The credit crisis may be in full swing, but it has clearly not dampened our appetite for spending!

Over a third of us Brits admit to judging other people based on what they wear, with many of us tempted to spend beyond our means in order to appear 'well-off' to our peers despite the recent credit crisis.

According to new research from CreditExpert.co.uk, we make 'snap' financial decisions about others when we meet them, with jewellery and choice of clothes the top indicators of other people's wealth.

When confronted with someone who is perceived to be wealthier than us, a third of us admit to spending beyond our means in order to keep up!

According to CreditExpert's 'Wealth Tells' study, the top 5 indicators of wealth are:

- Clothes: the label says it all for over 34% of us Brits - Jewellery: lots of bling tells 1 in 5 Brits that you've got a healthy bank balance - Watches: expensive watches mean expensive lifestyle for over 15% of people - Shoes: a person's shoes reveal a lot about them for over 14%of Britons - Haircut: a good quality hair-do is all you need to impress 11% of people in the UK

The research, which looks at the way we control our finances, found that the latest gadgets, such as iPods and BlackBerrys, are causing 1 in 10 of us to spend beyond our means in order to look good in front of our friends.

Other reasons to spend beyond our means include dining out in expensive restaurants and owning tailored suits.

In fact, almost a third of us admit to acting differently around wealthier peers. More worryingly, 1 in 20 of us even feel 'jealous' or 'nervous' in front of people we perceive to be wealthier than ourselves and are consequently more likely to talk up our own experiences in a bid to impress others.

The 'Wealth Tells' study also reveals:

- Men are more likely than women to spend beyond their means in order to appear more 'well-off' to their peers, with almost 18% of men getting into debt for their cars (boys will be boys!)

- Women feel more 'self-conscious' than men in front of wealthier peers (15%) and are more likely to spend money on a 'good haircut' in order to look and feel more wealthy.

- 66% of 18-24 year olds admit to making snap financial decisions based on what people wear or look like, compared to just over a quarter of 55-64 year olds (28%).

- With age comes financial wisdom. The younger you are, the more likely you are to spend beyond your means in order to 'keep up' with wealthier peers; 66% of 18-24 year olds compared to just 36% from the 65+ age group.

Jim Hodgkins, Managing Director of CreditExpert.co.uk explains their findings:

"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. You can do so easily by using an online monitoring service such as CreditExpert, which will tell you how much you owe on all your cards and if you're up-to-date with your payments at the click of a button."

For a free 30 day trial to view your credit report, go to www.creditexpert.co.uk.

So, are you overspending to keep up your image or do you not care whether people think you are well off?

Why not let us know in the comments below?

© Experian 2008

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