Wednesday, May 20, 2009

How Much Do You Spend? On What?

What a change a couple of days can make. Two days ago it was in the 50's and I was wearing light jackets. Today it's 88 degrees and sunny. It went from early Spring weather to Mid-Summer weather. I had to turn the air conditioning on. Went out and ran 6.5 miles in this stuff and came back to the A/C. There are rewards in life.

Speaking of rewards, I started teaching a unit in Consumer Economics to two groups of high school Juniors this week. I may be doing the instruction, but the discussions with high school Juniors is instructive to me. For one thing they actually participate in the discussion. For another, their views of money and what they need tell me worlds.

We began a discussion yesterday of what are wants and what are needs, and I asked them to make a list of what they need, and to figure out how much those needs will cost for a year. I learned a lot from this discussion. One thing I learned is that girls and boys have very different views of what you need. Some kids have a practical streak a mile long, and know all the ways to cut corners. Some kids are hoping to marry someone very rich to support them in a style to which they'd like to get accustomed.

Some of the things we learned are "You might want a Mercedes, but your available resources may tell you to buy a Kia, or even a used Chevy, or you might have to settle for a bus card." "You might want an Armani suit, but your resources may dictate that you go to the Men's Wearhouse and buy a cheapie for a lot less."

Anyway, today we determined that food, shelter, and clothing are necessities. Then we began to lay out these necessities one by one and discussed how much they would cost. We had a discussion about how much it costs for a person to eat for a week, and talked about how you can eat rice and beans every night pretty cheaply, but how you need something more than that or you might die of boredom. We tallied up the cost per week. We tallied up the cost for a year. We put it on the board.

Then we got into clothes. This is where the real discussion began. We talked about socks and underwear and how much they cost. We got into the cost of jeans. How many pairs of jeans do you need? How many shirts do you need? How many pairs of shoes do you need? This is where the boy versus girl thing came in. I had one girl in my 3rd period class who thought she needed 15-20 pairs of jeans. Another was non-committal about how many pairs of shoes she needed, but it was apparent that she thought she needed a pair of shoes for many different sorts of occasions, moods, or days of the week. As for the girl with the need for a great many pairs of jeans, I found myself wondering, "Do you ever do laundry girl? Why on earth do you need that many pairs of jeans? Who's going to pay for these things?"

Now all of these things were verbalized in class and there was much giggling, but serious consideration. We talked about the fact that everybody has to go to weddings and funerals and needs at least one good set of dress up clothes, and we talked about how much that would cost. At this point we learned that a great many teenagers are very informal and don't feel the need to dress up to go to cousin Suzy's wedding or Aunt Edna''s funeral. Interesting point. None of the Mexican-American boys owned a suit, but the one African-American boy in the room owned a suit. Cultural differences on expectations and needs.

Finally, we took a look at rents, utilities, and such. I was actually surprised that most kids actually know how much their families pay in rent. Trouble is, most of their ideas about rent are based on how much it costs for rent on a place big enough for a family. I heard about rent on 3, 4, and 5 bedroom apartments. We had to extrapolate how much the kids thought it would cost to rent a 1 bedroom place for themselves. How much would it cost for utilities? I let them know that we were only considering absolute necessities, so cable TV bills, and telephone bills were excluded. We did include transportation costs so an individual could get back and forth to work.

Ready? The bottom line is somewhere in the neighborhood of $20,000 per year. One person, just to live a bare minimum life, needs $20,000 per year. I could see the awareness dawning in the eyes of these kids. Whoa! Just to get by, I need $20,000 per year. That means I need $20,000 actual dollars, not before tax dollars. $10 per hour will get you just about $20,000 per year, so you need $25,000 per year to make it. We'll be taking this idea forward, with that in mind. Meanwhile the girl with the shoe thing is still holding out to marry some guy with money. Maybe she will. Maybe she won't. At least I know she's planning on going to college.

All of this being said, I guess I wish someone had made me think about this stuff at a much younger age. I just sort of blundered through life for a long time and didn't really think about stuff. For that matter, if any of us really were pressed to think about what we spend money on, and what we really need, could we? Could any of us live up to my one student Jose's cheap as they come standards? Man this kid was lecturing us all. "Plan ahead. Think about what you need so you don't run out of money at the end of the month. Buy stuff in bulk, if you're going to use it. It's cheaper." Man I could hear this kid's bones squeak, he was so cheap. But he has a handle on what life costs and how to manage his resources. He's going to make it. Think any of us can meet his standards?

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