This morning, America’s Cheapest Family, the Economides (real name!) were supposed to be on the Today Show again. As I’ve been thinking about how we earn and spend money, I’ve been poking around a bit on their website and checking out their advice, because I think it highlights a few money assumptions that many of us hold… but could use some rethinking.
According to their website, today’s segment showed how they could buy two outfits apiece for under $50. They actually spent far less than that. Let’s use a ball-park figure of $20 for 5 items, or $4 each. Their general rule, they note, is to survey what they need, and then visit a hierarchy of stores. First comes thrift stores. Then comes consignment stores, then comes discount stores (like Wal-Mart or Target).
That’s one approach. Here’s how I recently bought new 5T outfits for Jasper. I went to OldNavy.com. I selected 5 shirts and 5 pairs of pants. I paid whatever they cost (they had a sale, so it was reasonable, about $85 for 10 items) and got them delivered.
Which is cheaper? I think the answer is more complicated than at first glance. I clearly spent more. Five items at my burn rate would be $42.50, or a bit more than $8 apiece. On the other hand, my shopping took less than 20 minutes. How much time does it take to drive to a thrift store with a shopping list, hunt around and see they have some 5T stuff, but the only white shirt is stained, so you head to the consignment store next? If you actually have to hit 3 stores (with kids in tow?) we could be talking a whole afternoon. So this is the key question: What is the opportunity cost of your time? Can I make the extra $4 and change per item ($22.50 total) in the time I’m not driving around? I know that I can. Which means that my quick shopping was cheaper than an afternoon spent shopping, even if the latter means less physical cash straight out of my wallet.
Time has an opportunity cost. But a lot of people never think about that. There may be other issues — I actually prefer working to shopping, whereas many people lean the other way — but this is about allocating resources according to preferences. It’s not about being cheaper.
We also have certain assumptions about how family economics are supposed to work. Over at the Today Show website, the Economides take a question from a viewer, whose husband’s job had been eliminated the year before. He now works for a temp service at less than half the pay with no benefits. The viewer wanted advice on covering expenses for her three boys, ages 12, 13 and 17.
The Economides (correctly) said that their biggest issue was health insurance. They listed a few places where a family can get a temporary policy. And they gave this advice: “Encourage your husband to keep looking for a job that will at least provide major medical coverage.”
Fair enough. But why is he the only one who has to do this? Why can’t the mother look for a job with major medical coverage? The explanation of their situation is vague enough that perhaps the Today Show, in the interest of saving space, didn’t mention the mother’s job. But somehow there was space for describing the odd jobs the boys were doing to earn cash. Why isn’t this suggested for a woman whose children are not only in school, but old enough to look after themselves (or each other) in the afternoon if she found a full-time job with benefits? It might not work. If she is out of the workforce, re-entering isn’t easy. But she could try the temp service too to start. And if it did work long term for her to get a full time job, the economic impact on this family would be far greater than asking for a waiver for SAT registration fees.
I imagine they didn’t mention this option because it opens a can of worms on how families choose to split their responsibilities. But tough times call for rethinking lots of things — including who can be a breadwinner.