Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

[don]

By ANN CARRNS

When I was in high school, I visited France on an exchange program and stayed with a well-to-do family. When I returned home, I marveled that the household employed a maid who washed my clothes. My mother rolled her eyes. “You have a maid here who does your laundry,” she said. “Me!”

So it was with great amusement that I tried out the “living with your parents” calculator, provided by the real estate blog Movoto (covering the “lighter side” of real estate, it says). The calculator shows big savings from living at home, including the perk of having your mother do your laundry.

The calculator lets you plug in your monthly rent, and other expenses if you choose. It then shows how much you would save if, after college graduation, you live with your parents for four years.

The calculator was created by the blog’s marketing director, Chris Kolmar, who laments that if he had just lived at home for a few years, he would have enough for a down payment on a home.

I plugged in rent of $1,000, and the calculator used his default settings to report that in that case, you would save more than $89,000 by moving in with your parents — and that nearly 2 percent of that amount was savings on laundry.

That raised some questions. Does it mean that your mother is actually doing the laundry for you — or just that you are using her washing machine and detergent?

Sally Olsson, the blog’s spokeswoman, confirmed that the calculator assumes that your mother is doing the laundry — and a lot more. In effect, the savings shown by the calculator come from completely freeloading. (Mr. Kolmar also explains in the blog that he spends $35 a month on a laundry service, because he hates to do it.)

There is no doubt living with your parents can save you money, but shouldn’t you be contributing something? Or at least doing your own laundry?

Do you live with your parents? What do you contribute toward household expenses? Or if you’re a parent, what do you expect from your grown-up children?

http://bucks.blogs.nytimes.com/2013/...gewanted=print

[don]

Re: Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

Putting in a $1350 monthly rent, the calculator savings was $106,917 in 4 years.

Conversely, by their figurin' $100 grand was left out of the economy.

[jiimbergin]

Re: Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

Putting in a $1350 monthly rent, the calculator savings was $106,917 in 4 years.

Conversely, by their figurin' $100 grand was left out of the economy.

You can often see this in action on HGTVs House Hunters or Property Virgin shows. Often someone has lived with parents in order to save for a down payment.

[vinoveri]

Re: Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

Putting in a $1350 monthly rent, the calculator savings was $106,917 in 4 years.

Conversely, by their figurin' $100 grand was left out of the economy.

This is a great illustration of the tension between freedom and central planning, being rational self interest and "it takes a village" nanny state - between a more austrian vs keynsian view of economic - frugality vs the paradox of thrift. Unfortunatel, IMO, we are way further toward the Keynsian collective and conituning to move that way.

Personally, I'm motivated in taking care of myself, my family, contributing to my community (b/c it benefits my family), - country, world, and certainly global economic considerations are way down the list in priorities. "Don't save and be frugal b/c it hurts national/global economic growth" rings hollow and is absurd - but hey those are the crazies that are trying to run the world.

[shiny!]

Re: Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

"Don't save and be frugal b/c it hurts national/global economic growth" rings hollow and is absurd - but hey those are the crazies that are trying to run the world.

This is why we need a model based on sustainability and equilibrium, not infinite growth.

[astonas]

Re: Savings Tip: Let Mom Do the Washing (& Borrow Dad's Car)

This is why we need a model based on sustainability and equilibrium, not infinite growth.

Just one more reason to ditch the initially Keynesian construct of GDP. It distracts us by implying that "growth" is in and of itself good and desirable, when for example a national standard of living could arguably be a better metric. What is so insidious about Keynesianism is that it seems to have set the terminology even for extremely anti-Keynesian monetary stances, such as the Austrian model. In this way, even when it isn't being followed or advocated, it is still distorting the scope and goals of the discussion. And if one stops to think about it, GDP fundamentally favors the interests of the FIRE industries, and the increasing concentration of wealth.

In order to find a better picture to describe the economy, we may want to not only reject the dominant models themselves, but also the flawed building blocks (terminology and metrics) from which they are constructed. It is these more axiomatic flaws that will infect any model constructed using them.

There is no doubt that it is much harder to conduct a decent discussion, let alone numerical analysis, when one is relying on numbers that fewer people consider important. GDP numbers are everywhere, regularly reported and updated. But I think if we keep talking about "recessions" in terms of them, we will always experience a "pull" or bias based on false implicit premises.

None if this is meant as a complaint about what we do here, more as a hopeful request. Should someone happen to encounter a better way of thinking about this, I hope that it gets shared here. There may be an opportunity to find even better answers than we have so far.