<p>It depends on the economic efficiency of the items you spend on....</p>
<p>Compare </p>
<p>*paying 30 dollars for someone to jump on peat to speed up the process of fossil fuel creation
*paying a firm for 30 dollars worth of oil </p>
<p>I assert one payment is more useful to the economy than the other.</p>
<p>Galoisien, your original argument was that it makes no sense for college students to eat out "so much" (after someone said once or twice on weekends) and that it contributes to the recession.</p>
<p>But I think most of us agree that it does make sense for college students to eat out, once in a while. If you have the money and enjoy eating out, why not? A recession is a slowdown of economic growth as a result of inefficient use of resources. I don't think that going out to eat once a week is resulting in a recession. The average person doesn't think, "Gee, is my payment more useful to the economy than another action?" before they do everything. Saying eating out --> recession is ridiculous.</p>
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The average person doesn't think, "Gee, is my payment more useful to the economy than another action?" before they do everything
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</p>
<p>No the assumption of the free market rests on the fact that actors spend their money in a way that will benefit them most.</p>
<p>But students may not be as informed of ways to maximise their spending power.</p>
<p>It makes sense for college students to eat out occasionally. Not regularly, as some people seem to do. That is plain foolishness.</p>
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I don't think that going out to eat once a week is resulting in a recession.
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</p>
<p>Once a week is more than "occasionally". And imagine of millions of college students doing it, 52 times a year.</p>
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No the assumption of the free market rests on the fact that actors spend their money in a way that will benefit them most.
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Exactly! In a way that benefits them the most - some people feel they benefit from eating out! Sure, it costs more money, but if they want to, then why not?</p>
<p>There are benefits to eating out as well as staying in. You're acting like college students are standing on the sidewalk, ripping dollar bills to shreds and using them as confetti. There are many reasons people choose to eat out. Guess what, buying a $500 bag might be inefficent, since you can get a perfectly good bag for $50. Buying a $40 lip gloss might be inefficient, since you can get a nice lip gloss for $8.</p>
<p>But people choose to buy luxury goods because the utility they derive from consumption of those goods is greater than the price. A down-to-earth person like you may feel eating out 1-2 times a week, $500 bag, $40 lip gloss are all unecessary and extravagant, but there is nothing wrong with people who can afford those things to get them. Much of what you do daily is considered "foolish" by people in 3rd world countries. Maybe they think it's silly you have more than 3 pairs of shoes or a rug in your bathroom - you can do without those things.</p>
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45% in stocks? Are you serious? How much did you lose over 2008?
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<p>Not a lot <em>knock on wood</em>, I started the year with only around 15% in it, but soon after the fall I started dollar cost averaging and picking up other stocks that have been beaten. I don't expect us to be at the bottom yet, which is why I still have 45% in cash, which I will use if the market drops further down.</p>
<p>
[quote]
It depends on the economic efficiency of the items you spend on....</p>
<p>Compare </p>
<p>*paying 30 dollars for someone to jump on peat to speed up the process of fossil fuel creation
*paying a firm for 30 dollars worth of oil </p>
<p>I assert one payment is more useful to the economy than the other.
[/quote]
</p>
<p>It does not depend on "economic efficiency of the item you buy." The only things in the economy that make money are things that people have demand for. As long as people demand something a market is eventually created for it. If, somehow, paying someone $30 to jump on peat makes someone else happier than actually having oil, then someone will be willing to sell them that service. Spending money increases aggregate demand and increases real GDP regardless of what they are spending the money on.</p>
<p>For some reason, you only believe paying for necessities are good for the economy. That's not how the world works. If everyone was forced to just buy "necessities" (wheat, milk, eggs, clothes, homes, etc) people would have very miserable lives. It's the fact that people are willing to spend money on luxury items and services is the reason why more jobs are created. It's economics 101 - as long as people are spending money, it's undoubtedly helping the economy.</p>
<p>"45% in stocks, 45% in cash (savings), 10% in checking, with -5% of that in credit card debt."</p>
<p>Why is the 5% in credit card debt not paid off if you have 10% in checking?</p>
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Why is the 5% in credit card debt not paid off if you have 10% in checking?
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</p>
<p>It's not actual debt, it's revolving credit that I will pay off fully once I get my statement for the month.</p>
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For some reason, you only believe paying for necessities are good for the economy.
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</p>
<p>Actually I'm talking about stuff with the highest MB/MC.</p>
<p>Luxuries are nice. But luxuries are something to be had after this little thing called graduation.</p>
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It's economics 101 - as long as people are spending money, it's undoubtedly helping the economy.
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</p>
<p>The spending multipliers will be different depending on what you spend it on.</p>
<p>The spending multipliers for eating in, I think are much higher than the spending multipliers for eating out.</p>
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Luxuries are nice. But luxuries are something to be had after this little thing called graduation.
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I don't understand why you don't get it. It suprises me because you seem relatively smart. </p>
<p>Luxuries are for after graduation? That's your opinion. What you feel doesn't apply to the entire college population. You can't afford luxuries before graduation, or you simply don't want 'em - that's fine. But other people CAN afford luxuries. I know students who don't have jobs, but drive fancy cars and eat out regularly - are they foolish? No, they're rich.
[quote]
The spending multipliers will be different depending on what you spend it on.
The spending multipliers for eating in, I think are much higher than the spending multipliers for eating out.
[/quote]
Dude, stop regurgitating everything you learned in Econ 101 and use your common sense for a minute - the average college student doesn't think about any of this stuff. Yes, we all understand that eating out is more expensive than staying in, but many of us choose to do so, because we want to and can afford it. If you don't want to, or can't afford it, that's fine, but stop being irrational and actling like it's crazy to eat out and it's causing a recession. You know what's irrational? Getting a mortgage you can't afford to pay off. Buying lunch is not.</p>
<p>"Luxuries are nice. But luxuries are something to be had after this little thing called graduation."</p>
<p>A luxury to one person is not a luxury to another person. Going to a concert is a luxury to me because I don't do it very often. Some people might go to concerts every weekend, so it is not a luxury to them.</p>
<p>My question is what does the avearage college student have for spending money per week? I would really like to know this as a parent. I must say, this is a simple topic in my mind and the over intellectualizing of this makes me wonder whether the word fun fits into your economic model. After all, college should include lots of fun too. Agree?</p>
<p>Much of my fun comes from durable, not consumable goods. Or at least consumable goods that will last me the entire year.</p>
<p>I get all my spending money from my part-time job, but that's a personal choice. My parents offered to give me some spending money - not much, though, since I am on scholarship and even after financial aid and merit scholarships my school is expensive for my parents. </p>
<p>Also, different schools are different. I live on campus and my school offers all means during the week, but no dinner on Saturday nights. So it's customary for most people to go out and eat at a restaurant (usually a cheap Mexican joint where we can use our student ID to get a discount on food that's already cheap). Then factor in money for snacks, toiletries and other necessities (gotta buy a new tube of toothpaste every now and then, and deodorant/shampoos run out fast), and what's left goes to savings and clothes. </p>
<p>And for some people, 5% to 15% of spending money goes towards birth control. Which end of the spectrum you lie on depends on whether you have high risk tolerance.</p>
<p>I don't spend my money. I spend my parents' money.</p>
<p>I am thinking about buying a new iPod, once my current one falls apart and disintegrates into a little pile of plastic and metal. Or wait for my parents to get me one for my birthday :)</p>
<p>But with the markets going the way they are: 99% savings and checking. 1% cash 0% stocks, equities or other paper. I'm not going to **** money away on the stock market. I've worked way too hard to save up that money. The way things are going, I might want to buy gold and silver bullion, a one-way ticket to Toronto, and transfer my money to a healthier, Canadian bank (I bank with Citi, which is on life support, and Etrade, which might collapse at any moment).</p>
<p>As for my parents' money-I spend it on food, entertainment, airfare and metrocards mostly.</p>
<p>I consider cooking to be more of an art than science. I almost always play fast and loose with ingredients and NEVER measure, ever. Probably the reason I can't bake. But I can do everything else.</p>
<p>Most of the cooking I learned, I learned when my mom was working late and on television.</p>
<p>@poetsmom: I asked about that a few weeks ago and found that it really depends on the individual student. Does your student like to go clubbing? Eating out? Buying clothes/games/food/magazines, etc. How about plays. concerts, museums, movies? These things can cost anywhere from $25 to $500 monthly depending on individual spending habits.</p>
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I know students who don't have jobs, but drive fancy cars and eat out regularly - are they foolish? No, they're rich.
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<p>Either that or they're living way above their means, like a lot of Americans. Either way, it's up to them how they spend their money. As my AP econ teacher in high school said, we'll make smart financial decisions by saving and benefit from the public school kids that will live way above their means because they didn't have him for econ ;).</p>
<p>^ Well, I go to NYU, I know you do as well, and there's plenty of rich people here :) there's nothing wrong with people who have money to spend spending it. That's what money is for, isn't it? spending. No sense putting it in a shoebox and hiding it under your bed for 50 years. If we all stopped spending we would have the problem Japan is having now, where the people are so intense about saving that all their businesses are shutting down because people refuse to spend (ok and also because their economy relies so heavily on exports but I don't need to hear that argument).</p>
<p>I never said there was something wrong with spending money. There's nothing wrong with spending money, though I'm sure when people make decisions about spending money they couldn't care less about the macroeconomy. America could to more saving however. 0% savings rate is unsustainable, on both a personal finance level and a macroeconomic level.</p>