Highlighting the invisible

Most people track their mortgage or rent payments, their car, their groceries. Nobody tracks their status budget. But it's there, sitting in your spending like a hidden subscription you never consciously signed up for.
It's the difference between a Toyota that gets you there and the Audi that signals you've arrived. Between the $40 shirt and the $130 shirt. Between an online meeting or a coffee at the local cafe instead of meeting clients at the place with the name everyone knows, expensive food and $18 cocktails.

None of these choices are wrong. But they add up faster than you think, and most people never take the time to evaluate what they're actually spending to maintain the image.

On a recent discovery call with a prospective client, we identified the Ford Ranger he purchased several months ago made him popular in conversation with his circle of friends when he first got it but now, it’s like it doesn’t even exist. Reality set in he was now stressed with crippling repayments for something that in hindsight he didn’t need to buy. $900 a month, $10,800 a year disappearing out of his bank account for something he now realised he didn’t need.

He wasn’t living beyond his means. He was living beyond his priorities.

When status spending makes sense

Sometimes appearances matter. If you're in sales, client-facing work, or building a business, how you present yourself can directly affect your income. And that’s okay when it’s investment, not so much when it’s vanity. vanity. 

What you’re spending on haircuts and personal grooming might bring in $5,000 in new business. The suit you wear instead of a tidy polo when pitching your product or service might be the reason they trust you with the contract. The car you pull up in might signal that you're successful enough to handle their project.

That's strategic spending. You can measure the return.

Unfortunately human behaviour means most people apply that logic everywhere, to everything, all the time. The expensive gym because "you never know who you'll meet." The restaurants you are frequenting because "you never know who will see you there." Constantly updating your wardrobe because "image matters."

At some point, you're not investing in your career. You're paying rent on an identity that might not even be yours.

Numbers reveal everything, that’s why we avoid them

Pull out your bank statements. Go through your major purchases from the last twelve months. For each one, ask yourself did you buy it because you wanted it, or because of what it says about you?

Be honest. The expensive dinners might have been partly about the food and partly about being seen at that restaurant. The new laptop might have been partly about performance and partly about the logo. That's fine.

Just acknowledge it for what it is.

Now add up the status portion. Not the whole purchase just the premium you paid for what it signalled. The difference between what you bought and what you would have bought if nobody knew.

For most people in their late 20s to mid-30s making decent money, this number is somewhere between $800 and $2,000 a month. Some months more, some less. But it's consistent.

That's $10,000 to $25,000 a year so if this is you, what could you do with that money if you weren't spending money to look like you already have it?

When downgrade become upgrades

Here's what happens when you cut out the status budget. At first, it often feels like a step back. Maybe you’ve sold the expensive car and now driving a less impressive car, started replacing the wardrobe now with clothing that isn’t on the ‘New Arrivals’ rack and sourcing the next purchase from the sale rack (in reality this stuff isn’t even that old, retailer move stock frequently). Instead of the big overseas holiday you were thinking of putting on the credit card and worrying about paying it back later has become a more intentionally planned one that will keep you within a practical budget.

Here's what you’re gaining. Freedom to build actual wealth instead of performing wealth. Money to allocate for what you really want instead of playing it safe to maintain appearances. Space to figure out who you are when nobody's watching.

It’s not uncommon for clients I work with to cut their status budget by $800 - $1,200 a month and not miss it. Not because they became minimalists or stopped caring but because they realised they were spending to impress people who weren't paying any attention anyway.

People in your circle whether personal or business don’t care as much as you might think about these things, they are more interested in the real you.