PARAKEET FUNERALS

A rather overweight single female came to stay for a week with my husband and me when we were struggling grad students. Being good hosts, we served her more and better food than we otherwise enjoyed. Our guest spent much of her stay telling us she wanted to lose weight and attract a husband. So we were amused that her parting advice to us, delivered with genuine concern, was "you two don't eat enough!"

Clearly, what our guest considered a normal diet was not one that would get her to her ideal weight. So, for her, a healthy diet created a sense of deprivation. She, like the rest of us, used her day-to-day experiences to distinguish between wants and needs and between what is too little and what is just enough.

But what if peoples' experiences set unrealistic norms? Americans in the 21st century are accustomed to consumption that cannot be sustained. Too many of us these days feel deprived with what we can buy when we live within our means.

Americans are quick to tell you they are short of money. Indeed this is the most common reason people give for not saving for retirement, buying health insurance, or making other prudent financial choices.

Are Americans in general short of money for basic needs? Not apparently.

Consider the following. One in four Americans gambled at a commercial casino in 2004 spending almost $30 billion. That number does not include gambling on Native American reservations or gambling online (both huge businesses).

Americans spend over $34 billion a year on pets, including liposuction, life-guarded pet swimming pools, organic pet food bakeries, plots in over 800 pet cemeteries (the majority, in some locations, enjoying weekly flower deliveries to individual graves), and custom-made parakeet caskets. Americans also tire of their pets and pay $1.4 billion a year to have them destroyed, 25% before the pets are two years old.

Americans will spend around $23 billion on digital TVs this year and similar sums on other electronics, including a delicious $3 billion on customized ring tones and the like. These purchases are being made in a country where nearly all households already have TVs.

Americans annually spend over $65 billion on illegal drugs, $45 billion on alcohol (college students alone spend $5.5 billion on alcohol) and $167 billion on smoking-attributable costs.

Americans spend $70 billion on weddings, $13 billion on chocolate, and around $10 billion on bottled water.

This consumption pattern is changing what Americans think of as normal. When I was growing up, weddings took place at church, and, no matter how much money the families had, the reception was in the church hall and offered wedding cake, nuts, mints and punch as refreshment. Now the average wedding costs over $26,000. Young people today would feel deprived having the kind of wedding that was the norm only a generation ago simply because what we are used to has changed so much.

The problem is that Americans are now used to spending more than they make. Over 70% of US households at the lower end of the income scale spend more than they make. That's right-over 70%. Even in the very highest income bracket-annual incomes over $118,800-more than 15% of households spend more than they make.

These are breathtaking statistics. They are even more alarming because Americans no longer have the same government or corporate safety nets to pay for their retirement and health needs. And the national debt is also huge. Over the next generation taxes will have to increase over 50% across the board just to maintain existing entitlement programs.

Why is this happening? It is not because human nature has changed-it hasn't. It is that we live in a time when it is easy, for the first time, for most people to separate consumption from payment on a massive scale. With credit easily available, people buy now, enjoy their purchases immediately, and don't think about payment until much later. Scientists studying human behavior tell us people will do this if given the chance, and they have been. Describing in economic or moralistic terms the future problems this behavior is creating is no match for the rush instant consumption produces.

So the question for policymakers is this: if one's life depended on helping people discover and adopt sustainable consumption habits, when exciting alternatives are easily available and highly popular, what would one do? That is, in my mind, the most interesting and most challenging question financial planning faces.

In response to an earlier editorial on a related subject, many financial planning professionals shared ideas on how to help deliver the information they have more effectively. CFP Board is looking to give grants to some individuals who are furthering the public interest in these ways.

But there is also another way to approach understanding this issue. And that is to seek individuals who have turned around their financial lives and ask them how they did it. Consumer Reports took a similar approach (in that case, to understand how people successfully controlled the urge to overeat) when it located and interviewed Americans who had lost weight and kept it off. The goal was to discover whether there were patterns among successful dieters that might help others lose weight. There were.

CFP Board is therefore seeking two things:

The first is the story of how you or any individuals you know have significantly improved a challenging personal financial situation, including a description of the factors that led to the success.

The second is information about any other entities collecting information like this or willing to help in CFP Board's effort.

Send your success stories (with contact information if you or the story's subject are interested in possibly being interviewed) or information about other organizations that are or might be interested in collecting such information to mail@CFPBoard.org.

Extra credit will be given for approaches that preserve society's ability to consume chocolate today and still save for retirement.

Sarah Ball Teslik

Application Deadline Approaching for 2006 Financial Planning Grants Program

The March 1, 2006, deadline for submitting applications for CFP Board's 2006 Financial Planning Grants program is fast approaching!

If you need funding for a distinct program that provides financial planning services or resources to non-traditional populations in a sustainable and innovative way, CFP Board is interested in hearing about it. For more information, visit CFP Board's Web site at www.CFP.net/teamup/grants.asp.

All grant applications must be submitted online, using the online grant application form at www.CFP.net/teamup/grants_app.asp, no later than March 1, 2006.

Continuing Education Reporting Update

The recent changes to CFP Board's continuing education (CE) reporting requirements have shifted the primary responsibility of reporting CE hours from the individual CFP® certificant to the CE sponsor. Many CFP certificants have already received evidence of this in their e-mail inboxes.

As CE sponsors provide CFP Board with electronic lists of CFP certificants who attend their programs, those attendees receive e-mail confirmation that the CE hours have been reported for them. The e-mail also contains a convenient tally of the total CE hours accumulated toward the individual's next renewal and notice of whether the required 2-hour program on CFP Board's Code of Ethics and Professional Responsibility and/or Financial Planning Practice Standards has been completed for the next renewal cycle.

CFP Board appreciates the great effort of the CE sponsors who are providing this reporting service to CFP certificants. In the first six weeks of 2006, CFP Board processed almost 900 electronic attendee lists - nearly 25% of the total number of lists processed during 2005. Among the CE sponsors who have reported in 2006 are 106 sponsors who submitted electronic lists to CFP Board for the first time.

Certificants can help make the electronic reporting process go smoothly by providing CE sponsors with all of the information required for electronic reporting:

• First and Last Name (as listed in CFP Board's records)
• CFP Board ID Number OR Last 4 Digits of Social Security Number

CFP Board ID numbers are printed on the ID cards CFP Board sends to individuals who attain or renew CFP certification. Bringing your CFP Board ID card to the location where you attend or complete CE programs is a good way to make sure you have the required information handy.

CFP certificants who are also CPAs will be happy to know that American Institute of Certified Public Accountants (AICPA) has now registered many CE programs with CFP Board. Lists of CE sponsors registered with CFP Board can be generated on our Web site at www.CFP.net/sponsors, with options for listing the programs registered by each sponsor.

CE sponsors can register programs with CFP Board at any time from our Web site. If you discover a favorite sponsor has not registered with CFP Board, please encourage the sponsor to visit CFP Board's Web site at www.CFP.net/teamup/ce.asp or e-mail us at cesponsor@CFPBoard.org for more information about the registration process.

Annual Meeting Update - Information Now Available Online

CFP Board is pleased to announce that preliminary information about CFP Board's 2006 Annual Meeting is now available online at www.CFP.net/annualmeeting.

Visit the Web site for up-to-date information about the speakers and events lined up for the different sections of the Annual Meeting. Information about hotels that have set aside room blocks for Annual Meeting attendees is also posted on the Web site at www.CFP.net/annualmeeting/logistics.asp.

Online registration will be available in the near future. To ensure you are one of the first to be notified when registration opens, send an e-mail with "Subscribe" in the subject line to annualmeeting@CFPBoard.org.

We hope you'll save the date and plan to join CFP Board this August in southern California.