At a recent CARE presentation, one of the questions I received from a student was, what the silliest thing that I ever saw anyone go into debt for? I had to admit that there were a lot of contenders.
Before I share my winner, here are a few definitions of “silliest” that I was able to find: howing a lack of common sense or judgment, absurd, and foolish. Also, Foolish, stupid, unintelligent, idiotic,
brainless, mindless, witless, imbecilic, and doltish.
My winner is going into debt for “purely” cosmetic surgery that is in no way rationally business-related, and has not been prescribed for physical or mental health reasons.
Apparently this has become a bigger issue than it was at the time when I saw a few cases on the bankruptcy bench. In fact, USA Today even ran a story on this subject recently. Its advice was, if you are bound and determined to do it, either open up and fund a dedicated cosmetic surgery bank account to pay for it before you have the surgery, or open up a longer-term zero-percent credit card account, if you have good enough credit to qualify, in order to pay for the surgery, and then aggressively pay down the charges before you have to pay any interest or fees. Of course, I like the savings account alternative better.
By the way, here are some interesting costs, per procedure, cited in USA Today: breast augmentation, $3,718; liposuction, $3,374; nose reshaping, $5,125; and botox or similar treatments, between $385 and $ 1,951.
Here is another recent CARE presentation story. If you are a regular reader you know that one of my key lessons is: “Cash is King” — that people who use cash for their spending make different and better spending decisions; they spend less. That is because they are connected to their hard-earned money, so they want to get the best value for it. Also, that when you use cash, money is an object, not a concept, as it is when you use a phone, computer or plastic.
After a New Visions presentation at SUNY Brockport, Connor came up to me. He said that he and his mother were always “on” his father, because his father insisted on using cash as much as possible, not cards, which can take less time — swipe, swipe, swipe, and you don’t even have to sign anymore in most cases! He said, that they wouldn't be “on” him anymore, after all that he
had just learned about the power of cash, in part, from the stories of real people who had started to use more cash, and saved money.
On a different subject, I feel like I need to revisit gasoline prices, another one of my favorites. I thought that gasoline prices were supposed to be going down at this time of the year, because of the cheaper winter blend and less demand, but I haven’t seen that as I drive around town. The most recent data that I saw from the Automobile Association was that the average price for a gallon of gasoline in Rochester was $2.90, better than Buffalo, at $2.98, but not as good as Syracuse, at $2.84 per gallon. What really got my attention this last week is that I paid $2.53 per gallon at BJ’s in Henrietta, when the price was $2.85 per gallon at the Speedway nearest to my house. That is a 33 cents per gallon difference, the largest that I can ever remember. It is also a savings of $4.80 on a 15-gallon fill-up.
On a final subject, for 2019 college-bound students and their families, the FAFSA (Free Application for Federal Student Aid) became available on Oct. 1, and is due by midnight, Central Time, June 30, 2019, for federal and New York State aid. There can be other due dates for other states, so be sure to check them. It requires tax and other financial information, in order to determine the Expected Family Contribution. This is the perfect time for families to discuss personal finances, if they haven’t already done that. Here are some things that you can discuss: the importance of having a realistic budget that you can stick to; the need for savings, for emergencies, anticipated expenses, and to achieve other financial goals; and the advisability of avoiding, or at least minimizing, any debt, in order to avoid paying interest. These are just a few things that can easily be discussed between parents with their college-bound students, when finances are the FAFSA issue. In addition, it’s a good time to talk about ways to save money every day, in college, or just in everyday life, like the above gasoline example.
Another thing that some families may find themselves discussing are the pros and cons of living at home when in college. A recent Sallie Mae survey found that 37 percent of college students live at home with parents or other family members in order to save money. I suspect that many of those students are enrolled in 2+2 programs at community colleges, but that is a higher number than I would have guessed. You can do the research if you are considering this, but here are some of the pros, in addition to saving money, that I found — having more quiet time to study, being able to get a better part-time job further from campus, where there may not be as many applicants, and avoiding the drama often experienced with roommates and dorm friends. The cons are primarily about socialization, enjoying campus life, and becoming more independent (managing money and even doing your own laundry). Whether this option is right for any particular student requires weighing these and other factors, but there is no doubt that it can save money.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.