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What Should a Personal Finance College Class Look Like?

Written by WellHeeled on March 13, 2012 · 41 Comments

The lack of financial literacy among young people is a perenially hot topic. Who is responsible for teaching young adults the basics of earning, saving, and investing their money?

Some colleges are taking up the challenge. My cousin, who attends one of the Seven Sisters, told me that her school offers a week-long personal finance class during Spring Break. (Huzzah!). So instead of flying home, she is going to stay on campus and attend the class instead. I was so excited to hear this – personal finance is a sorely needed subject, but most colleges don’t cover this at all. I received an excellent education from my school and took several semesters of accounting, macro-economics, and micro-economics. When I graduated college, however, I knew NOTHING about credit card rates, basics of asset allocation for personal investing, where to set up my cash accounts, etc. And let’s be honest, not everyone has to learn about the Argentine peso crisis, but everyone needs to understand how to manage their own money.

Fortunately, I fell into the world of personal finance blogging. So my deer-in-the-headlights period wasn’t as long as it could have been. Still, it would have been helpful to have a personal finance class before graduation, as part of a comprehensive education to launch young adults into the real world. I’ve discussed in the past whether schools have a responsibility to teach money management to students, so I’m glad that my cousin’s school is taking proactive steps to address this issue.

So, what SHOULD be in a week-long personal finance class? Here are my suggestions:

Setting up a budget and understanding real-life expenses. Or, a discussion of where does your gross pay actually goes to before you are left with your net paycheck, and then your discretionary income. Making $60,000 or doesn’t mean you HAVE $60,000 to spend. Sounds like a simple concept, but the first time I got my paycheck, I was shocked at the big discrepancy between my gross salary and my net income. I believe my reaction was along the lines of “Who is this FICA and WHY is he taking my money?”
How to pay for car / transportation. This should include discussion of car loans, down payments, auto insurance, etc.
How to handle student loans and possibly, prepare for graduate school financially. The class should talk about under what conditions can student loans be discharged (almost none), how long it will take you to pay off a student loan if you stay on a 10-year, 20-year, or 30-year payment plan, talk about the different types of student loan payment plans available and discuss the pros & cons of each, and map out what is the income you will need to earn to service your debts.
How to use credit effectively and responsibly. Over the course of a lifetime, those with an established, strong credit history save tens of thousands of dollars thanks to lower interest rates on everything from a mortgage to car financing to private student loans. So no discussion of personal finance can be complete without talking about credit. I am a big believer that credit cards can (and should) be a part of one’s financial tool kit. I’d like to see a discussion on credit card interest rates, impact of minimum payments and effective interest paid, how to manage your credit score, where to get your free credit reports, etc.
Investing for long-term goals and retirement (a thorough discussions of 401Ks / 403bs, Roth IRAs, IRAs, and SEP-IRAs, etc. would be very important here). Also, there should be a conversation on risk, rewards, fees, and impact on performance.
Insurance needs – talk about disability insurance, life insurance, types of insurance and places to do more research.
Teach them why personal finance is sexy. Seriously! What can be better than taking charge of your own financial life?
Where to go if you need more information or help about personal finances. Books, nonprofit classes, etc.

What do you think should be included in a personal finance class for college students? Would you have found such a class helpful when you were going to school?

Live Like a Student

Written by WellHeeled on March 12, 2012 · 38 Comments

Many readers suggested that I can save money by “living like a student” when I am in school and after I graduate from my MBA program. This might be harder for MBA students than other professional students who have gone straight from college to graduate school, and who haven’t had the chance to “inflate” their lifestyle. In fact, Cornell University’s financial website specifically extols MBA students to live frugally while earning their degree.

Pursuit of an MBA is an investment in your future. It will most likely require you to take on some educational debt. There are ways to limit the amount of education debt you accumulate as a student. The easiest way to reduce your overall debt is to reduce your discretionary expenses. It is much easier to live like a student when you are a student than to live like a student when you are earning $90,000 annually.

So what does “live like a student” mean? Is it strictly a diet of ramen and eggs? Or driving an old beater? Or living with 3-4 roommates? Or working a part-time or even full-time job while going to school at the same time? My cousin, who is in medical school right now, lives with a roommate in an apartment very close to the school and leads a frugal lifestyle, but otherwise drives a paid-off car courtesy of his parents and doesn’t work. My other cousin is a junior in a liberal arts college much like mine and while she holds down a few part-time jobs on campus, she doesn’t worry about paying for tuition or books. Her room and board are all covered, and so any money she makes is her spending money.

Another friend of mine who recently graduated from law school lived in a cramped apartment which she described as “on the outskirts of drive-by territory”, close enough to hear the gunshots sometimes, but far away enough that your friends aren’t afraid to come by during the daytime. When my dad was in graduate school, my parents lived on his teaching assistant stipend (meant for ONE person), renting a room in a basement. The only time they enjoyed fish was when they could buy discarded fishheads from the market. At the liberal arts college where I graduated from, you can see BMW M-6s and even a Maserati dotting the parking lot. Obviously, “live like a student” can run quite a spectrum depending on your expectations, resources, and background.

Here’s what I think of as living like a student:

1. Cooking at home most nights. It might be hard to do, but I am going to make a concerted effort to put together meals that are nutrious and cheap. Think canned beans, omelets, and peanut butter & jelly sandwiches. What I will not do, however, is eat ramen every night.

2. Have a wardrobe that fits and flatters for what I need… going to class, networking, interviews, etc. What I will not do is over-buy in quality or quanity, especially not both. For example, I’d need a nice leather purse to carry resumes and folders, but I do not need that purse to be Prada or Chanel (or even Longchamp!).

3. Live with roommate(s). Housing expense is probably the biggest fixed expense most students have, and living with a roommate is a sure way to save the budget. I am going to embrace shared living… every $100 I can save is another $100 in debt that I don’t have to take out and that I don’t have to repay (with interest).

4. Get by without a car. I am going to make a concerted effort to not own a car while I am in school. No car means no insurance fees, no car payments (as my 16-year-old Honda cannot survive a cross-country move, I’d have to lease or purchase another car), no gas money, and no danger of getting tickets. Outside of getting a roommate, this move will probably save me the most money.

What does “live like a student” mean to you?

Fess Up Friday: All The Things I Want To Buy Edition

Written by WellHeeled on March 9, 2012 · 32 Comments

I’ve been coming down with a case of I-want-to-shop-itis.

1. Gap Fur-collar Tweed Peacoat: $28 with extra 30% off sale.

I’ve been looking for a stylish-yet-casual peacoat, and this one comes in the most delectable shade of plum. But I have so much to pay for this month… is it prudent to buy another jacket that I like but do not need?

2. Longchamp Planetes Tote Bag: $175. NEVER on sale.

This bag would be perfect as I lug my laptop and books on campus (thinking ahead to business school days). Yet given that just BEING on campus would likely require me to take out tens of thousands of dollars in student loans, should I trade down a little on my bookbag?

3. RSVP boots via Zappos: $88 on sale.

I just want cognac riding boots. In fact, I have been eyeing brown riding boots since 2009! These look nice, have a low shaft – especially important for petite gals – and is reasonably priced. But the boots are made of synthetic leather, should I hold out for a similar pair in real leather?

Tell me what you think! And what’s on your shopping wish list this Friday?

Our Biggest Money Fight

Written by WellHeeled on March 8, 2012 · 40 Comments

I didn’t write this post for several weeks because I was embarassed of how I behaved. But the fact is, CB and I had our biggest money fight ever. Over… lunch. A $4 lunch. (Or rather, many $4 lunches).

Here’s the scenario

CB buys lunch practically every work day. He usualy spend $4-$5 on these lunches, or around $80-$100 a month. This expense, while not ideal, is certainly not “unaffordable.” I have encouraged him to pack his lunch, but most of time we eat out much more often than we probably should. A few weeks ago, however, I let the frustration boil over and there might have been some choice words between us that goes along the line of “you are wasting all this money and we are going to be broke” and “you only care about money and you want me to starve” (see illustration above).

After a few hours passed and we had both calmed down, we apologized and I tried to figure out when I got so worked over over $100 a month. Sure, bringing lunch to work saves a lot of money, but I probably spend more money than CB on many things – clothes, restaurants, personal care, etc. CB IS a saver, but he just doesn’t prioritize saving on the same things as I may. And that’s something I have to learn to be OK with. He is fine with not going on those weekend getaways that I enjoy so much. He buys two pairs of pants for $100 and he’s done with shopping for 6 months. I give myself a pat on the back when I get through 3 weeks without dropping a dime at Nordstrom Rack or Marshalls. He can wash his face with generic facial cleanser while I shell out for the $20 bottles at Sephora.

What I was REALLY worried about

Then I figured it out – I wasn’t so mad about the going-to-lunch-every-day situation. Instead, I was frustrated because the reality of no longer being the sole owner of spending decisions affect my financial life. Getting married means becoming a team, and even though our finances are “technically” separate for now, what I do affects him and what he does affects me. I’m not quite used to being in that position, and so instead of sharing my worries and concerns rationally like a mature adult, I glommed on to the $100 / month lunch spending as All That Is Wrong With My Future Husband’s Finances. Oops, indeed.

Since that fight, we have both come a long way. Now CB keeps a loaf of bread, lunch meat, and cheese at work so he can make a sandwich most days. I have also taken to do the same, but I also don’t get worked up if he decides to grab lunch out two days in a row.

What was your biggest money fight with your partner?

This post is part of Women’s Money Week 2012. For more posts about Relationships and Money see, Relationships and Money Roundup.

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By the Numbers: One Example of a Chinese Middle Class Wedding

Written by WellHeeled on March 6, 2012 · 19 Comments

One of my cousins got married a few weekends ago. Unfortunately, I didn’t have enough vacation days to attend her wedding in Southern China, but I was able to glean some details from my mom to share with you all. So behold, this is one example of a wedding in China.

Photography

Wedding photography in China is a fascinating topic. Instead of hiring a photographer to capture the events of the wedding day (indeed, the much vaunted “photojournalistic style” has swept the wedding world here in the U.S.), in China, bride and grooms take their wedding pictures several weeks or even months ahead of time. The wedding session takes an entire day with several change of locale, numerous changes of outfits, makeup artists on site, wind-machines, and even a computer guy to airbrush on-the-spot. My cousin and her groom lounged as 18th century prince and princess in a Rococo foyer, posed with a bicycle against the backdrop of a rolling meadow, and posed in outfits a la fashionable folks in 1920s Shanghai Bund. And that’s just the few pictures she sent me!

Photography typically costs $500-$3,000, depending on how many poses you want, how many prints you order, and how elaborate your sets are. There is also a professional photographer at the venue on the day of the wedding, but that expense is a small one compared to the actual “wedding photography package.”

Reception / Dining

Dancing is typically not a part of a Chinese wedding reception, instead, guests are treated to the bride & groom (and sometimes the bridal party) participating in games as entertainment. My cousin entered the room in a carriage decorated with flowers and branches, and then there were pouring of the champagne and first sips as husband and wife. There were 29 tables with 10-15 people per table. According to tradition, the groom’s family invites one more table than the bride’s family. Each table was around RMB 3,500 or $600, so the entire reception comes out to around $17,400.

In the U.S., tradition says that the bride’s family should pay for the majority of wedding expenses. In China, the situation is reversed. The groom’s family is responsible for the costs. Indeed, the groom’s family is also traditionally responsible for buying a house for the newlyweds. A young man’s eligibility may well depend on the ability of his parents to purchase and furnish a home, or at least to put down the bulk of the purchase price (financing / loans in China is becoming more common, but many familys still pay cash for their homes).

Wedding Gown(s)

The bride had three changes of outfits during the wedding/reception. One: a classic, strapless white ballgown, two: a red Chinese-style outfit with an embroidered top and skirt, and three: a red qipao or cheongsam, a very fasionable, very unforgiving gown. It’s quite inexpensive to get clothes made in China, especially if you avoid designer names, so I’d venture to guess that these three outfits cost her around $500 total.

The groom had a few changes of outfits as well (although my mom and I naturally did not delve into the particulars of his dress as much as we did my cousin). He wore a white suit when my cousin wore her ballgown, and when she changed into her traditional Chinese gowns I assume he wore a coordinated dress as well. Again, clothing is cheap in China, so his outfits were probably less than $500.

Wedding Gifts

There is no tradition of gift registry in China. Instead, guests give cold card cash in a red envelope (like the kind they give at Chinese New Year). Typically, the bride and groom would “make back” in gift money what they (or their parents) spend on hosting the wedding. Another cousin got married last year, and I think he got something like $10,000 or $15,000 in gifts. This might sound like fun and games… until they are invited to the guests’ wedding! Then the act of reciprocation must occur. In fact, some people have gone so far to refer to wedding invitations as “red bombs” because of the money-giving obligation that acceptance demands.

What Losing Weight Taught Me About Saving Money

Written by WellHeeled on March 5, 2012 · 21 Comments

There is a natural parallel between losing weight and saving money.

For the past several months, CB has been on a weight loss journey. In the middle of January, I joined him. True, we want to look good for the wedding (because there’s nothing like having your appearance captured by pictures that will last forever to give you a kick in the pants), but more importantly we want to establish good eating habits and exercise habits to carry us far beyond the Big Day. CB lost 50 pounds in eight months, going from a 38-inch waist to a 32-inch waist. I had a modest-sounding-but-still-signficant-to-me 6 pound weight loss, trimming an inch around my waist.

Watching CB lose weight and then working at it myself, I realized that there are so many lessons that losing weight have taught me about saving money.

1. It’s about understanding the numbers AND taking action.

Losing weight and saving money are math problems. To lose weight, you need to create a calorie deficit – eat fewer calories than what your body needs to maintain its current weight. To save money, you need to spend fewer dollars than you earn. Both cases can be boiled down to a case of simple arithmatic: dollars in vs. dollars out, calories in vs. calories out.

But THEN you throw in human behavior, and it just all goes out the window! Plenty of people understand that eating unhealthily and sitting all day will encourage weight gain, just as plenty of people understand that if you spend more than you make, you will run into debt. But as anyone as ever tried to lose weight or save money (*raises hand*) would tell you, it’s one thing to know the math. It’s another thing to make the not-so-fun decisions (choosing an apple over a chocolate muffin, trading a loft apartment for room in someone else’s house) that will allow you to achieve the desired results.

2. You can’t out-train a bad diet, and you can’t out-earn bad spending.

Watch this video on why you CANNOT out-train a bad diet <—- one guys runs at a pace of 11 miles per hour and burns 40 calories in a few minutes. In the same amount of time, his buddy consumes almost 1,000 calories in pizza and soda. In the same way, I’d say that you can’t out-earn bad spending. Of course, if you are rich like Bill Gates is, it is quite difficult to imagine how you can ever spend all that money if you just kept a portion of your wealth in income-producing investments. On the other hand, we’ve all heard stories of some very wealthy people – professional athletes, Hollywood stars, famous photographers, etc. – who have to live in reduced circumstances because they spent beyond their means.

Making a high income is important, it’s one side of the equation. But it’d be pretty darn difficult to earn enough money to support a life of indiscriminate spending. Focusing on earning without examining your expenses is akin to trying to lose weight while filling your diet with sugary drinks and fried foods. When I saw that video, I felt a lightbulb switch on…. which brings me to the 3rd lesson I’ve learned.

3. You can’t manage what you don’t measure.

If you want to lose weight, you need to measure what you are eating. If you want to save money, you need to measure how much you are spending. Trying to lose weight and save money means that you are by definition changing the status quo – so you HAVE to do something differently in order to see results. Your current diet isn’t working. Your current spending isn’t working. Otherwise, you would have already gotten the results that you wanted.

CB and I both track our calories. He does it on a piece of paper, I do it with the app MyFitnessPal. Once I started seeing results with MyFitnessPal, I realized that I needed to do the same thing with my finances. I’ve tried out several expense tracking applications recommended by readers, and for now I’ve been entering my data into iXpenseIt – but I’m open to other suggestions! Measuring my progress allows me to 1. stop deluding myself on how much I am really eating or spending, and 2. show me where I am going overboard. Incidentally, it’s the same with both expenses & calories: eating out… coincidence? I think not!

4. Know what’s worth it, and what isn’t.

We all have limited resources – calorie-wise or dollar-wise – so it’s important to figure out what purchases or meals are “worth it.” After almost two months of paying attention to my diet, I have developed a repetoire of meals that I know are worth the giant caloric intake: fried chicken over oily sticky rice from my favorite Thai takeout (800-1,000 calories), flourless chocolate tort from the Capital Grille (734 calories), curry ramen at the local noodle house (650-700 calories), scones that CB’s sister makes (300 calories per scone, but I always eat 2-3 in a sitting!), etc. I also know what ISN’T worth the extra calories, so I don’t eat those foods.

When it comes to spending, I am working on the same mentality. Tango lessons for $15 a pop is worth it to me, buying 2 e-books for that same price is not. I have enough lotions to keep me moisturized for a year, so even though the new bottle is on sale, I am not going to buy it. All that money I’ve saved can go towards something that I really want, that is really worth my dollars – things like travel, retirement accounts, facials, etc. By spend money on what is important to you, and ruthlessly cutting expenses on all the rest, you’ll be able to gain more enjoyment from your dollars AND prepare for a financially sound future.

5. Plan ahead and build in a cushion (and when you slip up, get back on track).

We won’t eat perfectly 100% of the time and we won’t spend perfectly 100% of the time. By planning ahead and building a cushion, however, I can mitigate the impact of a bad diet decision or unexpected expense. So when I know I am going to spend Friday night with a giant bowl of the delicious chicken mentioned above, I try to shave a hundred calories off every day in the beginning of the week. When I know I have to pay for tuition deposits in a few months, I try harder to squirrel some more nickels so that when the day comes, the bill wouldn’t be such a shocker. (But I think it still will be).

Despite our best plans, though, we make mistakes and veer off track… because life happens. The important thing is to not let a bad day turn into a bad week, and a bad week turn into a bad month, and so on. When I was in Las Vegas, all my discipline went out the window and I enjoyed far more culinary delights than I should have. But when I came back from that trip, I told myself, “OK, now you have to get back on track!” And I did. When I was visiting all these business schools during interview season, I didn’t always choose the cheapest flights or car rentals. I chose convenience, and that was OK. But now that I have more time to look for flights for my honeymoon and other trips, I take longer to search for deals and make my purchases.

6. It’s not a quick fix, it’s a way of life.

One night, CB came to me with a mournful look on his face and said, “you know, I’ll have to eat like this for the rest of my life.” I looked at him and said, “me too. But that’s OK. We have to make healthy eating a lifestyle. It’s GOOD for us!” (the truth is at that moment I was really, really craving a giant piece of chocolate fudge). When I think back to how and what we used to eat, I realized that that’s not a sustainable way of eating. We had no concept of moderation, we underestimated the calories in our foods and overestimated the calories burned through exercise, we ate whatever we wanted, whenever we wanted, and usually what we wanted were NOT salads or grilled veggies. This new phase in our life isn’t a short-term fix. It has to be for life.

The truth is we can’t eat whatever we want – unless you are one of those rare souls who truly prefer tofu over fried chicken – and we can’t buy whatever we want. Nothing you do will change those facts. If you try to deny it, you are only going to dig a deeper hole for yourself, in terms of bad debt or bad health, or both.

7. Don’t just rely on sheer willpower, figure out a system instead.

Willpower is a limited resource, in fact, studies have shown that when we expand willpower on certain things, other goals fall by the wayside. That means if you are trying hard to save money, you may be lackadaisical with eating healthy. That’s why it’s helpful to figure out a system that will help you make the right decisions, WITHOUT using your limited reservoir of self-discipline. When it comes to finances, it’s paying yourself first. When it comes to losing weight, it might be putting gym clothes in your car (check), stocking your fridge with low-calorie treats for when you get a sugar craving (and by you, I mean me), and making the decision NOT to go out to eat instead of relying on your self-discipline to order the lite dishes.

8. When you see results, all the hard work will be worth it.

This one’s self-explanatory. When we look at our retirement accounts or reminisce about the trips we have taken, I don’t think about the clothes I didn’t buy or the restaurants I didn’t go to, and I don’t miss the luxury apartment that I visited but never leased. I bet CB doesn’t mind that he got an old Honda for $4,000 instead of a new Acura for $24,000. And when we see how we look, and feel, now, we don’t miss the fact that we can only eat my beloved Thai fried chicken once a month instead of twice a week. The results are worth it.

Have you found similiarities between losing weight and saving money? Which one is harder? (and if there’s anything you learned from this post… it’s that I have an addiction to fried chicken).

This post has been featured as an Editor’s Pick in Carnival of Personal Finance

Fess Up Friday: The Lack of Attention to Detail Edition

Written by WellHeeled on March 2, 2012 · 13 Comments

School #3 sent me an email. I open it up. I see the word “Congratulations!” and then my eyes darted over to “scholarships” and “$20,000″ and immediately I started thinking “I got $20,000 per year in scholarships!” Then I did a little jig inside my office (I contemplated doing a cartwheel but I realized there’s no room). I tweeted my good news. I told my coworker. I tried frantically to call CB at my aunt to celebrate. So, imagine my chagrin (and, um, embarassment), when I realized that in my excitement, I had completely misread the award letter. Instead of $20,000 per year, I am receiving the $20,000 over the two years, or $10,000 per year. I am very grateful for this scholarship and I love this school, so I am psyched about any aid. Oh well. The thought of getting $20K a year was nice while it lasted!

CB and I just signed up for a prix fixe menu at a “pop-up” restaurant. This place has gotten excellent reviews, so we are really excited to dig into our 4-course meal with free corkage. The meal for the two of us will be $110 including tip. This is a pretty big expense for the month of March, and the truly frugal thing to do would be to NOT attend this dinner. But I rationalize. A tasting menu prepared by someone of Chef Laurent Quenioux’s caliber will normally cost far more than $45/person. So in fact, I am saving money. (Not really). But I am not feeling frugal.

My dream house in San Diego has sold. Despite the fact that I was in no position to make an offer on that house (or any house, for the next 5+ years), I was sad that my dream house now belongs to someone else. But then I brightened up… because when THEY sell, I will be there!

I am playing with this very nifty loan calculator to project the amount of loan repayments I would have depending on the loan amount, interest rates, and term of the loan. It’s a sobering look at student debt. Maybe I shouldn’t do that prix fixe dinner after all…

Now it’s your turn to fess up! Any money-related (or not) confessions for Friday?

Looking Ahead… At Student Loans

Written by WellHeeled on February 29, 2012 · 35 Comments

Congratulations! Now please hand over $100,000 and your first-born.

I have heard from my second and third business school. I got in! Now that business school is really going to happen, I am also figuring out what it means to be a full-time student again. The MBA programs I applied to cost around $150,000-$160,000 for two years: ~$50,000/year for tuition, books, and supplies, and an allowance of ~$25,000-$30,000/year for living expenses. No one ever said graduate school was cheap.

How do I plan to pay for this educational elephant? Fortunately, I’ve been able to save up and I am able to count on some family help. $50,000 comes from my personal savings from post-college work, $40,000 comes from inheritance from my grandmother, and my parents will probably help me out with another $10,000. So that’s $100,000 of tuition. The other $50,000 in living expenses will likely come from a combination of loans and freelance earnings during business school.

School #1 did not offer me any scholarship, so if I go there it will be for the full sticker price. In that case, I will probably have to take out $40,000-$50,000 in loans. They might be loans from the Bank of Mom & Dad with a Dear Daughter Discount, but it’s debt nonetheless. $40,000-$50,000 of repayment will require pre-tax earnings of $60,000-$70,000 to service, which is no small sum. This is a great institution and I feel very lucky to be accepted, but it will be a struggle to pass up the money offered by.. School #2.

School #2 is offering me a not-insignificant-amount of aid. Thanks to a scholarship, the tuition drops down to $27,000/year, and the total cost of attending business school falls to $105,000. If I choose this school, I have a very good chance of graduating debt free if I live frugally and make some side income during school. I don’t even have to fill out a FAFSA! What a coup that would be… if I can graduate from a great MBA program and still have ALL of my income be mine afterwards. Well, mine and Uncle Sam’s. This school’s reputation may be a little bit more regional than the other schools I have applied to, but I believe that all busines schools, with the exception of Harvard and Stanford, are regional in some ways. Bottom line, this school is a solid choice, with a strong alumni network, very down-to-earth people, and a robust recruiting pipeline for the industries I am considering.

School #3 is an Ivy (though the mere fact that it is an Ivy shouldn’t make my parents any more glad about the acceptance, it will. And I am happy because they are happy), and will tell me whether I get any scholarships in a week or two. School #4 will inform me of their acceptance decision in about a month.

CB has also applied to graduate school. He will hear back within the next month. If he gets in, he will have to take out some loans (which will then turn into our loans. Ah the joys of marriage). If he doesn’t get in, he will keep working and support me financially for a year so I can take out fewer loans (ah the joys of marriage) and reapply next year. I think he has a pretty good shot at acceptance, so I am planning as if we will BOTH be in graduate school, BOTH not making much money, BOTH taking out student loans. In that context, I am forced to think about my student loan situation much more carefully than I might otherwise.

How my attitude toward student debt evolved

Even a few years ago, I had resigned myself to taking on $80,000+ in student loans. It’s what almost everyone does and most graduates of top schools can find a job that will service that debt. According to the MBA website Poets & Quants, the average MBA debt load is north of well north of $70,000 (incidentally, all of my schools are on that list… not sure if that’s a good or bad thing).

But the more I thought about it and the more I calculated, the more I realized that I don’t want to graduate with a mountain of debt. Student loan debt doesn’t have to be a fact of life for me. Even if I do take on loans, I want to err on the side of conservatism. I’d like to be able to pay off my graduate loans in 3 years after school. My limit is $50,000 in loans for an MBA. Assuming a family loan interest of 5%, it’d take me $1,500 a month to be able to pay off the loan in 3 years. A big chunk of money, to be sure, but not impossible. If I can keep the loans down to, say, $25,000, I’d be able to pay it off in a little more than a year.

I truly love all of the schools I applied to, having made a decision very early on that I would not submit my application to a school unless I know I will be happy and excited to attend. So I have three great choices right now (hopefully, I will have four great choices once I hear back from School #4). Money is definitely a factor, but how big of a factor? I don’t know.

Bathroom Attendants!? Don’t Go to the Bathroom Without A Few Dollars in Your Pocket

Written by WellHeeled on February 28, 2012 · 25 Comments

I know I have to tip when I ride in a taxi, when I eat in a restaurant, and when I leave a hotel room. But… in the restroom? Apparently, tips and bathrooms are not mutually exclusive.

During one of our nights in Las Vegas, we had dinner at Tao, the trendy Asian-fusion restaurant where no matter how hip you are, you are never hip enough. When I snuck to the restroom to wash my hands, I was faced with a sink lined with perfume, breath mints, lotions, hairspray, etc. And off to the side stood the bathroom attendant, a lady pumping handwash onto your palms and offering up paper towels the moment you turn off the faucet.

In the middle of the counter, there are two glass jars with dollar bills. So imagine my discomfort when I realized that I have NO cash on me, anywhere. I was so embarassed that the second time I went to the restroom I just washed my hands and wiped them on my jeans instead of taking a paper towel. This is the first time I have seen a bathroom attendant (I had thought that they were the stuff of urban legends, conjured up to frighten cashless restaurant patrons), and I have no idea what the correct etiquette would be.

On the one hand, I don’t think I should have to fork over money just because I go to the restroom. On the other hand, it is pretty awkward when there is a human being handing you towels and a tip jar standing RIGHT there. I wish bathroom attendants weren’t necessary - actually, I wish that restaurants would pay them a minimum wage so that I don’t have to feel bad about not having a dollar to tip. The restaurant can roll up the higher cost into the price of the meal – I would be much more comfortable with that arrangement.

Have you frequented places with bathroom attendants? When & how much do you tip?

Carnival of Personal Finance #350: The Little Prince’s Journey to Financial Enlightenment

Written by WellHeeled on February 27, 2012 · 36 Comments

Once upon a time, in a far away kingdom, lived a Little Prince and his Wise Wizard. The King, who is very old, wanted to make sure his Little Prince is ready to take over the mantle of ruling the kingdom before he puts the Little Prince into the will [Sustainable Personal Finance] He is rightfully concerned about the generational differences when it comes to debt [Yes I Am Cheap], and so he asked the Wise Wizard to help the Little Prince get to the Land of Financial Enlightenment. “I don’t want him to grow up all silly nilly about money! What if he marries a princess who buys purses all the time [Diva in Debt] and go broke?! I need him to be a good leader and understand investments [Grow Money]“ said the King. ”HMPH. That’s playing into gender stereotypes [My Broken Coin],” the Wise Wizard said, “but I will help the Little Prince reach his destination and understand financial matters in relationships [Busy Executive Money Blog].”

And so the Wise Wizard and the Little Prince set out on their journey. Along the way, the Wise Wizard tried to impart words of, well, wisdom to the Little Prince.

“To reach your Findependence Day [Boomer & Echo], you must overcome obstacles and learn to figure out for yourself what truly matters in life,” the Wise Wizard said. ”But I already know the 10 Commandments to Growing Wealth [Wealth and Wise],” said the Little Prince, “This will be an easy journey.”

“It is not enough to simply know, you must also act,” The Wise Wizard explained, “let me tell you about all the obstacles you will encounter.”

“Having pride in yourself and work is a good thing, but never be too proud to shop at discount stores [See Debt Run]. Along the way to Land of Financial Enlightenment, you might see alluring images of fast cars and pretty women [Saving Advice], but driving an uncool car is actually awesome [Graduating with Surplus]. If you stick to the 20% rule [Your Life, Their Life], you can help you achieve your goals more quickly.”

“But I KNOW all these obstacles already,” the Little Prince said, for he was a very smart Little Prince. “I’ve read about them in books and on blogs. I’m a great student [Humble Savers].” The Wise Wizard shook his head. You can’t just understand the numbers (although that is very important) – you have to modify your behavior [Consumerism Commentary] to make lasting change. Sometimes, you have to experience things – losing money in the stock market [Million Ways to Save], fall victim to price anchoring? [Smart on Money], co-signing a loan [Christian Debt Coach], and marrying for money [Nicole & Maggie] before you learn what works and what doesn’t.”

“Getting to Financial Enlightenment doesn’t sound much fun,” said the Little Prince, “I like to look good and enjoy my life.” ”You can!,” insists the Wise Wizard, “you can make fashion affordable [Everything Finance], you will live longer! [Squirrelers], and if you make good choices, you will be able to become a stay at home dad [Tie the Money Knot] if you wish.” The Little Prince wrinkled his nose. “But I killed my last three goldfishes,” he said. “Er, well, don’t quit your day job yet [My Money Design]!” sighed the Wise Wizard.

As the two walked and walked and walked along the road to Financial Enlightenment, they talked and talked and talked.

The Little Prince asked, “the Land of Financial Enlightenment is when I finally get RICH, right?” The Wise Wizard chuckled. “Money isn’t the only measure of success [Barbara Friedberg Personal Finance], in fact, money is just a tool. Once you build your foundations [Free Money Finance], you will be able to use money to do what you really want to do in life – whether that’s to spend more time with your future Princess, create more buildings for the royal grounds, or contribute to charity [Mrs. Nespy's World]. There are tools to help you do this: automating bill payments [Budgeting in the Fun Stuff], taking advantage of payroll tax cuts [Novel Investor], selecting a good IRA company [Qwoter], and taking advantage of no balance transfer fee credit cards [Wallet Blog].”

Finally, after many days of study, the Little Prince was ready for his important interview [Adjunctorium] with the King. The King quizzed him on all he has learned, from tax reporting forms[Nerd's Eye View], to renters and laundry fees [Start Talking Cents], to tips for easier budgeting[Money Talks Coaching], to using Google Docs spreadsheet for investing [My Journey to Millions], to making extra money [Bible Money Matters], to chargeback policy report [CardHub]. The King asked about the general economy [Narrow Bridge Finance], the local economy[Debt Black Hole], evaluating intangibles [Pinch That Penny], and when DIY works and when DIY doesn’t [DollarVersity].

The Little Prince was able to answer the King’s questions flawlessly. He gave the King the low down on RESP plans [Young & Thrifty], discussed the rules of career reinvention [Afford Anything], explained the virtues of saving paper [Funny About Money], talked about the benefits of getting a 60 month auto loan [Familyancial Wealth, listed ways to save at the gas pump[Personal Finance Success], ran over reasons why a home inspector [Happy Homeowner] is necessary, and even explained how to find jobs using social media [One Cent At A Time]. The King knew nothing about social media or SEO keywords [Mike & Molly's House], so he was very impressed indeed!

“You seemed to have learned a lot,” said the King, “I want to reward your efforts [Money Cactus].” Then the King, confident that the Little Prince can handle his finances, gifted him real estate [Investor Junkie], bonds [Dividend Growth Stocks], bond funds [Control Your Cash], and even shares of Ford stock [Dividend Monk]!

“But wait!” The Little Prince interrupted, “I haven’t told you what I REALLY learned yet.” “You haven’t?” The King was confused. “But you talked to me about knowing when to adjust your budget [Evolving Personal Finance], learning a foreign language [Darwin's Money], evaluating Betterment [Dough Roller]. You showed me how you improve your credit score [Financial Highway], save [PT Money], buy travel insurance [One Frugal Girl], and use a rewards credit card [Rewards Cards USA]. You even have the discipline to hide money — from yourself [Frugal Cool]. It sounds to me that you have achieved Financial Enlightenment.”

“All that is important,” the Little Prince admitted, “I did learn about tax forms [Free From Broke], Social Security [My Dollar Plan], Bank of America Add It Up Rewards [Financial Product Reviews], and dividend investing [Dividend Growth Investor], I learned about what happens in Chapter 11 [Prairie Eco Thrifter], when to cancel my credit card [Help Me Travel Cheap], and how to save for the holidays [Net Worth Journey]. I even learned about unconventional investment moves [Invest It Wisely]. But I don’t want to get tunnel vision when it comes to my finances [Money Beagle]. Because what the Wise Wizard taught me was that financial enlightenment is about making decisions so you can live the best life you can, and have your spending and finances reflect your priorities.”

The King smiled! The Little Prince has passed his test. He knows that the Little Prince has a bright financial future [Watson Inc], and for that he is happy. The Wise Wizard is also happy. In fact, he thought, ”Maybe I should start my own financial firm [Good Financial Cents]!”

Financially Ready To Have Kids?

Written by WellHeeled on February 23, 2012 · 38 Comments

CNN Money asked its readers to give their answers to a question one reader submitted:

When is a person financially ready to have kids?

My husband and I make decent money, but it all seems to go to student loans and the mortgage. How does anyone decide the time is “right” to have children? What steps should we take before starting our family to make sure we are financially secure enough to provide a safe and happy home for our children?

This is one of those questions that have no right answer, because it’s so different for everyone. But I believe it’s a useful question to ask, even if you don’t know the right answer. I know that a baby is a great deal of responsibility and costs a great deal of money. According to a USDA report, it now costs an average middle-income American family $222,360 to raise a child from birth to 18. That’s almost a quarter of million dollars! Furthermore, that number DOESN’T include college costs, which could range from a few thousand dollars a year at community colleges to $50,000 a year for a private university education.

I’ve read a lot of personal finance posts that say something along these lines: kids don’t have to cost all that much money! All they need is love and attention! They just want time with you! I don’t disagree with that, because it’s true, kids don’t really care if they wear Target or Tommy Hilfinger (just wait until they become teenagers!). But having kids also impose some very real costs - impact on your career (and thus income) trajectory, impact on your personal freedom, impact on your relationships. Achieving a certain level of financial security can mitigate some of these impacts – having enough money to pay for a night nurse so that the new mom can get enough sleep after the delivery, having enough money to hire babysitters so the mom & dad can go on a romantic date, having enough money so you don’t worry (too) much about health insurance or paying for school supplies.

So money isn’t everything when it comes to children, but not having money also causes a lot of problems for new parents and puts further strain on a marriage. CB is probably a little less enthusiastic about kids than I am… and I am about a 5 on a scale of 1 – 10, 1 being Childfree Forever! and 10 being Must Have Baby NOW! One of his reasons for CB’s reluctance that he is very worried about the impact a baby would have on our finances and our freedom. Which are legitimate concerns that I share. I take this to mean.. we are definitely not ready now.

We might be ready one day, however. I am finding babies cuter and cuter, much more so than I have in my early 20s. I see a pretty biracial toddler with straight black bangs and a bowl haircut, and I start wondering… well, maybe it wouldn’t be so bad to have one of those. Perhaps the biological imperative cannot be denied. If so, here is what I’d like to have accomplished financially before CB and I bring a baby into this world.

Save up an adequate retirement fund. I am not sure what “adequate” means just yet… but $250,000 sounds like a good number.
Achieve an income and a level in our careers that would allow us to continue to save for retirement, give the kid a leg-up, provide childcare, and buy a modicum of balance.
Live in the same city. This may seem like a no-brainer, but given that we will likely move to different states a month after the wedding, I’d like to ensure that we will not be in a long-distance relationship WITH a kid.
Pay off our student loans because baring a mortgage, I really would like to be debt-free by the time we have a kid.

On the one hand, I can chalk these goals up to my Type A personality and my desire to really, truly, prepare financially before we are responsible for another human being. On the other hand, setting these very high financial goals may just be a way for us to delay becoming parents without shutting the door on parenthood. I don’t know what is the “right” level of financial security before you have a child. Obviously, people have become parents under less-than-ideal circumstances and still have raised great children. And obviously there are very wealthy parents who are horrible parents. But most of the time, parents are just trying to do the best they can with the resources they’ve got. The truth is, I am not confident in my ability to be a good mother, but I’d like to have as many ducks in a row as I can to mitigate that uncertainty. Having more resources have to be better than having fewer, right?

When do you think you would be financially ready to have kids?

Dave Ramsey & His Style of Motivation

Written by WellHeeled on February 21, 2012 · 20 Comments

Dave Ramsey is one of those guys that inspires lots of love or lots of criticism in the personal finance world. Some people swear by his methods in the Total Money Makeover, some disagree with his step-by-step plan, and some are turned off by the religious overtones in his writing or the draconian line he draws on credit card use.

I don’t know much about Dave Ramsey and I never felt compelled to do so. But lately, looking at our situation – and our increasing spending, I wondered if the motivation to really accelerate our savings is all that different from the motivation to pay off debt. If Dave Ramsey can inspire people to pay off $40,000 of debt in a year on a $60,000 salary (HOW is that possible?), might we not be inspired to do the same in terms of our savings? And this savings will go directly into our graduate school payments, which means that we will not have to take on as much debt for school. Which sounds fabulous.

Dave Ramsey’s 7 Baby Steps are as such:

$1,000 in emergency fund – Check!
pay off all debt with debt snowball – Nope, we both have low-interest and no-interest debt, but I’ve decided that those are not high priority enough for us to defer our other goals.
3-6 months of expenses in savings – Check!
invest 15% of income for retirement – Check!
college funding – This is the one that we REALLY want to work on. But instead of college for our kids, it will be graduate school for ourselves. Looking at the steps it’s clear that that’s where we need to be.
pay off home early
build wealth and give

How do you feel about Dave Ramsey? Any debt-free folks continue to follow his 7 step plan?

$25 Amazon Gift Card Giveaway

Written by WellHeeled on February 19, 2012 · 3 Comments

Happy Sunday! I will be in Vegas for the next few days (where the bulk of my budget shall be spent on hotels where I can get a good night’s sleep. Because I am secretly 80). I have put together a little Amazon gift card giveaway. Please click on the permalink of the post to enter. The deadline is 12:01 am EST on March 1, 2012.

Save Money or Quit Job, End Lease, and Travel to China for 3 Weeks?

Written by WellHeeled on February 17, 2012 · 47 Comments

Once I found out about business school, my plan was to work until the end of June, give myself a few weeks to relax and move, and then head back to school in July/August. Last night, however, I started thinking that maybe… for this time in my life, I can afford to be a little irresponsible.

I am considering quitting my job at the beginning of May, ending the lease on our apartment, and packing up to travel China for 3 weeks. Should I do it?

YES, because:

CB and I will not have 3 weeks to just go travel for the next few years. After graduate school we will be busy working, paying off student loans, being “adults.”
It would be nice to see and introduce CB to part of my extended family. Plus, China is part of my heritage and I’d REALLY want to go back beyond simply wanting a vacation.
We are willing to stay in hostels and take night trains to stay on budget, and for part of the trip we will be guests of my uncle and aunt, who will undoubtedly insist on paying for most of our expenses. The whole trip, including international airfare from LAX to Beijing, will probably cost $4,500 for 3 weeks. If we only go for 2 weeks, we can probably swing it for $4,000.
Ahhh! China!! THREE WEEKS! (can you sense the excitement?)

NO, because:

That $4,500 we’ll be spending could go to graduate school tuition… which will be sorely appreciated by our Future Indebted Selves.
Quitting almost two months early means that we will be cutting our 401K contributions by $3,500+. Not a small figure. We will also have to front our own insurance (COBRA or buy a temporary insurance) once we stop receiving employer-sponsored coverage.
It will be much more challenging to max out our Roth IRAs (we will still do it, just might have to take some money out of savings to do so).
We won’t be, you know, making money.

I talked to several of my friends, and they all said that I should go travel. In my heart of hearts, that’s what I want to do. From past experience, trips deferred just don’t happen. My girlfriends and I had planned on a Mexican cruise in 2009. But we kept pushing it further and further down the schedule, until no one even talk about it anymore. I do not want CB and my China trip to suffer the same fate. But the money. Ouch.

If you were in my situation, what would you do? Or would you strike for a compromise – taking a 2-week vacation in May and quitting in June as planned?

“I Deserve It”

Written by WellHeeled on February 14, 2012 · 19 Comments

How many times have you made a purchase because you thought, “I deserve it“? If you have, speak up… so I know I’m not the only one!

Lately, I have noticed that I slip into this pattern far more often that is productive. It’s good to “treat” myself if I can afford it, and it’s fine to reward myself for a job well done, but “I deserve it” shouldn’t be an excuse to spend, spend, and spend. Unfortuantely, somehow, I have gotten into the habit of using “I deserve it” as a crutch, and excuse, to spend above what is prudent. I had a hard week at work, so “I deserve it.” I worked extra hours to earn some freelance income, so “I deserve it.” I saw that great deal to the spa that I’ve been waiting for, so “I deserve it.”

All those “I deserves” are standing in the way of what we truly deserve.

Instead of a beach vacation that we’d have to finance with a credit card, we deserve to greet our monthly bills with zen, because we know that we can pay off what we have purchased.

Instead of a leather bag (or, um, shoes) whose price tag sails above our budget, we deserve to have the peace of mind that comes with a 3-month, 6-month, or even 12-month emergency fund.

Instead of the newest flatscreen TVs or flashiest DSLR camera, we deserve to look at our online statements and see we are saving 10%, 20%, maybe even 30% for retirement.

Instead of a sleek new car that we can only afford with a 6-year purchase plan, we deserve to start upon the road to financial security by making smart choices today… even if we have to drive down that road in a very old car.

Today is Valentine’s Day, a time to celebrate love (it’s NOT a made-up holiday, says this Valentine’s Day defender). And what better way to show love to ourselves -especially our future selves- than to work toward what we truly deserve? I’m using this holiday as a wake-up call… and a chance to reframe my concept of what I “deserve.”

Tell me about your “I deserve it” traps.

The Money Sandwich

Written by WellHeeled on February 13, 2012 · 9 Comments

Last night, CB and I were driving. R&B and rap songs were playing on the radio, and suddenly CB said, “you know what, we can build a sandwich with all the slang terms we have for money.”

Case in point:

First, you have to start with slices of bread (made from dough)… refers to basic sustenance, livelihood, to earn one’s daily bread, breadwinner

Then we add some cheddar… refers to selling foodstamps (“government cheese”) for money or the similarity in size between stacks of cheddar cheese and bills

Next, we slide in a few leaves of lettuce – refers to the green color of bills

And finally, what better meat to put into a sandwich than… BACON? bacon – as in bring home

Viola! The money sandwich.

What other terms for money can you think of? Can you build anything else with money slang?

8-Day China Tour for $49 – Great Deal, But There are Caveats

Written by WellHeeled on February 9, 2012 · 17 Comments

If you found out about a deal that would only cost $49/person for an 8-day tour of China, you would jump on it, right? After all, who WOULDN’T want to visit the Middle Country for less than the cost of a tank of gas? I talked to my parents, researched online, and checked out a few Chinese travel agencies to get more details on this seemingly too-good-to-be-true deal.

Here’s the gist on the $49 China 8-Day Tour

The Chinese government is subsiziding these deals for overseas Chinese (living in the U.S., Canada, U.K., and I think Australia, and New Zealand) and their friends/families to promote consumer spending inside China. That is how tour groups are able to offer such an unbelievable price – $49 for 8-day/7 nights of hotel stays, internal transportation, meals, and entrance fees and guided tours to popular attractions. So, the good news is that this is a legitimate tour with several benefits, not least of which is money. But remember the “there is no free lunch” axiom? That caveat applies here as well.

Here are the benefits:

It’s a cheap trip and a fanstastic value! All of your hotel, dining, and attraction expenses will be covered under this program. So, if you are truly frugal and disciplined, all you have to spend for 8 days in China is $49 (if you are an overseas Chinese) or $199 (if you are not) plus the cost of your airfare. You will not find a deal like this anywhere else. If you are short on funds, this is a fun and cost-effective way to visit China.
You will stay in really nice 4-star or 5-star hotels that go for $100+ a night, although they will likely be outside the immediate city centers. Just on hotels alone, you would have more than “made back” the cost of the trip.
You won’t have to worry about your itinerary and you will be led to the most popular attractions. There is very little planning you would have to do on a trip such as this.
You will have the opportunity to meet with overseas Chinese folks and maybe even practice some Mandarin!

But beware the caveats…

These tours have mandatory “shopping visits,” which makes sense as the tours’ purpose is to promote more spending in China. Every day, you must spend a couple hours a day at stores and malls that the tour guides take you to. You don’t have to buy anything, but the sales pressure can be pretty heavy. Plus, your time is not your own during those hours. If you miss these tours, you will be fined. This means you can’t take off to do your own activities.
The tour guide may only speak Chinese Mandarin and/or Cantonese. You will have to pay a surcharge for an English guide. This website says the surcharges are $200 per person.
Airfare isn’t cheap! From Los Angeles to Beijing, tickets can easily cost $800 per person for economy class. The costs are even more expensive if you are flying from the Northeast or the Midwest. There is no point in spending this money if you won’t be enjoying yourself on the tour.
Your restaurants and hotels will be predetermined for you. This aspect isn’t different from that of any other set tour, but is something to keep in mind. The food, according to reviews I have read, is not that great with the exception of breakfast. Several ads have described lunches and dinners as “local flavor banquet” and while I love Chinese food, the food that I find the least appetizing are banquet food.
Your time at the attractions will be more limited than if you are traveling independently or if you are traveling with a “normal-fee” tour group. Your guide may be good or not, but his main incentive will be to pack you inside shopping malls or stores instead of providing good commentary on the attractions.

I talked to CB and my parents about whether this trip would be worth it, and ultimately we decide it wasn’t the right trip for us. The airfare is still a major hurdle as it will be over $1,500 for the pair of us to fly back. We don’t mind tours, but sitting in buses and getting shipped to stores where we have to stay for hours per day doesn’t sound appealing at all. There is also the question of time. My PTO schedule is getting mighty tight (having to fly across the country for school visits and interviews will do that to you!), so these 8 days cost something too. Between the flights and the vacation days we’d have to take, we decided to just save up the extra money and just do a trip in China where we are free to craft our own itinerary.

The bottom line: this is a great deal if you want to see China on the cheap and stay in nice places, as long as you don’t mind the less attractive aspects of the tour. If you are interested, here are some reviews and tour descriptions (here and here if you can read Chinese). Your local Chinese travle agency would also know more about these deals. As far as I can tell, they have been going on for the past couple of years, and is extended into Spring 2012.

Would you ever go on a tour like this?

Hat tip to Happy Homeowner, where I first read about this type of tours.

Do No Spend Challenges Work?

Written by WellHeeled on February 8, 2012 · 24 Comments

Many personal finance bloggers participate in “no spend challenges” or count their “no spend days” as a way to rein in the budget and save more money. I once tried a version of a no-spend challenge / shopping hiatus (it was called C.A.S.H. and focused exclusively on clothes, shoes, and accessories) back in 2008, but gave up after 4 months. I have never tried a completely cold-turkey no-spend challenge. Lately, though, I’ve been feeling a little disillusioned and discouraged with the long road to financial freedom, and as I look around my apartment at the hundreds of dollars worth of items that are unused – or, gasp – never used, I’m wondering if I should give this no spend challenge a try.

Will it turn me into a better saver? A more thoughtful consumer? Or will is it a stop-gap measure that will just drive the shopper in me crazy and won’t lead to any lasting change?

So, of course, I made a pro / con list as I think about embarking on a NO SPEND CHALLENGE…

Pros:
It challenges you to, well, NOT spend.
It’s kind of a game – how many days can I go without using money?
It forces you to look at other, potentially less appetizing options, aside from just whipping out a credit card (for example, I may actually be forced to eat the wilted head of lettuce and old bread in my fridge instead of going out for Chipotle. Less appetizing, indeed!).
It makes you become more conscious of often you go without buying something.
It discourages thoughtless, throwaway purchases such as a pack of gum or popcorn.
It encourages planning-ahead-spending.

Cons:
It can encourage “binge buying” behavior. If I just rush out after a no-spend challenge and buy $500 worth of merchandise, that really is no better than spending $10 a day for two months.
It’s unsustainable.
It forces you to pass up really great deals that can save you money over what you would have normally spent.
It doesn’t necessarily help people become more conscientious consumers.

From what I can see, it doesn’t really hurt to try a no spend challenge. Maybe that’s what I need to kick my personal finance butt into gear.