Money Rehab with Nicole Lapin - The Coronation: Good for Business or Royal Pain?

Episode Date: May 5, 2023

Experts project that the coronation of King Charles III will cost British taxpayers at least £100 million pounds. So the big question is: what’s the ROI? Will the coronation help or hurt the British economy? Nicole digs into both sides of the argument, and ultimately, gives some advice to the crown (you're welcome!). Find the Money Rehab episode with The Points Guy here: https://link.chtbl.com/fzsjTmwG Check out the articles referenced in today's ep: https://www.cbsnews.com/news/coronation-king-charles-travel-london-cost/ https://time.com/6275383/king-charles-iii-coronation-cost-taxpayers/

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Tomorrow, the coronation celebration of King Charles, the late Queen Elizabeth II's son, kicks off. The coronation is a three-day affair that is literally fit for a king, with a 2,000-person invite-only ceremony and a lot of other festivities all throughout the country, including cake competitions, dog shows, horse and carriage rides, musical performances, special tours of royal landmarks, and more. If you're thinking, damn, that sounds expensive, you are totally right. Experts project that this three-day party

will cost British taxpayers at least 100 million pounds, which translates to us in America as about equivalent to 125 million dollars. This is a considerably bigger banger than the last coronation in Britain, the coronation of Queen Elizabeth II, and that cost £54 million. And yes, that is adjusted for inflation. I will note that the £100 million figure is just an estimate by experts, and the monarchy has not confirmed this figure despite many requests from the press. But exact numbers aside, it's clear that this weekend is going to be an expensive one for taxpayers. So the question is, what is the ROI here? Will the coronation help or hurt the British people?

I have always got my mind on my money and my money on my mind. But more people are nerding out with me on this particular question because the British people are suffering a cost of living crisis, which has been triggered mostly by extreme inflation. Britain currently has the undesirable award of the highest rate of inflation in Western Europe. And according to the New York Times, food prices in Britain are 20 percent higher than they were just a year ago. This is an issue that is very much at the forefront of the collective consciousness in Britain. As Yasmin Sarin reports in Time, in recent months, doctors, teachers, train drivers, traffic wardens, and Heathrow airport workers have been striking

in Britain for better pay. So it's not a great look for the British government to be sending taxpayers a huge bill while those very same people are crying for help. However, it is not the case that the British people are unanimously anti-coronation. The relationship between the British people and the crown is not that simple. It is not breaking news that there's a healthy group in Britain that still feels so much pride and positive sentiments toward the crown. According to an annual study on British attitudes toward the monarchy done by the National Center for Social Research in 2021, 31% of British people felt that the monarchy was very important, and 24% said that

they thought the monarchy was quite important. Quick side note here, how British are these metrics? I really got a kick out of the fact that the multiple choice responses are very important and another is quite important. I can practically hear the British accent through the survey and I'm not quite sure the difference in degrees of importance, but I digress. So anyway, the people who think the monarchy is quite or very important would probably also say that a coronation is good for the nation's psyche. Plus, the last coronation, Queen Elizabeth's coronation, was in 1953. So for most millennial Brits, this will be the first coronation they will get to experience. Plus, the benefits of the coronation aren't only warm and fuzzy. There's a

lot of financial benefit to a coronation, too. The coronation will attract a lot of tourism to England and therefore infuse the country with international money. CBS has great data on this, but the highlights are that the coronation is driving a 64% increase in hotel reservations in London and a 73% increase in train tickets to London from other parts of Europe. Also a 40% increase in searches for flights from the US to London. This influx of tourists is expected to bring in a lot of cash. According to the New York Times, it's expected that during this three-day period, more than 130 million pounds will be spent on food, 245 million pounds will be spent on souvenirs, 350 million pounds will be brought in by businesses like hotels and pubs. And if you run a pub in London, by the way, rest up tonight because it's expected that 17 million extra pints

will be poured across the country this weekend. So going back to my question on ROI, you could say that the government is spending 100 million pounds to make 725 million pounds. That's an amazing ROI. That's more than 7x. But that is not a totally legit way to think about it. Because again, we have to think of the coordination as being funded by the taxpayers. And it's not like every taxpayer in England is going to get a cut from a £725 million check, right? And the government itself isn't getting a £725 million check either. If you're the owner of a restaurant or hotel or tour company, great, you're going to have a super sweet payday. But if you work at a restaurant or hotel or tour company in London, you're probably not going to get any bonus from this weekend. Some people view the coronation as a longer-term opportunity. Leaders in the

travel industry, for example, hope that the coronation will help invigorate London's tourism scene, which hasn't fully recovered since travel restrictions during COVID. But most experts predict that this one weekend isn't going to have dramatic effects on the nation's economy as a whole. And so there's a vocal group of economists and British residents who are arguing this money should instead go to alleviating the cost of living crisis, like strategic investments in health, education, and infrastructure, and a coronation falls into exactly none of those departments. So the coronation is happening tomorrow, there is no doubt about that. But as a thought experiment,

is there a compromise that could satisfy the group of people who want to celebrate the coronation and the group of people who think it is too expensive for taxpayers? Well, one solution might be to have the coronation, but not to have the government fund it. Going back to that Time article I referenced, a recent survey found that 51% of British people believe that the coronation shouldn't be funded by the government. So if not the government, then who should pay for it? One option would be for the monarchy to pay for it. Yes, yes, I know that they are partially funded by taxpayers, but not entirely. They definitely have some personal money to play with. A recent investigation by The Guardian put King Charles' personal fortune at an estimated 1.8 billion pounds. So yes, he should pay for his own party. If you're going to have a big ol' fancy party,

you don't expect your friends to foot the bill, do you? Another way would be to fund it the way the U.S. funds inaugurations. Because while the British monarchy and the U.S. presidency are very different institutions, both love the pomp and circumstance of a launch party. For the presidential inauguration in the U.S., a committee is formed and raises money from donors. Now, U.S. citizens are on the hook for some of these costs, too. The actual swearing-in ceremony and associated costs are funded by taxpayer dollars. But the galas, the parades, and other events outside the ceremony itself are privately funded. President Trump actually broke the record in 2017 for the largest sum ever raised by an inauguration committee, a whopping $107 million. How those funds were then used has been under investigation, but that's a story for another time.

So ten minutes later, I think my recommendation to the British monarchy would be, go splitsies, come up with a committee, get rich donors who love a good coronation to fund some of it, and then, King Charles, pay for your own quite important party. For today's tip, you can take straight to the bank. If you're a royal fanatic and spent those surge prices to fly to London this weekend, I hope you used a credit card and then, of pay it off in full because you often get a lot of insurance and international protections you might not realize. So before you hop across the pond, or anywhere internationally for that matter, check out

what hookups you get from the credit card company. Brian Kelly, aka The Points Guy, was on the show with some genius hacks for this. And he also told us about his own experience getting a private plane paid for by a card company because of his own international travel snafu. Yep, I've linked that episode in the show notes. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200,

or getting paid up to two days early with direct deposit. Learn more at Chime.com. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply.

Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com

to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.