Friday, April 29, 2011

Luxury Brand...For Kids

The Stanford shopping center is one of my favorite places to find ridiculous extravagance. On any given weekend, you'll find at least 10 dogs being pushed around in baby strollers and 3 others wearing designer shoes. No joke. The parking lots are filled with Mercedes, BMWs, and Porches. Well, you get the idea.

What I find the most unnecessary though, are the luxury clothing stores for children. There's a range of offerings from "lower" priced Gap Kids to Crew Cuts by J.Crew to the Burberry Kids Store. Yes, Burberry Kids. I've never been inside, but from having an idea what things cost in their adult stores, I can deduce that it must be pretty ridiculously expensive. Grownups spending that much money on clothing is hardly justifiable as is!

Little children don't know much about luxury brands and how they are different from non-luxury goods. These kinds of knowledge are taught by parents or other adults around them. You can claim that the material used in brand name items are better and may last longer, but why in the world do you need children's clothing to be long lasting anyways? Kids get their clothes dirty and grow out of them in a few months. Paying thousands of dollars for an outfit under these circumstances doesn't seem to be worth it.

Monday, April 25, 2011

Putting Your Money Where Your Mouth Is

A week ago, I got an email invitation from a friend via At first, I didn't know what to make of it. The email said that this friend needed my support. Ummmm...I'm glad I seem like the supportive type, but with what? After an interesting discussion with this friend about, I gladly joined the weight loss "support team."

So what's the deal with this site anyways? Well, have you ever had a goal that you'd love to achieve but can never actually find enough motivation to go through with it? I'm sure we've all encountered this. (I've been meaning to do a triathlon for over a year now...) Well, this site gives you that extra kick in the behind you may need to accomplish this goal.

Here's how it works: after registering for the site for free, you'll publish your goal. Then comes the incentive part. You'll have to decide on an amount of money to lose if you don't accomplish this goal. For example, my friend has a weight loss goal of losing 1lb a week for 11 straight weeks. For each week this doesn't happen, it'll cost 10 bucks. In addition, you can name a referee to keep you honest and recruit supporters to cheer you on.

And where does the money you lose go to? It can be paid to friends and family or even a charity. But by far the worst thing that can happen to your hard earned cash (and perhaps the best thing for accomplishing your goal) is to have it go to an anti-charity. What's that you say? It's a cause that you feel strongly against. For example, if an avid supporter of walking barefoot can designate his money to be donated to American Soles*, a shoe charity, if he slips up.

Interesting concept. I recently listened to a Radiolab podcast about psyching yourself into not doing something by committing to a cause that you absolutely cannot stand. On the show, a woman quit smoking cold turkey by telling her friend that if she ever smokes again, she'll have to donate money to the KKK. She hasn't smoked since. StickK offers something similar: an announcement of the goal, a referee and supporters (the smoker's friend), as well as financial incentives and an anti-charity (donation to the KKK).

According to StickK's own website, people are 3X more likely to achieve what they set out to do using this method. They should know. The company was started by 3 Yale professors familiar to the field of behavioral economics. The last I checked over $7 million are currently on the line through the site. For now, I'll stay a "supporter" of my friend. But maybe in the near future, I'll jump on the bandwagon in order to get things done!

*American Soles is not an actual far as I know.

Sunday, April 24, 2011

What Prompts You to Change?

With gas prices at $4.25 a gallon in my area, everyone's talking about driving smaller vehicles, hypermiling, carpooling, etc. So I started to wonder what can really change people's behavior when it comes to handling money. Perhaps more importantly, how permanent is it?

The last time gas prices went off the chart, Americans collectively reduced the amount of driving we did and stopped buying SUVs. Some thought it was going to trigger a movement towards green energy as well as a realization for us to stop consuming so much oil. That consumption reduction didn't last long though. Gas prices lowered and we pretty much went back to our old ways.

Wednesday, April 20, 2011

Ways to Do Good for Others and Yourself

We all want to do what we can to help others, but sometimes it may seem like our time and budgets won't allow for it. I can think of a few ways to be efficient by combining contributions with ways to benefit yourself.

Every once in a while I catch myself hoarding things. It's less of a problem now, but I used to buy things compulsively more often. As a result, I ended up with things that I didn't need but were barely used. Because these items were usually new, I didn't like the idea of throwing them away. So when I can't deal with the clutter of stuff anymore, I tend to donate them to Good Will or similar organizations. It's really the best way to clear up your own space and help others at the same time. Do check each organization's website before you donate to make sure you're not adding to their burden by giving them things that they don't need. If you itemize on your tax return instead of taking the standard deduction, you can even write them off.

Monday, April 18, 2011

Pay Attention to the Math

I know, I know, math is a lot of people's least favorite subject, but as we know in personal finance, it can be pretty helpful. Unlike what we did in school, the skills required are pretty basic, and it'll give you the satisfaction of knowing that you're not getting ripped off. It's important to be able to make quick calculations on the spot for price comparison. Moreover, it can be helpful to know whether something is as discounted as a retailer claims it to be.

A few years back, I noticed a math error in Saks Fifth Avenue's advertisements (Off 5th to be exact). The company added the original discounted percentage to the additional discount percentage for the total percentage of discount. For example, an ad claimed that you'll receive 20% off of something and get an additional 10% off for a total discount of 30% off. That's simply not true! It's a total discount of 28%. I know it's not a significant difference (although if you're purchasing something from Saks it might be...). Those advertisements disappeared for a while, but they came back recently. So keep your eyes open for these false claims.

Saturday, April 16, 2011

Being the Odd Man Out at Work

I wrote about the peer pressure I felt when I decided to not go on a partially subsidized company "bonding" trip in my A Different Understanding of Budget post a few days ago. It made me a little uncomfortable to have to turn down the opportunity. At the same time, I also wondered if it was a good career decision. Since I had to pay for part of the cost (ski equipment rental, lift tickets, gas, etc.), I felt justified not attending. If cost was not factored into the decision though, I believe not going would have been somewhat of a negative career move.

Why? First of all, it was the inaugural group bonding trip (partially) paid for by the company, and it took some lobbying for it to finally happen, too. Also, from previous posts, you may know that I work for a small startup of less than 15, which made my absence that much more noticeable. During my decision making process, I can't help but wonder if not going would make me seem like I wasn't being a team player.

Monday, April 11, 2011

When Trivia Isn't So Trivial

Okay, today's blog post is devoted to me gloating. That's right! I'm super proud of myself because I saved someone hundreds of dollars by knowing somewhat of a random fact about state vehicle laws in California. I'm no lawyer, but I do keep an eye out for economic changes that might make my wallet fatter one day. Well, I guess it paid off. I didn't make myself richer, but it sure feels great helping someone out!

Recently, my co-worker came into the office late because he had to take his old car to the shop after a failed smog check. He had recently bought a brand new car and was trying to sell the old, barely functioning one to someone for a little under 1000 bucks. That was before he failed the smog check. Now, he has to either fix it or sell it at an even greater discount. A repair would probably cost him between $400-$1000, depending on the mechanic and cost of parts.

Sunday, April 10, 2011

A Different Understanding of Budgeting

In the beginning of this year, the CEO of my company announced that every quarter, our small startup of less than 15 people will set aside a budget to partially subsidize an activity for all of us to "bond." In February, a ski trip was planned for this very reason. It took me a long time to decide whether to attend or not, but I ended up not going. The main reason was my discretionary budget. Although the company subsidizes part of the cost of food and stay, I'd still have to pay $25. On top of that, I'd have to pay for lift tickets, equipment rental, and gas. It hardly seemed to be worth it since I would have for sure exceeded the fund.

I was only 1 of 4 people who didn't go on this trip, and was pestered by questions of why I was not attending. Talk about peer pressure! Well, for the most part when I told my co-workers that I couldn't work it into my budget because of the additional cost of lift tickets etc., they readily accepted the answer. But one of the people I gave that response to proceeded to ask me: "Isn't the point of a budget to spend it?" Hmmmmm...I guess I never really thought of it that way, but I must disagree.

Wednesday, April 6, 2011

Age Discrimination in Retail and Services

This is something frustrating I encounter very often. I look young for my age (mid-20s), so people who don't know me often assume that I'm a college student. That's fine and all, if it just means that I get carded more often. Turns out, somewhat logically, people also assume that because I look young, I also have less buying power. Because of this, I find myself receiving less help in retail stores or get talked down to when I do receive services.

The examples that stand out the most for me are at financial institutions. I often get representatives who talk to me condescendingly or assume that I don't have much to save/invest. I had even been skipped over in line at Bank of America so the rep can help the old couple who came in after me while I sat there and waited for another 20 minutes.

Monday, April 4, 2011

What Luxuries Would You Give Up?

MSNBC's Life Inc. blog recently posted the result of a survey showing a list of "luxury" items or services that are deemed untouchable by Americans. So which luxury item/service can most of us not do without? The internet, of course! 81% of people surveyed indicated that internet services are untouchable followed by 61% for basic cable and 42% for haircuts and coloring. I must agree with the internet category. If it weren't for the internet services I receive at home, it'd be much harder for me to maintain this blog! But I'd consider a lower speed option in order to save money.

I looked at the survey data a bit closer to compare the answers for people between 18 and 34 years of age (Gen Y and some Gen X) to the rest of the age groups. When asked whether they've made any cuts in the spending categories listed, the least amount of 18 to 34-year-olds answered yes. Furthermore, the highest percentage of people in this age group indicated "untouchable" for 26 out of the 36 expenditures listed.

Saturday, April 2, 2011

March Budget Sum Up

Another month, another $100 discretionary fund. Well, I actually started this month in the red. Why? If you remember my dilemma in February, I ended up deciding to sign up for another month of boot camp (2, actually. I'm continuing in April). It set me back $127. I was almost inclined not to include it as discretionary spending seeing that the line between need and want here is blurry for me. To me, whipping myself into shape and working through an 18 month plateau is a need, but in the spirit of full disclosure, I ended up adding the cost anyways. It’ll also motivate me to find savings elsewhere.

The $127 turned out to be a disappointing investment. Not because the class isn't good. If it wasn't I wouldn't have signed up. The reason it was a disappointment was because I got sick for 2 weeks, so I wasn't able to attend half of the classes in March. I'm not beating myself up over it, though. Let's just count it was an "unforeseen circumstance." Life is full of surprises. Now I'll just have to make sure to take care of my body, and hopefully, this episode doesn't repeat.

The good thing about being sick though, was that I didn't go out much which resulted in the lack of chances to spend money. Excluding the boot camp, I spent a total of $84.47.

Here's a breakdown: