Posted by Christopher Stevenson
While this post is not about the Apple iPad exactly, the big news from yesterday is the stimulus for my writing. I was a little amazed that the reaction to the price of Apple's newest gadget is so positive. A quick search for responses to the iPad gave me these quotes:
- "Okay, so investors have found something that excites them about Apple Inc.'s new iPad: The price."
- "The price: a bombshell rate of $499 for the base model with WiFi and 16GB; $599 for 32GB, $699 for 64 GB. Add $130 for 3G and the most expensive model is $829." (Italics are mine.)
- "Apple iPad Finally Unveiled and Quite Affordable."
- "At $499, it is definitely affordable."
Stop and think about it. These articles and others are saying that a median price of around $700 for a Web-surfing tool is affordable. Given, it's a slick platform, fun to look at and cool to use, but it's just another way to surf the Web--a giant mobile device. $700 isn't cheap. For an average middle-class family, it's a month's rent; a month's groceries; or two or three car payments. But what's communicated is that nearly anyone can afford the iPad.
This kind of response to the $500-800 price tag gave me flashbacks to the holiday season when every morning talkshow offered segments on "Great gifts for under $50 for all your family and friends." Really? With my wife, three kids, five siblings, in-laws, parents, nieces and nephews, 50 bucks per gift would throw me into debt so deep it would take me a year to dig out.
Consumers are innundated with benchmarks of what's affordable and what we should spend, and usually those benchmarks are set way too high. We've come to expect that luxury items, like that glorified mp3 player, should be in everyone's hands--even children's hands. Not everyone is so easily swayed by marketing or the coolness factor to spend money they don't have, but there are enough. If your credit union uses financial literacy as a means of engaging your members and serving your community, keep it in mind. Effective financial literacy education addresses more than behavior--keeping a budget, driving down debt, and balancing a checkbook--it addresses values and the participants' perception of money. Some say it can't be done, or at least not easily. I'm betting that it can.
