Contributed by: Clare Lilek
I know what you’re thinking, how could the reality TV show The Bachelor teach me financial lessons? Well, dear reader, you will be surprised at what you can learn from other peoples’ misguided actions.
As of late, I have gotten into a new TV show. Ironically, one I thought I would never watch. Yup, you’ve guessed it: The Bachelor. I never really saw the point in the show—the excess drama, the crafted confessions and personas, and of course, all of this under the guise of finding “true love”—until I had a group of friends to watch the show with and debunk all the over-the-top drama. It actually can be fun and kind of engrossing. So, along with half of America, I resigned myself to having a guilty pleasure.
Recently, I came across an article, “25 Behind-The-Scene-Secrets about The Bachelor.” The title alone caught my eye. I knew it would be a little foray into the actual reality behind the “reality TV show.” Just like the appeal of tabloid magazines, getting behind the scenes gossip on The Bachelor, or any TV show obsession, is deeply satisfying. I, however, was most shocked by the reveal of the financial aspect of the show.
While watching with my friends, we frequently comment on the outfits of the female contestants because during every Rose Ceremony they are all dressed to impress in ensembles that can rival the most ostentatious red carpets. This could be their last chance to appeal to The Bachelor before he makes a final decision—aka their last time on TV—so they consistently look like an entire hair and makeup team, equipped with fashion expert, styled them. According to this article, that is false. These women, apart from the first and very last episode of the season, do all their own styling and have bought all their own clothes. Before coming on the season they have to prepare for 7 weeks of filming. If they are in it to win it, they have to buy gorgeous gowns and sassy dresses for 10 different rose ceremonies! Not to mention group and individual dates, making sure they look approachable yet at the same time like a glam team primped them before. Do you know how much time, effort, and most importantly, money that takes?! A lot. The answer is a lot.
How then, you might wonder, do these 20-somethings afford being on The Bachelor? First of all, it’s important to note that many of the contestants have to either quit their job or go on unpaid leave for two months. After which, the winner, might chose to move locations to be with her new beau. Many of the contestants, in order to foot the bill have reportedly either borrowed against or completely cashed in their 401(k)s. Apparently retirement savings can wait when you’re looking for love on national television. More contestants go into credit card debit to front the money that can’t be found in their savings account.
Let’s look at an example:
The average contestant could be a single woman, age 25, who earns $50,000 a year putting her in the 25% tax bracket. Let’s say she has about $10,000 in her 401(k). If she needs an influx in cash she has a few options: take out a personal loan, remortgage her home, max out her credit cards, borrow against her 401(k), or take a distribution from her 401(k) (essentially cashing it out). Taking out a distribution before you are 59.5 years of age means you have to pay a 10% penalty on that distribution on top of the income taxes for that money. So not only does this particular contestant not have savings for her eventual retirement or investments growing over time, she now has only $6,500 to spend on clothes, beauty products, and whatever else they need in order to find “true love.”
Now let’s look at the potential financial upside of being on The Bachelor, and no, this usually doesn’t come with benefits or a retirement plan. The contestants don’t get paid for going on the show, but when they arrive they receive a goody bag filled with clothes and beauty products. There is also the chance that the contestants fall into fortune after gaining fame from the show by endorsing products and the like. Also, The Bachelor gets paid a reported $100,000 and gets a lot of endorsement deals. So along with getting an expensive Neil Lane diamond engagement ring (which after two years of being together, the couple can cash in with written producer approval— “cha-ching”), winning the show might mean you fall into quite a bit of money.
Of course, not every woman can (or would!) trade in her 401(k)s for a chance at landing a fiancé. But the next time you’re watching The Bachelor (or thinking about applying yourself) remember the money and tough choices it takes to get there. I guess the reality behind reality TV is a lot less glamorous than you might think.
Clare Lilek is a Challenge Detroit Fellow / Client Service Associate at Center for Financial Planning, Inc.
Any opinions are those of Clare Lilek and not necessarily those of Raymond James.
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