Common Financial Misconceptions

I’m quickly approaching the completion my second book: The Savings Solution.  While the book is almost all new content, I am revising some of my favorite and relevant blog posts and including them as sidebars.  One such sidebar follows. Although adapted from a post I wrote back in December, 2007 it is as relevant to my life today as it was then.

I welcome any and all thoughts!

Before I had children, I traveled to Ann Arbor, Michigan several times a year to attend University of Michigan football games . Unfortunately, the quantity of my Michigan visits plummeted when I became a father.[1]

Nonetheless, my wife and very young daughter did manage a visit to Michigan in 2006. And, yes, our visit was timed around a certain football game. But this story isn’t about football.

You: What’s it about?

The zoo.

You: The zoo?

The day after the football game, we caught up with some old friends at the Detroit Zoo.

You: You have friends who live at the zoo?

No, we met at the zoo.

You: So you were living at the zoo when you met?

No—no one was living at the zoo.

You: Then how did you meet at the zoo?

We didn’t meet at the zoo. We met in college.

You: But you said you met at the zoo.

We agreed to meet at the zoo, but the zoo is not where we met–originally.

You: Why didn’t you just say so?

I have no idea. My head hurts.

Anyway, we walked with our friends around the zoo with our respective young children in tow. Together, we enjoyed the weather, animals, and conversation. It was a wonderful afternoon. Suddenly, my friend commented, “Michael, you can always tell whoe the non-members of the zoo are.”

“How so?” I asked, quite curiously.

“By their stress level,” he replied. “They’re trying to see every exhibit before the zoo closes or their kids melt down. Non-members fly all the way from the zebras to the koala bears. They may slow down to see the giraffes along the way, but don’t think they the time to actually stop. Non-members are trying to get their money’s worth as quickly as possible.”

He’s right–I had been there.

You: Because you once lived at the zoo?

No!

You: Just kidding.

While joining a museum or zoo far from home will seldom make financial sense, joining local organizations can have enormous benefits–monetary and otherwise.

An example is my local children’s museum. Admission is $6.00 per person. Like most children’s museums, they also charge for kids. As such, when my wife and I took our oldest daughter, our total cost was $18. The first time we visited, we probably looked like the crazy zoo people my friend had described. Despite our toddler’s satisfaction from playing with shapes in the first room, we quickly moved her from one exhibit to another.[2]

Furthermore, at $18, it was pricey for only 45 minutes of entertainment before naptime. Consequently, we didn’t return to our children’s museum for a while after our initial visit. Several months later, my wife informed me she had purchased a family membership at the children’s museum.

You: So the person wearing the pants in your family is—

None of your business.[3] Since members can visit the museum at no additional charge, our $60 annual family membership means:

• We stress less during our visits. It doesn’t matter what our daughter does at the museum or if she’s totally disinterested in an exhibit where we had to plead with her to share the last time. Sometimes we arrive only an hour before the museum closes. Since we’re not trying to get our money’s worth out of every visit, each trip is a pleasure.
• We visit much more frequently. Instead of being concerned about the admission cost, membership means we go whenever we feel like it. We discovered the museum is a perfect rainy or cold day activity. Plus, it’s a great excuse to get out of the house and burn some toddler energy.
• We increase our tax deductions and lower the tax we owe, since a children’s museum membership is tax deductible. So our true cost to join was less than the $60 we paid.
• We support an important organization in our community. Members are the lifeblood of most non-profits.

For these reasons, we’re members of several similar local organizations. While memberships first appear to be expenses, they actually save us money and allow us to do more. That’s a fiscally responsible behavior. On the other hand, deciding never to do things solely because of money can make you feel cheap, if not downright unhappy.

I’m convinced my friend at the zoo had it right.

You: But you said you didn’t have a friend living at the zoo!

He doesn’t live there!

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[1] I realize some may interpret my use of “unfortunately” in the sentence above as written proof of my immaturity. I disagree. I see it as an explicit recognition of life’s tradeoffs. You can still make the “right” decisions yet be somewhat disappointed by what you feel compelled to give up. In conclusion, GO BLUE!

[2] Makes you wonder if a child’s attention span is really short because her brain isn’t fully developed or if other factors are at play.

[3] Or the subject of a future book. Stay tuned.