What values are we teaching our children during what Jim Cramer calls the "garden variety depression"?
I received a call this morning from a $75,000/year single mother of a 16 year old who called me because I have traveling experience. On a "limited budget" she wanted to take her son on his first airplane trip, insisting on first class from Philadelphia to Atlanta, stay for one night at one of the nicest hotels, where her son could order room service just for the heck of it, rent a car and all the trimmings.
A few "get the F%^& outta heres!" later and reality set it after I explained that first class "ain't all that" (for 3 times the price), especially on a 2 hour flight in the middle of the afternoon. In First for short haul flights on American, which is generally my airline of choice, depending on the aircraft, you get priority boarding (and dedicated security lines at certain airports) a somewhat larger seat and a deluxe warm nut mix. Air Tran, Delta and US Airways fly the route and having flown each of them I'm know the accoutrements are similar.
When she said "but you fly business and first". I explained that if you "must", taking advantage of loyalty programs available to frequent fliers to earn or buy electronic upgrades makes more sense than paying for first class for short trips. The better business or first class experience is on long haul or international flights where a roomy fully reclining flatbed seat and better meals may be the order of the day and night. Frequent fliers also get priority boarding (and priority security lines at certain airports-Clear Card holders do too at certain airports).
Then we got onto the subject of the best hotels in Atlanta and the concept of room cost, the occupancy tax which could add 15-18% to the cost came up and then the room service for another 15-20%
In the end I helped the woman find a reasonable air fare with exit row seats, a quality but less expensive hotel, where her son could enjoy the "snob appeal" of ordering the "$15 hamburger with 20% room service charge" with the money saved between the first hotel she wanted.
One reason young adults develop poor financial habits as adults is that they are not given the proper foundation for financial behavior by their parents. What did the kid do to earn first class? Is this lady's kid then going to go back and boast to his friends he flew first class? Any kid with savoir faire will simply say "first class from Philly to Atlanta...woop di doo". What's her kid going to do for a follow up? What's the expectation for the next time? Your child may have received a settlement from the death of your spouse, his parent. Some money is available at age 18. The "school"of Paris Hilton is not realistic. What the gossip columns and shows say the stars are doing is not realistic for most people. Creative parents, who do a little research online, can give their kids a great experience without breaking the bank and without succumbing to the pressure to "keep up with the Joneses". The Joneses, having lost 50% of their 401K in the stock market may now be clipping coupons, juggling their kids' questions about what to tell their friends about "downgraded economic status" and wishing they had flown economy more often.