Buying a Prom Dress
Looking Hot and Being Smart About it
Your folks said, "We'll pay half." And you think, "Jackpot." Since your parents are taking on some of the cost, you can get an even nicer prom dress than you thought you could afford.
Anyway, you find a dress with a price tag of $350. Sleek stuff. Shiny stuff. Fits perfect. Makes you look like Jennifer Lawrence stepping out of the limo on Oscar night.
Trick question: What's the cost of the dress?
The price tag is $350. Is that the cost? Well, there's a $10 fitting charge and then sales tax. So the total, actual price was $400. Your parents pony up their $200, and you have a stack of bills tallying up to $200 because you took all those extra shifts at the bookstore.
So is the cost to you $200?
Well, that's only part of the story.
You wear the dress and have an awesome time at prom. That is, until about midnight when Johnny throws up all over you. He hadn't even been drinking; he just gets really queasy when he dances.
So the dress cost $400, but now that you've actually used it, we can say it had value for you. You wore it for 8 hours total, and you'll never wear it again. You can't let your friends see you in the same dress, and you can't exactly wear it to study chem in the library anyway.
If you look at it that way, it cost…50 bucks an hour. Almost a buck a minute.
Worth it? Depends on how good you looked, we guess.
And, by the way, to give fair accounting math here, you'd look at a "residual value" of the dress. That's the value still left in the dress. See, as soon as you carried it home, cut off all the tags and wore it, it was no longer worth $350. The same dress in the store costs $350, but used stuff depreciates in value as soon as it's, well, used.
In other words, if you decide put it on eBay and sell it, you'll only get a fraction of the price back, no matter how good a job your parents' dry-cleaner did with the thing. Used prom dresses aren't a big category. Especially those that have been puked upon.
But you're going to love telling the grandkids about your amazing prom someday, and you'll be able to show off your pictures of the pre-puked on dress you wore.
We hope so. That'll mean you got some good value out of your cash.