I recently attended a virtual conference sponsored by FERMA, which included dozens of sessions about topics of interest to personal finance educators and researchers. Below is a summary of new and/or useful information that caught my attention:
Fast Fashion- Key characteristics are short production and distribution lead times, highly fashionable product design through continuous trend spotting, and a sense of urgency and scarcity so consumers make frequent purchases. Also, decreased quality of clothing (e.g., fabric that does not launder well) and a “throw away” mentality among some Gen Zers, who do not want to be seen wearing the same clothes more than once in their social media posts.
Fast Fashion Retailing- Retailers that use a fast fashion business model include Zara, Shein, H&M, and Forever 21. Some retailers create “knock-off” clothing from popular fashion designers using artificial intelligence (AI) technology and fast fashion benefits from marketing by TikTok influencers. Downsides of fast fashion include wasted resources (i.e., having to constantly replace poor quality clothes), exploitation of low-wage workers to produce clothes, and an increase in discarded clothing sent to landfills, resulting in land and water degradation.
Estate Planning Issues- Power of Attorney (PoA) authority ceases upon the death of the person who granted it. PoA designees must be highly trustworthy people because they have the right to access bank accounts, sign contracts, and sell property. Certain government programs (e.g., Social Security, Veterans benefits, and U.S. railroad retirement board) require a representative payee, not a PoA. In real life, however, a lot of “informal money management” goes on.
Future Self- Whether they are 30, 50, or 70, people think of their future self as a totally different person than who they are now. Financial practitioners can help people align their future self and present self, break through limiting beliefs, and see that they, alone, are “the captain of their own life.” To move forward financially, people must break through their fears and focus on where they are, what they have control over, and where they want to go.
Shrinkflation and Skimpflation- Both are forms of inflation and often happen gradually and go unnoticed by consumers. With shrinkflation, the cost per ounce or pound increases because manufacturers keep prices the same but reduce package sizing or the amount of product placed in packages. Examples: 9.25 oz. of chips versus 9.75oz. (five fewer chips) or a large “dimple” in the bottom of a jar of peanut butter. Skimpflation is when companies spend less on materials (e.g., poor quality clothing fabric) or services so consumers get less for their money.
ChatGPT and AI- The AI platforms ChatGPT, Bing AI, and Google Bard are not fully reliable and can have incorrect output (called hallucinations) and biases. Thus, output should always be reviewed by a subject matter expert. Having said that, AI can write a letter better than many people and can be useful for “first drafts” of documents. Many ethical issues have arisen with AI use (e.g., term paper cheating) but it can never replace the “human element” in teaching.
This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.