One of the facts often overlooked when discussing how affordable housing is or not is that the new home we buy today is so much more than what it once was. It’s not that the American Dream is that much less attainable today, but that the dream itself is much larger.

According to the National Association of Homebuilders Housing Facts, Figures, and Trends from March 2006, the average size of a new single-family home more than doubled from 1950 to 2004. Average square footages were as follows:

Year	Sq Ft.
1950	983
1970	1,500
1990 	2,080
2004	2,349

Some of the growth, such as having more than one bathroom, seems reasonable. Much of it speaks to the excess we have all become accustomed to. In the Brady Bunch, 6 children shared two bedrooms and one bathroom. Such a situation would be unthinkable in many households today. It isn’t just that buyers have higher expectations of what their homes should include. Builders know that larger homes will fetch higher prices and will likely be more profitable. Building a new home to 1950s specifications wouldn’t be as wise today.

Location still plays a role in the prices we expect to pay. I remember when I first moved to the Midwest, one of my neighbors lamented about the high cost of housing. She was upset because things had gotten so expensive that a person could

"barely buy a starter home for less than $70,000 anymore."

I didn’t have the heart to tell her how easy she had it. Where I had lived on the East Coast, you’d have a hard time finding a starter home for less than $300,000.

One of the reasons people put less money down when purchasing a home is that home prices, even with a cooling housing market, are still quite high. As a result, they end up borrowing more money to purchase their homes. Higher expectations for home size and amenities, along with a lack of new homes with only the bare necessities, are pricing many families out of the new American Dream. Unless we can get past the new perceptions of necessity and are willing to consider more affordable, smaller, or older homes, the dream of home ownership may remain out of reach.

One of the main problems with financial advice is that it is often incomplete or too generic for our own personal situation. Learning to recognize that information may be missing from financial advice can help us to get more value from what is provided.

Following directions reminds me of a lesson used to teach young children about how to program a computer. The teacher, acting as a computer, asks the children how to make a peanut butter and jelly sandwich. After the typical response to put peanut butter on the bread, the teacher places the jar of peanut butter on the bag of bread, much to the chagrin of the students. In time, they learn that to successfully program a computer they must make clear, unambiguous, and sequential instructions.

Without trying to negatively correlate the human mind to that “dumb” computer, we can still take something from the lesson. A piece of financial advice is only as good as its completeness and applicability to our situation. Expanding and customizing generalized advice is the best way to take value from it.

Taking an example that is often cited throughout the personal finance realm, including here on the Lending Club blog, let’s consider the advice to consolidate credit card debt. Those four words are powerful, but without taking many steps, they will not be effective. While it can safely be assumed that some readers understand all of the necessary steps, many may not. Expanding on the idea might yield a more accurate plan:

1. Determine the interest rates that you are currently paying.
2. Calculate the total amount of debt that you are trying to consolidate.
3. Obtain a loan for a lower interest rate than you are paying in the amount of your total debt.
4. Use the proceeds of the loan to pay off all of your debt.
5. Do not use the credit available on the debt that you have paid off.
6. Pay off your consolidation loan on time.

As you can imagine, listing all of those steps every time someone wanted to tout the virtues of consolidation would be cumbersome. Still, the four-word summary, consolidate credit card debt, may cause certain steps to be forgotten. I could probably expand my list to be even more specific. What you realize is that omitting one of the implied steps, such as not using the credit available on the debt you have paid off, can make sound financial advice rather poor.

With the wide array of people’s potential financial situations, no generalized advice is going to be applicable to every situation. Understanding that limitation, modifying advice as appropriate, and filling in the gaps will allow us to maximize the value of the advice we encounter.

Acceptance speech:

The value we associate with products and services comes from conflicting sources. While we may strive to get the most possible value for our money, on another level we think less of products we pay less for.

I’ve been reading Dan Ariely’s interesting book on behavioral economics titled Predictably Irrational. If anyone is interested, I’ll be giving away my copy when I’m finished with it. One of the chapters discusses the power of price on enjoyment. He discusses how the perception of quality in higher priced products leads to more enjoyment, if only through a placebo effect. This trend isn’t only evident when comparing name brands to generics, but also when comparing a product at regular price versus a discounted one. This means that while we might be delighted to get a great deal on a product or service, our enjoyment of using it may be less than if we had paid full price.

This conclusion, like most of those in his book, is backed by scientific and experimental research and is highly counter-intuitive. From medicine to energy drinks, the author’s studies consistently found higher priced products to be more effective. For someone with a personal finance obsession like me, I would like to think that I get more pleasure when I spend less, but I fear that may not always be the case.

The pleasure we derive from a product or service is a complicated mix of many factors. Whether cost or perceived value weighs more heavily in the equation likely depends on your mindset. Being cognizant of a price’s potential to influence perceived enjoyment may help to lessen the effect. From a purely financial perspective, I would certainly hope that I could convince myself to enjoy a product the most when I had paid the least to obtain it.

Just as entering college can be a time for making smart financial choices, leaving it is one too, and doing so with a smile on one's face and one's chin held high certainly doesn't hurt. In that spirit, here are my picks for the 7 best funny and/or inspirational graduation speeches of the past decade.

Conan at Harvard

Very Funny

Right off the bat Conan is absolutely hilarious. Pure genius.

This is the gold-standard of funny graduation speeches at Harvard in 2000.

Bill Gates at Harvard

Funny/Inspirational

This is surprisingly funny, especially Part I which really shows the human side of Gates.

"...how those discoveries are applied to reduce inequity"

Part II, Part III, Part IV, Part V

"Last Lecture" professor Randy Pausch at Carnegie Mellon

Inspirational

Short, concise and brilliantly moving. May 2008.

"We don't beat the reaper by living longer. We beat the reaper by living well."

JK Rowling at Harvard

Funny/Inspirational

Harvard gets all the best speakers. JKR delivers a steady stream of laughs, poking fun at the Harry Potter Universe. Yet her sincere stories of pain and hardship pull at your heartstrings in an incredibly eloquent way. June 2008.

5:40 - "Poverty is only romanticized by fools"

I found Part I moved along more than the second half of the speech (Part II here), but overall the speech was very inspiring.

Conan at Private HS (2006)

Funny

I wish Conan had spoke at my high school... Again, Conan = Brilliant.

Part II is here....

Pokémon HS Commencement Speech

Funny

This kid may be a complete nerd, but at least he's got some creativity...

Colbert on Credit Cards

Funny/Serious

Colbert gives some great advice about pre-approved credit cards after a minute or two of serious, good advice.

Sadly, only Part 3 of this speech could be located. If you have a link to a working Part I and II, do share! We all need more truthiness in our lives!