The Wall Street Journal just had a short article about how much kids should pay for college. The rule of thumb was not more than the average salary you will make over your first ten years out of college.
I had to laugh because I don’t think kids have a clue what they’ll make the first year out of college, let alone the first ten. Maybe it starts to come into view while you’re in college, but I cannot imagine high school students knowing anything about this, or caring.
A friend of mine didn’t want to go to Prom in high school because he was convinced that “tuxedos cost like a million dollars.” And I remember assuring him that “dude, you just rent the tuxedo. So it’s only like a thousand dollars. It’ll be fine.” Well he never went to Prom, and I never discovered the cost of renting a tuxedo (I claim the not-pertinent-to-me defense).
But also to this day, I remain pretty clueless about how much really random things cost. I am putting together a 5K fundraiser, and called an insurance company for a quote for single day even liability insurance. According to the associate, a one-day non-competitive sporting event including “additional insured” for the State Park venue comes to… drum roll………. $150.
I was like “that’s IT?!” And I almost bought it on the spot, but decided I should check out 1 or 2 other companies. $150 is really cheap compared to my expectation. Ironically, I had assumed that the insurance would cost about $1000 (guess that is my go-to WAG value for life).
But obviously $150 is not cheap, especially when it is an up-front cost to me for a charity event, which I must later go and get underwritten by a sponsor. So it really is important to shop around.
I have always found the question of “whether something costs too much to ME” to be challenging. When you go to rent your first apartment, or buy your first car, it always comes down to “can I manage $600 for rent, or $200 for a car payment?” And I have never known how to answer that. You just know when you get into it. The only useful advice I have ever heard on this topic is that your housing costs should be no more than 1/3 your take-home pay. I heard that on the news when I was 10 and have always sought to live well below that. Any additional living costs I have compared to that value.
But when it comes to $150 for a fundraiser cost? I don’t know. I can afford $150 for charity, and plan to get the cost underwritten. But in the event that I cannot, I would definitely prefer the lowest cost possible. Hey, at least I’m already doing better than $1000 🙂