Sunday, April 4, 2010

4 Questions (But it's Not Mah Nishtana!)

I've been really busy with Passover preparations and then Passover and just haven't felt up to writing any posts (though I've done some commenting here and there).  Today I started to comment over on The Simple Dollar but I could see it was turning into a novel and decided it would be better here!  I mean, if I'm going to write something of a significant length I may as well make it a post, right?

Trent asked his readers to give their snap response to 4 questions.  The questions were:
What is a wedding supposed to cost?
What is an automobile supposed to cost?
What is a home supposed to cost?
What is a three week vacation for a family of four supposed to cost?

Then he went into how these "mental anchors" determine how much you think you should pay for these kinds of things.  Basically, it was all about keeping up with the Joneses and how you should just think for yourself.  There were only a few responses but so far, they were all along the lines of how great a post it was.

What is it with me that I'm disagreeing with Trent so often these days?

FWIW, my answers were:


Why did I answer the way I did and does that mean I want to or need to spend that much on those things?

For the wedding, the range that gets tossed around the most in the articles I've read is $25 to $35k. And I actually know a bunch of people who spent more.  I happen to think that's a ridiculous amount to spend for one day. I've been married twice. The first time I got married at home, with 25 of us present (including the bride and groom!). We each had one attendant and my dress cost $250 from Sears (1977 prices). My parents sent out announcements instead of invites. It probably cost about $1,500 or less even though we served roast beef!

My 2nd wedding was considerably bigger. We had the ceremony outside at my rabbi's house, with the reception in our synagogue (which at the time was being rebuilt, so it was really in the gym of the day school!) but we only invited about 60 to the meal. The rest of the community was invited to the ceremony and for dessert and dancing (taped music). I actually wore the same dress (yes, the one from 1977)! We spent about $4k.

I've spent about $22,000 to $25,000 a couple of times on new cars (Buick Century both times, and one of them saved my life thank-you-very-much) and I'm comfortable with that as a price for a new car, although my preference is either to buy a year old car or a lease return or a demo at the end of the sales year.  Actually, that's what we did when we bought my hubby's dream car, a PT Cruiser, shortly after we got married.  Of course, the car cost more than $25,000 (about $32,000 in the end) but we did still pay it off early.  And I'm not planning on us buying a car to replace it for several more years!

As for the house price, that's about $50 to $100k over the cost of the cheapest teardown in a bad neighbourhood here!  What can I say?  House prices in Vancouver are high.  My old studio and den condo cost $96,900 (about a dozen years ago, before prices took off) and I sold it at the height of the market for $176,000 (and it was pretty much the cheapest condo for sale in the city at that point).  I used about half my profits from the sale to buy (outright) an older home in the rural area where we plan to retire.  And I put the other half into the house my Eldest Daughter and her partner bought here in the city (where we live with them).

As for the vacation, I figure it costs about $500/day for a family of 4 to take what I would consider a "nice" vacation including transportation, accomodation, food and souvenirs.  I know I could go camping for a lot less but I don't like camping.  Not everybody does.  My idea of a vacation is a hotel where they provide everything and clean up after us.  Or, better yet, a cruise!  I've done a lot of travelling in the past (my dad worked for an airline and we flew for free) and there's a lot of places I'd like to go back to but flying is really, really expensive when you have to pay for 3 people!  Not to mention, the fact that we keep kosher also limits where we can stay and where we can eat!  And eating in kosher restaurants is very expensive.  So, we don't travel much.  And when we do, it's usually driving down to stay with friends in Seattle or something like that.  We haven't even gone to Israel so all our relatives can meet our Dear Child (she has lots of cousins there) even though it would be very cheap once we got there, what with staying with family and all, because the flight would cost between $1,500 and $1,800 each and $5k is a LOT of money just for the airfare!

So, what does it all mean?  First, there is no real connection between my answers to those questions and what I actually pay for those items.

Second, sometimes you do want to pay more for a certain kind of experience.  And that's not wrong!  If the vacation I really want is in Israel or Italy, then camping in a tent in a national park is a complete and total waste of money for me no matter how little it costs compared to the other vacation!

Third, Trent really does have a good point when he says: "The value is what you get out of it. Does it make you happy? Does it meet your needs? Those are the things that matter, not matching what someone else is doing."

Where he was wrong was in trying to correlate the first figure that jumps into your head with what you would tend to turn around and actually pay for the item.
Now, does anybody else want to jump in and answer those questions (and then say what you'd really pay)?
Oh yeah and for anybody who didn't get the title of the post, there's a point in the Passover seder where the youngest child asks the 4 Questions.  It's sung in Hebrew and starts "Mah nishtana ha layla hazeh mikol halaylot?" [Why is this night different from all other nights?]


DogAteMyFinances said...

I mean I can decide that I get 100K in value out of a home, but that doesn't mean I can buy it for that. The anchors are there for a reason! They're reality!

After Trent quit his job, his posts just get more and more defensive about comparing people (himself) to others.

Shevy said...

That's right, like $450k being the rock-bottom cost of a teardown here in Vancouver. I could say I wanted a little house for $150k here but that's not reality. You can't get a minimum size bare lot for that.

It happens that I want to retire to a small town and that I was able to buy for much less there, but if I were to up and move tomorrow we wouldn't have *jobs* and I'd have to homeschool my daughter.

For now I deal with the reality of living here (and going to the house for weekends and such), as well as doing the extensive local driving we have to do with the extended family that we live with.

His situation is very unique. Not everybody can do what he's done. Not everybody wants to. He *says* you should choose what you value rather than what someone else tells you to value, but I still hear him telling me that his way is best.

Revanche said...

Oh my goodness, I recognized the custom when you mentioned it at the bottom of the post.

Frankly, I'm impressed you could wear the same dress, I don't know anyone who could wear their wedding dress again after a few years.

Also, "supposed to cost" doesn't really matter since I just know what I find reasonable versus what the societal norms are. And those both may differ from what I end up spending.

I really don't want a wedding so I wouldn't want to spend more than $5000 if I had to have one.
A car? I'd top out at $10k
A home? I'd prefer to spend no more than $200K but that completely depends on where I ended up.
A three week vacation for a family of four? I have NO frame of reference. My family never went on vacation.

Anonymous said...


I wanted to get in touch with you, do you have an email I can reach you at