The Price of Status
by John L. White
Finding Frugal Friends
From "Best" to "Good Enough"
My daughter's 8th grade teacher invited me to speak to her class about personal finance recently. They are currently in a section of the curriculum that covers money, debt, credit, etc.
The highlight of the session was the cardboard box I brought in which contained a Dooney & Bourke purse. For those of you who might not know, it's a very expensive, designer (I guess?) purse. The outside of it is decorated with little DB's all over so everyone will know exactly what it is. The reason I know is because I live in a house with three women (my wife and two teenage daughters). My older daughter decided that she had to have one of these purses, so she went out and bought one with her own money (against my wise fatherly advice).
Figuring that some of the girls would know what the purse was, I told the class that the boys had to guess what it was. I pulled it out of the box and handed it to one of the boys, who reluctantly took it like I was handing him a live hand grenade that might explode at any minute.
He said. "ah… it's a purse." So I asked him what was special about it. He said, "It's an expensive purse." I asked him how he knew that. He said, "Because all the girls went 'ooohhh' when you pulled it out of the box." After we determined that none of the boys knew exactly what type of purse it was, I opened the floor for the girls to take a stab at it. Almost unanimously, they yelled out, "Dooney & Bourke!"
When they passed it around the room, you should have seen the gleeful look that came over some of their faces as they held and examined the purse. One of them inspected it with an educated eye and declared that it was "For Real," not an imitation.
Then we played "The price is right." I put everyone's name on the board (it's a small class) and each of them got to guess how much the purse cost. The low bid came in at $40 (one of the boys). This elicited knowing laughter from several of the girls. The highest bid came in at $300. After everyone's bid was in, I told them how much the purse cost ($140 dollars), then we went on to discuss how much a "regular" purse of the same quality (albeit, without the designer name) would cost. The consensus from the girls in the class was about $30 to $40. So I asked them what would explain the $100 difference. What was it about that purse that would make someone want to pay $140 for it when they could buy another one of the same material quality for about $40? I few of the kids took a stab at it and then one said, "Status."
We proceeded to discuss status and what it meant. Was it important? Why would someone want something that they thought would indicate status? I also asked them to think about the level of effort it would require for them to buy that purse considering that they had a job making $10 an hour.
In the context of the status discussion, I went up to the white board at the front of the class and made my best effort at drawing the symbol for a Mercedes automobile. Immediately, a couple of the kids said, "Peace Symbol." I said, "Think Cars." In less than a second, one of the boys blurted out, "Mercedes!" We went on to discuss how they were able to recognize those types of status symbols, which led to a lively discussion about advertising.
I think a small, low-watt light bulb of knowledge began to glimmer for some of them. At the end of the session, as I was leaving, a couple of the girls said, "Tell your daughter that I really like her purse."
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save! or No, debt is not a problem but I am trying to get ahead financially!
John L. White is the author of I'm in Debt, Over 40, With No Retirement Savings! HELP! and My Job Sucks and I Can't Take it Anymore! HELP! (The Real-Life Job Survival Guide)". He also works full-time as an IT professional for a large International Company. To order "I'm in Debt" or My Job Sucks visit Amazon.com or call 813-907-2511.
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