On the news the other night, we saw a story about how the stimulus package is providing jobs for some teenagers. The teenagers get paid $10 to work in different office capacities. In order to qualify, the teenagers must come from families that live below the poverty line. I’m not going to argue the merits of this program. They interviewed a few of the kids in the program and one kid said that he’d use some of the money to help out his mother, but then said that he was going to spend some money on himself to get a new cell phone. First off, is a cell phone necessary for everyone? I don’t know and don’t have to deal with that, yet. (My 2 year old son plays with our cell phones, but he doesn’t have his own plan and doesn’t actually make calls.) Second, the kid pulls out his brand new iPhone. Let’s do a little math. With Apple’s new pricing, the lowest priced iPhone is $99. AT&T puts every iPhone on a minimum $30/month data plan in addition to at least the lowest priced voice plan which is $39.99. Let’s also assume that the kid doesn’t do any text messaging. For a 2 year contract, that is $70/month * 24 = $1680 + $99 for the initial cost of the phone. I’ve excluded taxes for this example. So at $10/hour, this kid has to work 180 hours or effectively one month full time to pay for this gadget.
It would seem to me that somewhere kids need to be taught fiscal responsibility and save money for college, a rainy day, or something else. If the parents can’t help, maybe it should be a mandatory class in high school. During the summer when I was in college, I worked full time and pretty much saved every penny I earned in order to pay for my half of college (my parents made a deal with me that they’d pay for half of my college and I had to figure out how to pay for the other half). I worked with my father to come up with a budget, put in a few things I wanted to buy including a road bike, and figure out how to pay for everything by working and taking out loans.
I know that I’m quite lucky that my father made me fiscally responsible at a young age (I started saving for retirement when I was 12). Actually, maybe I’m a bit too responsible as I’m always concerned about money when sometimes I don’t need to; however, I believe that I’ll be able to meet all my financial goals.
Hi Scott:
I came to your blog looking for help on my Razr. I’m guessing that I can’t use my Blackberry charger to charge it.
The story about the teen ager is the norm. Iphones along with $300 sneakers have become necisaties.
I’m a Certified Financial Planner. Where do they learn this from? ; their parents who have no sense either of the value of a $. It’s amazing how financially illiterate the parents are. They too have their necesities. They’re hoping for a government or divine bail out in retirement. They have hours and thousands to spend looking for a vacation, but none of either for creating a will, paying for life insurance, or saving for retriement. What I see is a major pile up waiting to happen.
Scott,
The college financing that I passed on to you came to me from an associate. He told his kids that if they go to a state school he would pay for it. If they wanted to go to a private school he would pay half. He figured that the basic college education was as subject to the capabilities of the individual professors as it was to his kids ability, that it didn’t much matter what school they went to. The real strength was their inner drive and desire to learn.
As you know, I went to Drexel, a co-op school where I worked six months and went to school six months and lived at home for all but one semester. My parents could barely afford the first year’s tuition. The GI bill, an ASCE fellowship and your mothers teaching got me through graduate school.
And now you know the rest of the story.
Dad