Frugal Friday Back to School Edition

As we all know, the frugalosphere is a seasonal beast. August brought, of course, the usual spate of back to school tips. Most were obvious and ordinary, although Coupon Shoebox did suggest that “If your child is old enough to be earning some money, or if you provide an allowance, you can consider letting him or her buy one or two supplies.” They will thank you someday.

Also possibly seasonal, perhaps brought on by the high temperatures that put us all in thrift store shorts and tank tops, was more than the usual amount of discussion of the intersection of frugality and weight loss.

Wise Bread explained Why Going to the Gym Is a Waste of Money, Time, and Resources by disclosing the little known fact that exercise does not help you lose weight. They cite an article in Time which uses “solid-sounding research and academic experts.” This is good news for the frugal, who need no longer struggle with the conflict between the desire to sweat through “no pain no gain” at the gym and the desire to sacrifice the monthly expense of a membership.

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On Money and Psychology

[Today’s Thursday re-run first appeared June 15, 2009.]

One of several recurring sub-themes here at Bad Money Advice is that some givers of personal finance advice, particularly the mass market gurus, say things that can only be justified assuming an irrational audience incapable of acting in their own best interest.

So, for example, when Suze Orman tells her readers that they should absolutely never borrow from their 401k account to pay off a credit card balance, I give her a hard time for giving terrible advice based on the assumption that her audience has no willpower and will merely run up the credit card balance again.

But when I criticize the gurus for giving bad money advice that is, in fact, bad psychotherapy, I do not mean that everybody ought to be able to behave in a perfectly rational manner around money. Quite the opposite. We are all merely human, not uber-logical Vulcans. We act sub-optimally around money (and everything else) for a variety of emotional and behavioral reasons.

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Summer Housing Anxiety

Late August had more angst and gloom about the housing market than usual. Had I been blogging last week, I would have written about it on the last Wednesday of the month, my usual housing market slot. (The Case-Shiller Index numbers come out on the last Tuesday.)

The proximate cause of the wave of pessimism were two reports on the low levels of house sales in July. The National Association of Realtors revealed that existing home sales were down 27% in July from June. And sales of newly constructed houses fell 12.4% to a new all-time low.

The New York Times reported this with the headline Housing Market Plunged in July, Fueling Anxiety. Anxiety may indeed be being fueled, but the housing market, at least the one most of us care about, did not, as far as we know, plunge in July.

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Labor Day Stock Market Thoughts

Labor Day Weekend is prime time for big-picture discussions in the financial press. With the cultural end of summer, and the heightened feeling of seriousness of the back-to-school and back-to-work season, Labor Day is a good time to review where we are and where we are going. Also, articles on broad topics can be written far in advance so that journalists can take the weekend, or entire week, off.

Thus, The Wall Street Journal recently treated us to a spate of pieces on basically the same topic, the wisdom of investing in the stock market.

Brett Arends kicked off this festival of tea leaf reading mid-week with Why Stocks Still Aren’t Cheap. Then over the weekend we got Is It Time to Scrap the Fusty Old P/E Ratio?, covering some of the same ground as Arends but with a less bearish spin, and Thinking Outside the Stocks, discussing off-beat non-stock investments.

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