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.

Putting Your Money Where Your Mouth Is

A week ago, I got an email invitation from a friend via StickK.com. 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 StickK.com, 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 charity...as far as I know.

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.

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.

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.

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.

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.