Girl Math: Bonds Edition
It's 2024, so we can't have a blog post about finance without talking about the hottest financial craze: Girl Math. For those who have yet to hear, Girl Math is a tongue-in-cheek method for financially analyzing purchase options and future values of money that uses cognitive gymnastics to make the preferred purchase decision look financially responsible. If you want to learn more, you can read about it here. An example of girl math is that if I return $100 of Amazon purchases, that means I now have $100 "to spend" on new throw pillows for the house! Girl Math!
This blog post is part satire, part math. It's math-tire.
Is it possible, though, that Girl Math might sometimes be right? Today I'm valuing a boring, respectable purchase of a Series EE Government Bond against what I actually want to buy: several new outfits from Ann Taylor for work. Let's dive in.
The current Series EE Bonds from Treasury Direct promise to double any investment over $25 in 20 years and currently hold a 2.70% interest rate. They have a promised future value but no coupon payments. Let's say I want to spend about $250 at Ann Taylor on three new pairs of pants and a shirt. So, I'll use $250 as my investment amount for the EE Bond. Below is a calculation of the present value of that bond, which as shown below is $293.47, more than the $250 I would pay today.
Now let's compare the value of the outfits in question using Girl Math. My cart total is about $250, but that includes a discount coupon, so the actual value of the cart total is about $385. Right off the bat, you can see I've made $135, without any time investment.
But let's dig deeper. According to Forbes, being in the top third of physical attractiveness at work (that includes weight, clothing, makeup, etc.) is associated with being paid 10% more. This is particularly important for women, who still struggle to be seen as competent leaders in the male-dominated workspace.
Based on an online discussion on Reddit.com, trousers likely last about three to five years each, depending on how frequently they are worn. So, let's assume I'll keep these outfits for five years. I'll also assume these particular trousers only contribute to my physical attractiveness at work to a degree. Let's say these particular trousers are contributing 15% of my attractiveness. So, at the end of five years, they will have contributed towards 15% of a 10% salary raise. Assuming my salary is 10% higher at the end of the five years, what is the present value of this purchase? To make this analysis applicable to most women, I've used the median salary for women in 2024 at age 35, sourced from Forbes. Below are the calculations.
The analysis above shows that the present value of this purchase is $759.18, much higher than the cart total of $250, and much higher than the Series EE Bond present value. And that's before we consider that at full price, these purchases would cost $385.
In conclusion, the most financially responsible thing I can do is complete my purchase at Ann Taylor, making an investment in myself and capitalizing on the fact that work performance, especially for women, is not the only contributing factor to success at work.
***My husband requested that I note in this blog that he formally objects to the above analysis and conclusions, and asks that I refrain from further calculations until he can form a dissenting analysis***
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