Are you caught in the status trap?

It is very easy to walk right inside a status trap. You find yourself in a situation where you spend all you earn, be in debt, and seem unable to find a way out. You look at your income and expenses and cannot seem to figure out what you can do differently. You are caught in a status trap. You have allowed your expenses to creep up to catch up with your income, leaving no room for saving and investment.

When you are caught in a status trap, most of your expenses are to fit with your status, or what you perceive it to be. Your environment plays a major role. Let’s take the high-brow area of Lekki Phase 1 in Lagos for example. The moment you move in there (that being a sign of affluence in itself), you are forced to blend in. Your car which seemed okay hitherto begins to look out of place. You feel uncomfortable dropping off your kids at school because your car does not fit in. In social gatherings, folks swap foreign vacation stories and tales of shopping expeditions at expensive shops abroad. You look out of place if you have no story of yours to tell. During summer holidays, the estate is virtually empty as most families travel abroad.

Gradually without knowing, you start to conform by stepping up your spending – buying a new luxury automobile (even when there was nothing wrong with your car), traveling abroad for holidays, paying a crazy amount of money as school fees in neighborhood private schools, shopping in posh boutiques and generally living the high life to fit in.

Sometimes the pressure is not from the environment. Often times as our income increases, we attempt to climb up the social ladder and show that we have arrived too. We spend money we do not have to buy things we can’t afford to impress people who may not even be looking. What if they are impressed? Then what? What value does it add to us as persons? The moment you stumble and fall from grace, of what value is the season wherein they were impressed with you? Why not go gradually and get to the top with a robust investment portfolio that can support our lifestyle rather than use our hard-earned income to put up appearances?

Whatever route you took to end up in the status trap, there is no way out until you eat the humble pie and decide it is not yet time to live the high life. There is a time and a season for everything. Until you drastically cut down your waste and focus on your financial independence rather than what others will think, you will remain trapped.

It takes courage to tell the truth to ourselves and course correct. If most of your income is funneled into maintaining your status rather than savings and investment, you are heading on a highway to nowhere financially. The best way to escape the status trap is to be yourself and face the truth – you are not there yet. There is no need to be in a rush. Life is in phases and is arrived at in stages. Your day will surely come. You have to pay the price in full first, by building a solid financial foundation so that your lifestyle is not built on quicksand.