A couple of weeks ago, a friend of mine proudly showed me her new Coach handbag. I ooh'd and ah'd at the treasure she'd acquired and listened to how she had been looking at them at the Rideau Centre for quite some time. She was quite excited about the fact that she'd purchased her bag in Florida for under $200 where the same bag in Ottawa would have cost $300-400. Clearly, her bag was a bargain shopper's dream. And this particular friend truly knows how to find a good deal; we find out about a few different new ones every time we visit. (Personally, that's WAY outside of my spending comfort zone on an item like that, but that's a choice each individual must make on their own, based on their own circumstances.)
Not long after, I was watching a segment on Ellen and she was giving away a pair of Coach sunglasses. Just last week I was at Costco and saw a girl walking in with a rather garrish, in-your-face Coach bag (see similar bag to the left). After that, I realized that this is a status symbol trend that has gotten a lot more prevalent recently. Of course, Coach has been a status symbol for a very long time, but until recently, I thought it was pretty much reserved for upper class folks that have far more money to burn.
Since I was recently laid off and the economy is in the toilet, these incidents/observations got me thinking about what message status symbols send. After all, the current economic situation is rooted at least partly in the U.S. real estate crisis - and isn't a house one of the ultimate (and most expensive) status symbols? Of course, the lenders must shoulder much of the blame because they intentionally approved mortgages they knew the borrowers could not afford. They were counting on basic human nature of wanting "bigger, better and faster" to try to maximize their profit margins. Obviously, the scheme worked until it all fell apart.
Buying a house one can't afford is foolish, but as an investment you intend to pay off over 20-30 years, it can be somewhat justified, though I wouldn't recommend it! The one status symbol I'll never understand is cars. What possesses people to purchase a car they can't afford when it immediately depreciates the second they leave the lot?!
A couple of years ago, a couple we know purchased an Infiniti G35. They proudly drove their shiny new car throughout the fall of 2007 and spring of 2008. Then, in the summer of 2008, the car started to sit in their driveway more and more. We eventually found out that, because they had to fill it with premium fuel, they were opting to share their far more fuel efficient Toyota Corolla. Oh, and last week, the Corolla was replaced with their brand new Toyota Prius - an even more fuel efficient (hybrid) car...and the G35 is once again sitting in the driveway more often again this summer as gas prices slowly rise. Personally, though it is a bit of a gas guzzler, I'm quite happy with my Hyundai Santa Fe that was less expensive than the G35 and the Prius! I also appreciate having only one car payment.
So, what's my point? Just that perhaps we (people, in general) are not particularly good at counting the cost of "things" these days. Making a $200-300 purchase is something many people do without even batting an eye anymore. So, is a Coach handbag excessive or frivolous? Not if that's the level of quality you appreciate, desire and can afford. Going into debt to have a name brand item or increasing your debt to buy a name brand item has gotten so many of us into trouble - me included. Of course, we keep doing it to maintain an image. I do wonder, though, if these often highly coveted status symbols might ever backfire and begin to symbolize poor money management for some.
Of course, my thoughts are probably nothing new to anyone who has to support themselves or their family right now. It's only natural in these troubled economic times (DRINK!) to re-evaluate how you think about and spend money. Maybe I'll even retain what I'm learning now when things do get better!