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Financial Peer Pressure

financial peer pressurePeer pressure.  We think it goes away after high school, but it never really seems to disappear – it just changes.  Lately, I’ve been noticing a lot of financial peer pressure among my friends and colleagues.

What is financial peer pressure?   It’s someone trying to convince you to spend money that you would prefer not to spend.  “Hey, come out to lunch with us!”  “You should totally go on this trip!”  “Oh my gosh, you must buy that dress in the window.  It will look perfect on you.”

Now, none of the people saying these things are doing it to be cruel.  In fact, most times, they think they have your best interests at heart.  Or maybe they just want to spend time with you.  Let’s look deeper into one of these situations.

Joe brings his lunch to work everyday.  He makes a decent salary, but he and his wife are trying to pay off their car loan, and part of their saving plan includes only eating out twice a month for date night.  They both bring their lunch to work everyday.  Today, Joe’s coworkers have decided they want to go out for a group lunch.  “Come on, Joe, join us!  Lunch will be under $20!  It’s not that expensive.”  Joe’s coworkers know that he prefers not to eat out.  He has even told them that he and his wife are trying to save money.  But Joe’s coworkers think they’re being friendly by inviting him.  They like Joe and they want to have lunch with him.  To them, $20 isn’t that much money.  Joe knows that $20 won’t change that much in his plan, but he doesn’t want to go back on his commitment.

Joe is facing financial peer pressure.  I’ve seen this example happen a lot.  Joe’s coworkers should be more reasonable about his wishes.  Of course, they shouldn’t just leave Joe out.  I have a coworker who never wants to eat out, but when we are going in a group, I’m always sure to say something like “Hey, you probably brought your lunch, but we’re going to X for lunch.  You’re always welcome.”   She may never choose to join us, but I always want her to know she’s welcome.  It’s probably still financial peer pressure, if I think about it, but I’m trying.

This is especially hard when you have friends or family who are in different financial situations than you are.  I have had to tell friends that I can’t go on trips because I just can’t swing the plane tickets right now.  It’s hard, and there’s always the feeling that I’ve missed out on something.  But I can’t let the financial peer pressure put me into debt.

Financial peer pressure can get especially annoying when someone thinks they know your financial situation.  Even when they’re right, they might not know your priorities.  From the example above, yes, Joe could afford to go out to lunch.  But Joe’s priorities mean that he needs to save that money for something else.

Does this mean that sometimes, your priorities may shift?  Sure.  Maybe all of your friends from college are getting together next summer and you really want to go.  You will have to shift around some of your money, and maybe scrimp more in one area so you can afford the trip, but you have decided that it’s worth it.  The key is to make sure that you are making the decision and not bending to the peer pressure around you.

Financial peer pressure can be hard to face.  But if you remind yourself of your priorities and what your goals are, you can remain strong and be able to say no.

Renting is Not Throwing Away Money

A very good friend of mine was recently looking to leave her current rental situation with roommates and was looking in to whether or not she could afford to buy a place.  Her general line of thinking was “Well, when I’m renting, I’m throwing away money.”

That’s not true at all.  Renting is not throwing away money.  Renting means putting a roof over your head, and that’s clearly critical to your survival.  In fact, there are plenty of perks to renting.

When I bought my house, I had been saving for a downpayment for years, but one big driver was the rising costs of rent in my apartment complex.  Not only was rent increasing, but we were going to have to start paying for parking, which was going to tack an additional $200 on top of the rent.  So when I found that I could buy a house and my monthly mortgage, tax, and insurance was going to be the same price as my rent, it was clearly a bargain, right?

Well, not quite.  Because just because my monthly payment was the same as my rent, there were a whole lot of other bills that weren’t factored in.  My apartment included electric, gas, and water in the monthly payment.  Those were all going to be added bills.   So already, living in a house was more expensive.

Then there are the repair costs, and the hassles that go along with it.  At my apartment, if something broke, I called the landlord and someone came to fix it.  They even replaced lightbulbs in the light fixtures.  At my house, if something breaks, I have to find someone to fix it, and of course, I have to pay for it.  In the past two years, I’ve had two very expensive repair projects to do around the house.  It’s always painful to pay those bills.

If you want to play around with the math, the New York Times has a great calculator where you can figure out which is better – renting or owning.   If I plug in my stats and don’t touch the section called “What Does the Future Hold,” I come out on the side of ownership for my current house.  But as the calculator indicates, we can’t predict the future.  There is no guarantee that home prices will rise.  Given recent history, it’s likely that the prices will have some large ebbs and flows, and some of that will vary based on where you live.

If I drop the rate of growth to 0%, meaning that I sell the house for what I paid for it, it looks like I still come out on the side of ownership, though if I were renting, I would likely have a smaller place and be spending less.  And there really isn’t a good way to include those one-off expenses like having to have a tree removed after a storm or having to buy a new water heater.

Don’t get me wrong, I still think that for me, buying was the right idea.  I found a house in an area that I like, and I enjoy that it’s mine.  It’s a larger space than I would be able to afford as a rental, so in that way, it is a bargain.  But that’s not to say that I recommend renting to everyone.

In my friend’s case, I don’t recommend buying a house.  She isn’t sure that her job is what she wants to do long term.  Renting leaves her the freedom to look for jobs in other areas.  She only has a lease to worry about, whereas I would have to worry about selling my house if I wanted to leave the area.  For her, renting makes the most sense.  She has much more freedom and since she decided to rent a place that includes utilities, she knows exactly what she needs to budget each month. So don’t feel like you need to buy a place because “that’s what people do.”  Renting is not throwing away money.  Renting is a perfectly logical way to pay for your home.

LuLaRoe Disney Prices

LuLaRoe Disney PricingLuLaRoe recently announced a two year collaboration with Disney.  We all knew that the prices for the Disney items would be more expensive, so I can’t say that I’m surprised by the new price list that just came out.  Considering that I think the items are already overpriced for the quality you’re getting, the pricing for the new Disney items just isn’t worth it.

Of course, the consultants won’t tell you that.

First, let’s take a look at the regular LuLaRoe prices for the items that will also be offered as Disney items:

Dresses & Skirts
Carly – $55
Cassie – $35

Tops
Classic T – $35
Irma – $35
Randy – $35

Kids
Kids Leggings – $23
Mae – $32
Sloan – $28

Leggings
Tween Leggings – $23
OS/TC Leggings – $25

Now, let’s take a look at the LuLaRoe Disney Prices

Dresses & Skirts
Carly – $65
Cassie – $38

Tops
Classic T – $40
Irma – $44
Randy – $42

Kids
Kids Leggings – $24
Mae – $40
Sloan – $34

Leggings
Tween Leggings – $25
OS/TC Leggings – $30

In some cases, the markup isn’t bad.  Kids leggings go up $1.  So if you think that $23 is a reasonable price to pay for a pair of leggings for a kid (I certainly do not), then what’s one more dollar?  The Cassie skirt only goes up $3.  Not terrible.

But then there are the ridiculous markups.  An extra $10 for a Carly dress?  In my opinion, the Carly dress is just a giant oversized t-shirt.  Sure, if styled right, some of them can be cute, but I’m not paying $65 for a glorified sleep shirt, even if it does have my beloved Mickey Mouse on it. The Irma top (a slightly different shaped oversized t-shirt) increases in price by $9.  The Randy shirt at least has some structure to it, and it goes up $8.

Leggings, the product for which LuLaRoe is known, increase by $5 for the adult sizes.  So now they’re asking you to pay $30 (plus shipping and tax, depending on where and how you buy) for a pair of leggings that they admit are prone to tearing.

LuLaRoe Disney Prices TShirtDon’t get me wrong.  I’m a Disney fanatic.  I own multiple Disney t-shirts and I go to the parks at least once a year.  But my t-shirts?  They were all bought at places like Target, where you can buy a cute Disney top for under $20.  Also, while you can technically wear LuLaRoe items in many different settings (though I am personally still against leggings as pants), I’m not sure that adults should be regularly wearing Disney-related items.  As casual wear, on vacation, around the house, sure, wear what you want.  But if I’m paying $65 for a dress, I want to get some use out of it.

I think some people were hoping for a quality increase with this new Disney line, but we have heard nothing of the sort from LuLaRoe.  (And based on some of the photos I’ve seen, the styles aren’t exactly what I would consider more attractive either.)  So the question is whether or not you want to pay these sorts of prices for low quality merchandise simply because they feature Disney characters?

I’m interested to see the items that come out with this new collaboration.  I have a feeling that these will be much like a lot of the other LuLaRoe items – certain patterns fly off the virtual shelves while consultants are stuck holding on to the uglier ones, unable to move them regardless of any Disney affiliation.

The more I read about LuLaRoe, the more I think that this was a company that grew too big too fast.  Their initial products were nice – made in the USA and higher quality.  But now, as items are rushed to market and they’re looking to make an even bigger profit, the quality is suffering.  And not only are the customers paying for it, but the consultants are paying for it as well. If you’re considering selling LuLaRoe, do yourself a favor and do some serious research.  Look at all the consultants hosting “Going Out Of Business” sales and ask them why they’re leaving the company.  I think you’ll learn quite a bit.

 

LuLaRoe Quality Issues

LuLaRoe Quality IssuesIt seems like you can’t go anywhere without seeing or hearing about LuLaRoe, the company with the “buttery soft leggings” and cute tops, dresses, and skirts.  They have achieved a cult following, with people obsessively hunting down a desired print, often referred to as a “unicorn.”  I have discussed before how I don’t think this company is great for the consultants (the people selling the product), but I haven’t spent much time on the products.  I think that some of the items are cute, but for the price you’re paying, the quality is absolutely terrible and not worth the cost.

I’ll be honest, when I first went to my first LuLaRoe party, I got hooked.  I found a couple of cute dresses that looked good and were easy to buy.  I was excited to know my sizes in the various styles so that I could also do some shopping online.

My delight didn’t last long.  One of the dresses I was looking for was the Amelia dress (the dress with the pockets – every woman’s dream) in a simple color so I could wear it to work.  I found a consultant who had it in black and immediately ordered.  It was everything I wanted.

Then I washed it.

I washed the dress per the LuLaRoe instructions (inside out, on the gentle cycle, and I even put it in a sweater bag for extra protection).  I hung it to dry, as I do with most of my clothing.  And the dress shrank.  It drew up a full four inches.  And this wouldn’t be a huge issue as I’m a short girl and it’s a longer dress on me, but because of the way the bodice pulled up, it no longer fit well.

I paid $65 for this dress.  It was a complete waste of money.  And there’s nothing I can do about it.  I complained and was told that I washed it wrong, was scolded for putting it in the dryer, which I did not do, but of course, can’t prove it.  I also noticed that two shirts I bought in the same size and style were not actually the same size.  One is significantly larger than the other.  Of course, I don’t know which one is more “accurately” sized, so I can no longer trust which size to buy in that item.

So after this happened, I started paying closer attention to LuLaRoe quality issues. And I found tons of complaints.

The leggings tear so very easily. Source

The leggings tear so very easily. Source

LuLaRoe leggings cost $25.  They’re not cheap.  And unfortunately, their quality isn’t great either.  I don’t know about you, but if I’m putting something on my body to cover parts I don’t want exposed, the last thing I want is to risk it tearing and exposing me in public.

LuLaRoe is apparently even aware of this issue:

“The leggings may get holes, because we weaken the fibers to make them buttery soft,” Patrick Winget, the head of production for LuLaRoe, is quoted as saying in the January 17 email. “We have done all we can to fix them.”  Source

So for $25, you want me to buy an item that you’re well aware may tear?  Yes, I have bought delicate fabrics before, but they were never the sole item covering a part of my body.  And remember, LuLaRoe also sells kids sizes.  We know how hard kids are on their clothing.  And you’re selling something that people claim tear “as easily as wet toilet paper?”  No thank you.

One thing I did notice very early on about the quality of LuLaRoe items is that there is no attempt to make patterns match up.  This may not be a huge issue, but it can lead to some very unfortunate looks, and in my opinion, it’s the worst when it comes to stripes.  If you’re wearing a striped dress, the stripes on the front should match the stripes on the back.  And if the stripes are vertical or horizontal, they should be perfectly on that axis and not crooked.  LuLaRoe’s quality inspectors don’t seem to care about this.

lularoe quality issues

Two pairs of the same size of LuLaRoe leggings should actually be the same size, right?Source

I think it’s very possible that at one point, LuLaRoe did have a great product.  But I think they grew too fast and decided to prioritize speed and cost over quality.  After all, if they just lower the cost to produce the items, they can make more money without having to raise the price to their customers.  The customers won’t realize that they’re getting much lower quality than they did a year ago.

Should you still buy LuLaRoe?  Sure, if you want to.  But be aware of what you’re spending your money on.  Be aware of the risk that the quality may not be what you want.  You’re better off if you buy at an in-person party where you can meticulously scrutinize the item before you buy it.  Check the seams, make sure nothing is pulling apart.  Try on the item, make sure it’s sized as you believe it is.  Sure, you won’t know if it will shrink, but at least you’ve done what you can.

Or do what I plan to do and enjoy the pieces you have and don’t buy any more.  It’s just a waste of money.

Quick and Easy Ways to Lower Your Bills

easy way to lower your billsIf you’re looking to save money, one recommendation from many financial experts is to check out your bills and figure out what you don’t need.  Are you paying for any services you don’t use?  Do you really need that Netflix subscription?

But what if you’ve looked at all of those things and decided that yes, while it’s true that you don’t need a Netflix subscription, you really would like to keep it, and you can’t figure out any other things you can cut.   However, maybe you have a busy summer coming up and don’t expect to be watching much – consider canceling your subscription temporarily.  Don’t worry, Netflix will always take you back.

Then it’s time to look at how you can reduce what you’re paying on those bills.   Unless you’re getting DVDs from Netflix by mail, it’s unlikely you’re going to be able to reduce that bill.  But what else do you need to stream Netflix?  That’s right, internet access.  How much are you paying for that access?  Take some time to call your internet company and see if there’s any way you can reduce your bill.  Maybe they have a promotion running that they can put you on.  If your company also has an online chat option, use that as well.  Sometimes the phone reps and the internet reps have different deals they can offer you.

Do you also have cable TV?  Consider dropping some of those extra channels (or consider dropping pay TV all together).

How about your cell phone – what do you pay for your data plan?  How much data do you use?  Do you pay for an unlimited plan but find yourself using less data than you thought?  Could you save by going to a limited plan?  A few months ago, I looked into my cell phone plan and realized that my carrier had changed their plans – so for $5 less, I could have more data.  Clearly, I switched.

When’s the last time you talked to your insurance agent?  Give them a call and see if you can reduce your costs for your home/renters/auto insurance.  If you want to take it a step further, do some research into other insurance companies and consider switching to a new company.  Just make sure you’re not skimping on coverage.

How about medications?  Now this one is not to be taken lightly, but if you’re on a regular prescription that still costs a pretty penny even with insurance coverage, have a chat with your doctor.  For example, I was on a medication that cost me $100 each time I filled it – but I could fill it with a 30 day supply or a 90 day supply for the same price.  Clearly, I saved money if my doctor prescribed a 90 day supply.  Ultimately, I ended up switching to a medication with a much lower copay.  Obviously, this isn’t an option for everyone, and you should always listen to your doctor, but it never hurts to have the conversation.

Though it’s not always the most fun, take a look at your recurring bills and see if you can whittle down the costs a bit.  Remember, even if you save $10 each month, that’s $120 a year.  If you can do that on a few bills, the numbers add up.