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Spring break is upon us, and although I never participated, I have plenty of friends who have. It’s a good time to let out some steam, decompress from school, and let it all hang out! So what does this have to do with Personal Finance? It could have plenty.
Look, I totally get the allure of going where there are no adults, the “beverages” are flowing, and good looking people wear very little. So do airlines, gas stations, hotels motels, etc. I’m not saying don’t blow off some steam, but understand that by doing so, you are blowing off a huge chunk of money as well. Personally, I’ve been to a lot of places, and just about everyplace has something cool for large groups of young people to do.
If you are still intent on going through this rite of passage, be smart about it.
- Understand that alcohol is expensive in many ways. First, it costs a lot up front. Second, if you are under-aged and are caught, bail is expensive too. I know the police are looking the other way more than usual, but do you really want to test luck.
- The pleasures of the flesh can wind up costing a lot too. Even with good insurance, you have to pay a Co-pay every time you see a doctor. Think of all those uncomfortable visits to clear out the last vestiges of a rocking spring break. That burning sensation– might as well be cash.
- As in yesterday’s post, children are expensive, and people at spring break are not known for their ability to make wise decisions about comingling their most valueable assets (if you don’t get it, ask your parents– they’ll explain)
- An addendum to the first point. People under the influence of alcohol tend to do stupid things that cost money that they wouldn’t do otherwise.
- Girls, think of the expense in hiring a lawyer if you are unlucky enough to get filmed displaying your tan-lines and have to sue some sleazy internet peddler.
- Guys, think of the expense in hiring a lawyer if you are unlucky enough to “hook-up” with a girl who later decides that what you two did was wrong, even criminal.
Now I contridict everything I just said. If you go to spring break, make sure you make the most of it and have fun. More important than watching your financial situation is to make sure you are looking out for your own safety!
All that being said, anybody doing anything cool for spring break? I want to know. Wil(at)finance4youth(dot)com.
I’m not going to say that I’m perfect, or that I’ve never made any dating mistakes, but there are a few things that young people do that hurt them financially, and they can be corrected easily.
1. If you are trying to make sure you are financially literate, why would you want to date someone who isn’t. I understand that they may be smokin’ hot, but is that really enough? (hint: no it isn’t) Avoid anybody who doesn’t understand your goals, or who is stupid about money. Believe me, you will thank yourself later.
2. Let’s be adults. If you are young, you probably don’t have a lot of money. Neither does the young person you are dating. Now that that has been said, we can move on to other things. If you can only afford McDonalds, don’t suggest Stewart Anderson’s. You are interested in dating the person, not their money, right?
Also, in this age of equality, girls, don’t feel like you have to make the guy pay for everything, and guys, don’t feel like you have something to prove by trying to pay for everything. Special occasions aside, there is nothing wrong with going “dutch”, where you each pay your own way, or with one person paying for dinner and the other paying for the entertainment, or even alternating who pays for dates. In the best of cases, you may eventually marry this person, and all the money will come out of the household anyways. In the worst of cases, you are saving by not spending on someone who isn’t worth your sacrifice.
3. There are plenty of cheap or free things to do. Going to the movie theater is not one of them. Also, day dates (great for spring and summer breaks from school) are usually far cheaper than evening dates. There’s nothing wrong with this, as long as you are enjoying the company of whoever you are dating.
4. This is really the most important, but I will go into the least detail. KIDS ARE EXPENSIVE!!! There are any number of ways to avoid having kids, pick one that works for your beliefs. I guarantee you that nothing will screw up a young person’s budget quicker than having an unplanned child.
I’m sure there are many more ideas, and if you have some, feel free to comment, or email me!
I remember being young and desperate for money. There were times when I would have done almost anything to get some cash. In fact, I’ve had some “jobs” that I’m not really proud of. The most embarrassing is when I was selling knock-off colognes and perfumes. I thought I was going to make a lot of money because, I’ve been able to sell almost anything to anybody when the mood suited me.
Turns out, that I wasn’t really “hired” to sell knock-off stuff. I was really hired to bring in other people to sell knock-off’s and I would get a portion of their sales. They guy who brought me in would also get a portion, as would the girl who broght him in. It wasn’t long before I saw the scam for what it was; a pyramid scheme or Multi-Level Marketing scam (MLM). Of course, I got out and never looked back.
Flash forward a bunch of years. My sister-in-law, Princess Edemame, is selling scrap book supplies. It’s good stuff, but it seems like she has A LOT of product. My wife (who wasn’t yet), bought some stuff, and others did too, but I didn’t understand the appeal. I thought it was a girl thing.
Flash forward a few more years, and PE was raving about this site that slams Mary Kay consultants and exposes the pyramid for what it is. She’s talking about how many people get sucked into “the pink fog” and how this is hilarious.
A few days ago, I’m checking through my blogroll to see what’s up, I go to her site, and start checking out HER blogroll. I saw the Pink Truth www.pinktruth.com and started reading. This brought out the memories of my own experience in MLM.
Young people are especially susceptible to the lure of these scams, because they promise lots of money to people with no experience in life. They also indoctrinate you, not unlike a cult, into their way of life. Pink Truth says it better (and way more frequently), but the simple truth is, with MLM, you only make money by sucking other people into the group and having them do the same.
The moral here: In most cases, the amount of money you can make doing anything is dependent on the amount of work, preparation, education, and sweat you are willing to put into an effort. If you are thinking joining a MLM, or have been approached by a “friend” who is a sales rep for any of these companies, before you pay out any money, check out PINK TRUTH www.pinktruth.com! If after reading, you still want in, at least you won’t go in blind.
Everyone I know has at least one cell phone. My parents have cell phones, and one of them is retired. Most of us will tell you we don’t know what we would do without a cell phone. It’s strange, because I clearly remember a time when none of us had cell phones, and we survived just fine.
We all have a schedule that pretty much dictates where we are going to be, and consequently, how to contact us.
So my problem is, do young people need the cell phone? Personally, I don’t think so, but I know that most of you would go nuts without them. My audience spends most of its time in school, where you shouldn’t have your phone on anyways (there is no reason to have your phone on during a lecture, no matter how inconvenient it may be to turn it off), or doing homework, where you can ill afford the distraction.
The biggest problem with cell phones that I see is the billing. I’ve become pretty good at saving on bills, but the temptation is there, because I know that I can make a TON of calls and worry about the bill later. As far as F4Y advice goes, you don’t need a phone. Reality says you are going to have a phone anyways. Do yourself a favor, forgo the 2 year plan, and go with prepaid service. This will eliminate the temptation to overspend, and you can more accurately predict your spending, fitting your cell phone usage into your budget.
For a lot of my audience, we’re coming close to that magical time of PROM!
I remember my prom as not being the most fun of my life, but most of that was because of the type of personality I have. Getting in large groups of people who are all dressed up didn’t appeal to me nearly as much as a good party in someone’s garage. I also remember the costs involved being way more expensive than anything for teens should be.
Limo
Tux
Corsage
(REALLY REALLY) expensive dinner
Pictures
Tickets
and I’m sure a lot of other things that I forgot. There is no way around paying all of these things, but there are a few ideas for limiting the expense to be more realistic. Starting very early to plan and save definitely helps too.
Limo- If you have a bunch of friends who are going, consider getting a bigger limo (like a Hummer) and all traveling together. Nothing says going to the prom like a really long Hummer. You all can share the expense, and the night can be a lot more fun because you are with the people you enjoy hanging out with anyways. If you do this, make sure you personally carry cab fare to get home, just in case things don’t go well, and after the prom, re-deposit that cab fare into your savings.
Tux- Tuxedos are overrated. A rental tux never looks good, and there is all sorts of requirements for getting them back on time, and cleaning fees, blah blah. Buying a tux is overkill, since it will probably be a single use item. If you don’t already have one, consider instead, getting a nice suit. You can wear a suit to job interviews, weddings or other religious ceremonies, or just about anywhere you need to be dressed up. Don’t wear the T-shirt with the tuxedo front on it–those are never cool, and neither are those who wear them to prom. Guys, this is as much about the girl who bought a stupidly expensive dress as it is for you.
While we’re on it, don’t buy an outfit with the intentions of returning it the next day. Doing so lacks class, and is childish. Besides, there is an inverse correlation between your intent to do so and the likelihood you won’t spill something or otherwise ruin the outfit.
Corsage- There are flower wholesalers almost everywhere that will have very nice flowers, and with a little work, they can be made into very nice corsages. Be creative!
Dinner- Unless you are going out with “someone special”, do you really need an expensive dinner? I’m not suggesting going to McD’s drive-through in the Hummer, but if that’s your thing, why not? Food is food. Go to a decent place. If you are going as “just friends”, girls, consider going Dutch. Less expectations there (’nuff said).
Pictures- Figure out which you want more– One posed picture with the guy’s hands sort of in his pockets, and the girls holding their head on their arms, or hundreds of pictures taken with your camera of everything. Talk it over as a pair (couple). If one of you REALLY wants pictures, and the other is ambivilant, or doesn’t, then the one who wants them should pay.
I didn’t mention saving on dresses, because I am a man, and I know that anything I say here is automatically wrong to women who want to dress like a pretty, pretty, princess. If there are any women PF’ers out there who want to share tips, please do, and save me the embarrassment.
Overall, this is not the ’50’s or ’60’s, and I firmly believe in gender equality. Girls, that means you should take on some of the burden here as well. Just because it’s your night to shine, the guy shouldn’t have to blow his life savings for –ahem– a dance, especially if you and he are ‘just friends’. Send a clear signal, pay your way.
More importantly than all of that though– I know that it sounds really cool to get all drunk during the night, but it’s not cool to have a friend holding your hair as you throw up, and it’s not cool, to be puking all over your new suit. Don’t drink. It’s dumb, it’s illegal, and the only thing it will guarantee is that you won’t remember your special day.
Finance For Youth is more than a series of blogs that educate young’uns about Personal Finance. That’s where we spend the bulk of our time, but there is more. We also:
- Search and research consumer products that are beneficial to young people.
- Review Financial Products for how good they are to young people.
- Speak at special events, assemblies, clubs, classes (like for Economics, or other appropriate classes), and other youth groups (both secular and religious) about Finance and young people.
Our speaking schedule is fairly limited, but we try to accommodate most requests.
If you are a leader or moderator of one of these groups and you would like to have Finance For Youth at your event, email our scheduling team info@finance4youth.com
In your email, give us the following information:
1. Your group name.
2. Where the event will be
3. The date you would like to have a speaker.
4. How many will be in attendance (approximately).
5. Your name.
6. Your contact information (include a phone number where we can reach your during day time hours)
7. Any other information that you feel would be important, such as topic requests, etc.
Due to scheduling, volume, and other considerations, we may not be able to get back to you immediately, but we try to respond to all requests within 48 hours.
This would be an excellent idea for any group of young people, (high school, college, etc) who wants to become financially literate, but doesn’t want to sit through a sales presentation for a bank, credit union, or credit card company.
A family member recently came to me with a problem. This person had been given (in my opinion) very bad advice, and bought a car. Recently, this car was in an accident, and the insurance was sending a check. The choices were:
- Spend the money on its intended purpose and repairing the vehicle back to the way it was
- Spend some of the money and bank the rest
- Spend some of the money on the car, trade it in and use the rest as a down payment for another car
- Save all the money.
This person was convinced that the right answer was to trade in her car for a newer one that would have less miles and less problems. Hopefully, I convinced her otherwise.
What she wanted to do is pretty common for young people. She is making payments on a car, and she figured that it made sense to roll that loan into a loan on a newer car, and extend the term.
Her car was worth about $2700, and she owes about 3,000. This gets into the concept of NEGATIVE EQUITY
Many many, many, MANY young people feel that the vehicle they are in now sucks so bad that it will be worth paying a little extra just to get into something better. The problem is, young people can’t usually afford something much better than what they are driving. This puts them in another sucky car, and another one (all with balances from previous cars being tacked on), until they are paying premium car prices for economy cars.
My advice to my family member: Fix what needs to be fixed so it is functional. Put the remainder down on the principal of the loan. If you have any wiggle room in your budget at all, put some extra each month to the principal as well. Once your car is paid off, decrease your insurance coverage to be more in line with the risk, but keep making the same car payment — to a savings account. Drive your car until it gives up completely, and use the savings you’ve built as a down payment towards a new(er) vehicle. The payments you have been making to savings can now be your monthly payment. You know you can afford it, and it won’t break you.
“But all the other PF people say it’s dumb to finance a vehicle. Wil, how could you suggest something like that?” Look, I still believe young people shouldn’t buy more than they can pay in cash, but I know that people like driving something nicer. And don’t give any crap about paying depreciation. I know it’s not a financially smart move, but, again, it’s only really an issue if you keep trading it in. My point is, IF you feel that you NEED to get a newer car, there are ways to do it, and ways to NOT do it. Negative equity is the way NOT to do it.
I’ve been getting a lot of questions lately about blogging, specifically PF blogging. A lot of new people are coming on the scene every day, and they all want some sort of mentoring. For some reason, a lot of them have been coming to me.
I’m flattered by this, and I really appreciate everyone’s confidence and faith that I will be able to help them. I hope that I can continue to live up to that confidence and earn that faith. I am, at heart, an educator, and I look forward to any opportunity to help educate the next generation.
That being said, as some of you out there may have already found out, I can be brutal. I can rip something apart if I think it doesn’t live up to the potential or the desires of those who ask for my opinion. I don’t do this to be mean, on the contrary, I do this because I feel obliged to care about what you do as much as I think you care about what you do. I think this is better than patting you on the head and marvelling at what a good job you are doing. I think you deserve better.
To that end, here are the rules, so anybody who wants to ask my advice or opinion knows.
- Do not ask for my advice or my opinion unless you really want to hear it.
- I don’t believe in platitudes, and I don’t want to waste either your time or mine by blowing smoke.
- No matter how negative I sound, it’s important for you all to know that I will only be negative if I think it will benefit you. If I didn’t like you, or if I didn’t really like your work, I would ignore you, your work, and any request for help.
- I’m not perfect. No matter how much I want to believe otherwise, at the end of the day, my opinion is really just that– My opinion.
- Don’t feel that you have to change who you are or what your message is just because I ripped you apart.
- You know better than I do, what your message is, and who you are aiming for. Feel free to disregard any advice I give if you feel that it is stupid.
- If you choose to ignore my advice, please don’t ask me for different advice. I won’t give it. My opinion rarely changes.
If you look at my blogroll, you will see a new category labled “F4Y picks”. This will be a community of sites that I really think have the game down. These are going to be the blogs that I frequent the most, and these will be the blogs that I will refer my readers to if there is a question that I don’t feel is best for me to answer. This is a tough group to belong to, and to be fair, I will not move any of my current blogroll there unless a) they ask, and b) their site passes muster.
If you are a blogger, and you wish to become a F4Y pick, e-mail me at: wil@finance4youth.com. Leave me your name, the site name, a brief description of your theme (message, not template), and a reason WHY you believe your site has what it takes. I don’t know what all criteria I will be looking for, but if someone wants to grease the wheels, a link to my blog will certainly help. Of course, so does candy.
If you are a blogger, especially a PF blogger, and you want my opinion or advice on anything, also email me at: wil@finance4youth.com. There are a few of you out there who can vouch that I will personally answer your request.
Thanks!
-W
William J. Stanton
Founder, Finance For Youth.
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