the saying goes, but let’s be honest – we just can’t help it. When meeting someone for the first time it’s all too easy to pigeon-hole them. We immediately make assumptions based on clothes, accents, jobs and more, regardless of whether this is fair or not.

Many of us are all too aware of what people think of us too and results from a recent survey suggest that many people are getting themselves into financial bother in their pursuit to keep up appearances.

According to research by financial company Credit Expert, over a third of Britons admit to judging people based simply on what they’re wearing. The results also show a worrying trend for spending beyond our means in order to appear well-off to our peers. It seems that the recent credit crisis won’t be stopping us trying to keep up with the Joneses any time soon.

The Wealth Tells survey clearly reveals that we make snap financial decisions about others when we meet them, with choice of clothes being named as the top indicator of other people’s wealth. It seems the label says it all for 34 per cent of Britons.

The next most popular indicator we look for is jewellery. Lots of bling tells 20 per cent of Britons that you’ve got a healthy bank balance. After that comes watches. An expensive watch means an expensive lifestyle for 15 per cent of people, the same percentage who judge according to the number-four indicator, shoes. Fifth in the list is hair. A good quality hair-do is all you need to impress one in 10 Britons.

Of course, gadgets also play a big part in how people are judged. What self-respecting businessman or woman isn’t technologically mobile these days? But these electronic devices are one of the main reasons we’re stretched beyond our financial means. The purchase of wizardry such as iPods and Blackberrys were blamed for 10 per cent of us going into the red.

But does all this showing off really make a difference? Well, apparently it does. Almost a third of Britons admit to acting differently around wealthier people. Many admitted to feeling jealous or even nervous in front of people they perceive to be richer than themselves and are consequently more likely to talk up their own experiences in a bid to impress others.

Jim Hodgkins, managing director of CreditExpert, says: “The desire to keep up with friends isn’t new and there is always a temptation to use credit to do so. But using credit to fund a lifestyle you can’t really afford can lead to huge financial problems and if you don’t keep tight control of your spending and how much you’re borrowing, you can easily find you can’t afford the payments and start to fall behind with them. 

“If that happens, you’ll soon make yourself less financially attractive to lenders and find that you can’t get access to the best possible credit deals. With lenders reacting to the credit crunch by tightening their lending criteria, you can help stay on top of your borrowing and how well you’re managing your finances by regularly monitoring your credit report.”

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