I saw the SA post and just had to say a few things. Then again, I'm 21 so this doesn't hurt her point- still had to defend myself though (and my favorite corporate coffee).
1. Coffee is not that expensive. 3 cups of Starbucks a week costs me under $6. That's less than the cost of a single sandwich, and I always brought lunch to work anyway. What costs $4 is a mocha caramel chocolate chip honey chai latte with whip and stawberries sprinkles on top, or a "coffee" with some kind of syrup marketed with a sexy name like Cinnamon Dolce. But that's not designer coffee, that's designer ice cream.
2. I won't argue that $6/week adds up over the year ("That's $312 you could be saving!"). But think about it- for $312 you're getting 156 comfortably alert hours, many of which are spent with people you like. Put it in your "entertainment/luxuries" budget, cut out 12 meals out or one outfit and you've covered the cost.
3. If you want to save the environment and stop wasting cups, bring your own travel mug to the coffee shop. A lot of places give you a discount for that anyway.
4. Brewing your own coffee isn't that cheap if you buy the good-or-even-moderately-good stuff. I tried cutting out Starbucks and Coffee Bean for awhile, and I was spending about $8 every other week on ground coffee from the supermarket.
For people who don't love coffee this is probably irrelevant: just take the $312 and run.
I saw the SA post and just had to say a few things. Then again, I'm 21 so this doesn't hurt her point- still had to defend myself though (and my favorite corporate coffee).
I sold $27 worth of clothes I never wear to Buffalo Exchange (a consignment shop) today. That's actually decent for that store- they tend to take "mall brands" (Express, Gap, etc.) rather than super high-end items, so a few bucks for a shirt is a good deal. It's such a painful process though.
Unlike some consignment stores where you make an appointment (or a donation center where they're happy with what you can offer), you're instead subjected to some degree of humiliation.
On a typical day, a girl with eyebrow piercings, pink hair, and a studded plaid belt picks through your "gently used" clothes and makes an array of faces and loud comments to her coworkers. In one particular location, they make you stand/sit in front of the counter as they work. As I sat uncomfortably in the plastic chair (watching an employee skip around asking patrons to participate in a hula hoop contest- possibly to drown out the snide comments of her friends behind the counter), I realized that I was hopelessly out of place despite being surrounded by 20-somethings. Everyone around me had tattoos, checkered hats, and bubblegum pink lips. I'm pretty sure that they're what you're supposed to be when you're "young". Into music, concerts, "fun" clothes, forging a new and offbeat identity.
Apparently I have no identity. At least I have 27 more bucks.
I didn't drop off the face of the earth. Just got back from Boston for a psychology convention: 15,000 psychologists under two very large roofs. Does anyone know Malcolm Gladwell (author of Blink and The Tipping Point)? He gave a pretty decent speech on the rags-to-riches story and signed my book afterward. He essentially argued that without financial hardship, a number of extremely influential and powerful people would not have achieved the same success. There's certainly a flip side to the argument but I thought it was inspiring anyway.
Which goes to show that just because some of us have to take out loans and work before grad school, we might still reap the benefits.
People are so divided about who should pay for what when dating. Some of my friends have rules: first date the guy pays, then you split; never let the girl pay; asker pays either way. Some just do whatever feels natural when the check comes.
It's always a little bit awkward. I'm a big fan of always offering to split without pushing it to a level of embarrassment. My logic is to let the guy feel chivalrous if that means something to him, and not feel like he's snagged a freeloader if it doesn't.
More free online software I thought I'd share. It's the best task management application I've found (although I guess you can pay $25 for more features). My blackberry calendar alone was a little cumbersome and wasn't organizing my brain very well (when things keep beeping at me and disappearing, it's more chaotic than not having a schedule at all). Milk does sync up well to smartphones, gmail, iCal, etc. and, unlike with googlesync, when you add an event on your phone it then goes to your online account.
I am in love with thisonline software. It's like the simple, student-friendly, online version of Quicken and it's free. It's synched to my accounts (and my blackberry), so I don't get away with anything, and it does a decent job of breaking down my expenses into graphs.
If Excel isn't doing it for you and have fairly basic accounts/bills, this is the best way to track your finances.
Recent reports on the rise of online spending are making headlines. This isn't a surprising trend. Online shopping allows you to browse, research, and price-compare without putting a mile on your car.
For me, e-commerce takes the "shopping" out of shopping. Shopping for me means wandering through aisles with my Starbucks green tea lemonade, flipping through racks, asking a sales associate if this Bluetooth headset will make me sound underwater or if this sweater really is machine washable. It's about half-consciously listening to the store's carefully selected soundtrack and planning for lunch with a friend after. I am a sucker for every marketing gimmick a corporation wants to throw my way. In high school I ate up those ripped and shredded jeans like they were god's gift to man.
Like many people out there, this full-bodied experience is just no longer within my budget. Buying is now much more targeted and bargain-based, which is the draw of the internet. But there is something about a Paypal transaction that is just not the same as a stroll through South Coast Plaza. Not only is there a lack of instant gratification ("7-10 business days?! You're located in Riverside!"), but all that excess ambiance and planning is cut out. A transaction becomes exactly that. Show me similar items with a $15 price difference on the second floor of Nordstrom, and I'll take whichever I like best. Show me the same items online- one with a big red slash down the middle of its price- and I'll take the cheaper one.
You also eliminate the social aspect. There's no trendy friend telling you what makes you look skinny. This is probably the thinking behind these
So back to my question: does more online consumerism mean more rational, and less emotional spending? It seems like this would mean better values and fewer unnecessary purchases. Or, because we glean less satisfaction from our purchases (with the additional delayed gratification) are we just impulse-buy bubbles waiting to burst?
Iím sure this goes for a lot of schools, but I will say that at mine at the very least, students are champions of The Overshare. If I donít know you, I really donít care to know how much you drank, how many guys/girls youíre with, what prescription (and non-prescription) drugs youíre on, or how long ago your parents got divorced. A name and class year is generally a better start.
That said, there is one thing that very few people will talk about here even after youíve known them for years: money. The exceptions are the rare legacies that have buildings named after their grandparents, and the kid who makes a gigantic point out of telling everyone how little he spent on his thrift store clothes. Iím not talking ďmoneyĒ in terms of how much you make at your research job, flipping burgers, or even your i-banking internship. We all complain - or brag - about that. Iím talking about how much you really have in your bank account, how much is waiting for you in your trust fund, and how much your parents are handing you (or not) on the sly. Itís total taboo. Not only that, but there is a certain amount of shame attached and some students try to cover up the reality by buying killer clothes and entertainment systems that they canít afford. Weíre all supposed to say, ďIím a poor college student,Ē in the same way weíre all supposed to moan, ďIím never going to get into law school.Ē
The question is why? I can understand that as a working adult, how much you make is not a topic of polite conversation. For those in business/financial careers, it can be an indicator of your personal success. Actually I can understand why itís not a topic of polite conversation anyway, but the question is why are some students actively embarrassed about it? I find this is especially the case at my school, which is a small liberal arts institution where nearly everyone is the same age, living on campus, and working part-time if at all. No one is married, with children, or a finishing their degree after years in the work force.
The money we do and donít have is pretty much directly related to our parentsí success. And our parentsí success is often related to factors that we, and even they, cannot control. Divorce, serious illness, unexpected tragedies, and sudden unemployment creep into many familiesí lives and directly impact how many trips to Europe their daughter can make with her college friends- or how many textbooks she can get without a voucher. The flip side is that our parents' fortune is also not related to us (clearly, given the cost of raising a child). Yet you still see plenty of kids proud of all the bling their mom's workaholism bought them, and disdainful of their peers with less. The irony is that those kids have probably been working part-time since 14. **edit: I know some of you have trust funds and have also worked part-time since 14. I'm not really talking about you here. **
Sure, we can pad our own funds by working part-time and spending wisely, but even going off-campus to work is nearly unheard of. A part-time on-campus job is about all you can get away with before you start to feel a little awkward (this is of course completely different during the summer). Iíve had some friends explain, during uncomfortable conversations, that the money they get for those big $1,000 purchases come from hefty savings accounts that they manage. A few of them work for that money over the summer, a few dabble in stocks and other investments. But most of them have had those accounts filled up by the rents at one time or other.
This is not a complaint. My parents, too, have spotted me on many occasions when I needed it most. They have not, however, replenished my bank accounts for the sake of Spring Break or plasma TVs. What Iím really trying to get at is how bizarre it is for money (and whether we come from it) to be such a touchy issue. Some of us went to prep school, some of us went to public school, some drive a Mercedes, and some donít have a car, but weíre all applying for pretty much the same entry-level jobs.
Last year my friend and I tried the unhealthiest diet on the planet: the Master Cleanse. It lasted about 2 1/2 days. I donít think I need to tell you that drinking nothing but cayenne pepper, maple syrup, lemon juice, and salt water was not the spiritually enlightening experience it was touted to be. The hour after I gave up on it I consumed enough fast food to support a small franchise.
Now that I have entered into a pretty healthy relationship with food, Iíve realized that my affair with yo-yo dieting isnít over yet. My spending habits follow a very familiar pattern. Budget/count pennies/work/work/sleep/budget/rinse and repeat/SPEND SPEND SPEND SPEND/remorse/budget/count pennies.
The spending spree usually starts with the notion that I need to reward myself for 3 weeks of being a thrifty recluse (ďIíll get depressed if I donít do this!Ē). Itís not meant to be a spree at all. Itís just a trip to the grocery store to get a few necessities, a very focused trip to H&M for one scarf, and a low-key night out. As my diet-friend once said: good intention, poor execution. I come home with 15 pounds of organic out-of-season berries, and that quiet dinner with a friend turns into movie, which turns into drinks after, which all together turns into bank account depletion. Or even better, my latest feat: run off to San Francisco for 2 nights of clubbing and the Hilton (in retrospect this one was totally worth it).
Then itís always back to the drawing board. How can I account for my weekend and pay my rent the following week? Re-budget. ďI just wonít spend a extra cent for 3 weeks.Ē And- I donít. But by the end of week three, Iím restless, antsy, and ready to make up for lost time/dollars. I have a work-related trip to Boston coming up, but I am meeting up with friends there. Then all of my other friends come back the following week to LA. For a dieter this is the equivalent of a looming Thanksgiving dinner. I need to break the cycle before I go into financial cardiac arrest.
I thought I'd try to answer my own question.
I think there are a lot of reasons why my generation in particular is so caught up with labels (and not just Gap or Abercrombie, but Cavalli and Gaultier, too).
1. We feel that luxury is within our reach. Extravagance is not limited to the stars and ultra-rich. We don't dream about Chanel bags- we rent them, if need be, or we eat canned fruit for a month to afford one. We are less prone to idolize and more prone to emulate (think reality TV, youtube, blogging). I could never quite identify when my mom talked about her adoration of certain movie/rock stars when she was young- they could do no wrong, they were glamorous and chic and lived in a fantasy world. Today it seems like we're more interested in photographing our celebs with no make-up or unveiling their latest drug habits than in viewing them through rose-colored glasses. Underlying message: They're just like us! ...Or, "We're just like them!"
2. We associate luxury with being good to ourselves, not with irresponsibility. Commercials and our peers keep drilling into our heads that in a fast paced world, we deserve to be rewarded. A busy woman who takes a two-day spa and yoga retreat is being well-rounded and spiritual, not financially reckless. A career woman who works 7 days a week on the brink of burnout has her priorities out of whack. Unless, of course, her hard work is manifested in a Fifth Avenue address.
3. In spite of #2, we correlate our bank account with our work ethic. Despite a number of bestsellers highlighting the near myth of the rags-to-riches story, we still somehow believe that if we work hard enough we, too, can drive a Maserati. When we're scraping by and our friends are VIPing their way across the country, we secretly wonder if they're just more industrious/dedicated/ career-focused. And then when we have more than our friends, we think, "I worked damn hard on days that they were at the beach."
All of this culminates in the need to perfect an image- both as individuals and as a community- often at the cost of pure rationality. You don't really have to live in luxury, be good to yourself, or have a solid career; you just have to look like you do.
Imagine this: against your better judgment, you purchase a Gucci bag off ebay. Itís $150, so itís not so cheap that you suspect a Chinese knockoff, the Gís all look properly aligned, thereís a label of authenticity, and the seller explains that sheís just trying to do some spring cleaning to pay for college. She even has a return policy if youíre unsatisfied.
You get the bag in the mail and itís of excellent quality, and you proudly cart it to fancy malls and stylish events. It probably is about the same size and shape of what you could find at Kohlís for $25 but the fact that itís Gucci makes you feel on top of the world. Until: your Carrie Bradshaw friend pulls you aside and gently tells you that Gucci never made a hobo bag with that silver strap, not even during its early Ď80s slump. Suddenly that same well-sewn bag plummets in worth in your own eyes, relegated to gym bag status. Is this at all familiar?
Everyone knows that what we pay for in retail is image. The actual costs of materials and production are comparatively miniscule. Itís why we prefer Coke over its generic counterpart, an American Apparel plain t over the same t at Target. Itís the magic of clever branding. There comes a point though, when it reaches a level of ridiculousness. In fashion, the discrepancy between what we would pay for something designer and the same product non-designer is substantial, largely because there is almost no issue of functionality and its worth is dependent on image alone (yes, yes, I know that Citizens jeans last longer than Gap's...).
If someone told me that the ipod Iíve been using for 2 years was somehow not actually Apple, Iíd live with it. It still plays music and theyíll fix it for me at the Apple store, so who cares? Sure I paid $200 for it but it does the trick brand or not. A pair of pumps also has the same function whether theyíre from D&G or DSW, but there is a whole new level of outrage regarding authenticity. Why are [some of us] so unable to see things for what they are?
This blog was born out of my involuntary night in, walled off from the glitz of a Saturday night in Los Angeles by 4.15/gal gas prices and a rapidly dwindling bank account. All of my good friends (the kind you can enjoy without structured plans or loud, thumping music) are out of town. That left me home, eating carbs, feeling sorry for myself.
As I sat in the dead silence of my apartment, it occurred to me that I probably wasn't alone in this. How many other college girls were making small sacrifices in their social lives to keep themselves financially afloat? How many other girls, when faced with two choices, 1) drinking Coors Light in a casual friend's shabby apartment, in front of SoYouThinkYouCanDance reruns, for the sake of being "out", and 2) breaking the bank at an ulta-trendy club/restaurant/concert venue, choose to opt out completely? How many other girls are used to an inflated standard of living, maybe due to friends, parental loans, and a college education, that is just not reflective of their fiscal reality?
It's not just about an occasional night in. That in itself is not much of a complaint, and we could all use a few quiet nights for laundry and organizing. It's more about maintaining a lifestyle that is just out of reach. To be simultaneously told that you should want something, and that what you want is irresponsible excess. Which leads me to my first major list (because I love lists): What This Blog Is Not.
1. This blog is not a tale of woe. Barbara Ehrenreich is not going to write a book on this, and I am not going to raise groundbreaking issues on social justice and poverty in America. I know that it's a luxury to be able to make these decisions in the first place, particularly since I'm not saddled with extensive debt or family responsibilities. (The only life I've ever been responsible for was a NanoPet in 5th grade.)
2. This is not a mature personal finance blog, which you probably figured out already. I will offer no tips on managing your portfolio or billion dollar assets; I never advanced past Econ101 and I can't even afford a Netflix membership.
3. This is not some kind of frugal-gurl-fab-deals-for-under-$20 blog where I post links to Tampax coupons and list all the high end designers now offering lines at H&M. Not that those aren't helpful in their own right...
This is my own personal story of money and spending, which I feel is very reflective of a lot of young women out there today. We live in a culture where Lil'Wayne is declaring that that he "got money and you know it take it out your pocket and show it then throw it", while the U.S. Bureau of Labor Statistics is declaring we have the highest unemployment rate in 4 years. The Hills is selling us a couture-ridden 20-something lifestyle, when most 20-somethings' can't afford to fill their gas tanks. We aren't scraping together pennies to survive, and we still budget for spicy tuna rolls, yet we still squirm when an airline hits us with an extra $15 fee for baggage.
I guess I'll end by telling you who I am. I'm a psychology major on financial aid, about to start my senior year at a liberal arts school. I'm planning on a career in market research and ultimately an MBA. My parents are financially comfortable, but on fixed incomes and I have no trust fund or rich dying uncle. I love fashion but fall short of the genuine fashionista label (I can't tell you what hem-line will be a faux pas between Oct. 1st and 15th this year). I grew up on the East Coast. There's probably more, but you'll figure it out.