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« Interesting Money News from Around the World: Economic Freefall Edition | Main | Details on SmartyPig »

October 02, 2008


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On #4 - reducing your retirement overhead is more important (and easier to achieve) than amassing a huge pile of cash. A million bucks doesn't go far when coffee is $20 a cup, but only needing a few hundred dollars (in today's dollars) to live per month reduces the impact of inflation.

I disagree with this one : "$50 is when you're paying for the name on the shoes, not the shoes"

Anecdote #1
This one really depends on what kind of shoe you're getting and what you're going to do with it. My dad got me a pair of $70 Rockports in 1997, my Sophmore year of highschool. I still have and wear those shoes regularly. Name brand or not, they're the only shoes I've ever had that lasted that long.

Anecdote #2
Last year I was starting to play racquetball about twice a week. I needed some tennis style shoes with more support than the ones I usually wear. I just wanted something cheap, comfortable and black/dark. I went to three stores. In my size (13 or 13 wide, depending on the brand) I only found one pair that was under $50. It was a discontinued clearance model, and it was white. I ended up getting shoes for under $50, but it was a challenge.

I agree with Michael about the shoes (although I know that was not FMF's statement). You can get a decent pair of jeans for well under $50, and above that is "designer." But with shoes, you really do get what you pay for, especially for athletic shoes. I would put the quality/brand division at around $80-90 for shoes. Exceptions being Kswiss, converse, certain brands of sandals, etc. These shoes you are paying for the brand since they don't offer exceptional support or quality.

Incidentally, I did have a pair of shoes that lasted me a good 8 years of heavy use and when I bought them at $50 I remember thinking that was a lot of money but my friend convinced me it would be worth it. She was right :)

For magazine subscriptions, if my anyone in our household subscribes for a magazine at all, we do it creatively. Since we like museums, subscribing to the Smithsonian works because we get things with it for Smithsonian museums. I do online market research studies, and so I get free subscriptions to magazines of my choosing. The only thing I'd ever pay for is The Economist, because it has a great perspective, one issue can last a month (even though you get two or three a month) and I feel more inteligent and informed after reading (as opposed to Time, Newsweek, EW, etc. The point is, there are ways to get magazines for free or to get subscriptions that include discounts which will benefit other areas of a budget (vacation, groceries, etc.).

FMF - PLEASE share your "class" for personal finance once it's developed. I have my own ideas but would like to see yours as well. Thanks.

This one stresses me out: Procrastination -- If there is one thing you get out of this article it's this: Whatever you are saving, it's not enough. The key is to start NOW.

This kind of thinking is what makes me feel like I need to hord money and not spend anthing. I am always saving 50% of what we make. 25% in retirement and 25% for emergency fund and large purschases. I can save anymore!!!

I agree with all of these. As an aside, I've never subscribed to a magazine in my life. I've never purchased a magazine. That's what your local library is for. Anything over a month old you can take home and read at your leisure.

The Power Purchase -- don't forget the other purchases -- I like to write down everything I buy in a log book, and see where my money is going. The little purchases are probably much more dangerous than a few big Power Purchases.

The shoe issue is a weird one. My sister-in-law is generally far more frugal than I am but she only wears Mephisto ($250 a pop) brand shoes. I called her on it once and she defended it by saying they last forever, have an unlimited warranty (I guess for when "forever" runs out), and that they're the most comfortable shoes she's ever worn. Her idea was that if she's going to splurge her feet were a good place to do so.

As the author of “The No-Cash Allowance,” an award-winning book on teaching children how to manage money, I am encouraged to hear that parents are talking to their kids about money during this financial crisis. However, our society has developed and fostered a dangerous disconnect between money decisions and being able to pay for these decisions. Parents can talk all they want but kids will not hear the message.

The reality is this: If parents want their children to grow up to avoid making bad financial decisions they must allow them to make small (and harmless) mistakes using real money while they are young. Parents seem to think that telling their kids how to spend is enough. It's like telling a child how to ride a bicycle and being surprised when they fall down.

Parents know that kids make mistakes while learning to ride a bicycle, yet they don’t want their kids to make mistakes with money. This results in parents retaining control, telling and directing, not realizing that they are depriving kids of the chance to make their own decisions and learn from the results. As any teacher will tell us, it is necessary to make mistakes in order to master a skill. Kids need to get the “big picture” view of their money and learn by experience that each decision affects the balance and the ability to pay tomorrow for what they bought today.

Kids need “experience now” using a reliable, repeatable and realistic method to learn money management. Skill only comes from having control of money while learning how to use it. Parents can (and should) provide hand's-on money management opportunities for their kids so they can grow up to be financially independent and not make the mistakes that are causing such economic pain today.

Parents can provide a valuable financial education for their kids using the method outlined in “The No-Cash Allowance.” It requires that parent be willing to give control and responsibility for money to the child. A no-cash allowance gives kids a “big picture” view of their money and shows that each decision affects the balance, a reality that will be constant throughout their lives.

Lynne Finch

I agree with Michael, sometimes spending a little more to get quality is better than going cheap and getting a cheap product.

However, I think the point of the post was to really think about and weigh the benefits of any purchase over $50 since most of us would consider that a significant amount of money.

Cyto --

I will -- but it may take some time. I've been working on it for awhile. :-)

The real key is to get those $50 brand name shoes for only $30. That is my strategy.

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