The Hidden Cost of Everything

 

[image error]We all know what we pay for things — the price tag says so!  But what we spend at check-out is not really the true cost of ownership.

From groceries to appliances to clothing — not to mention cars, electronics and even second homes — the amount you’ll spend fueling, installing, protecting, cleaning, repairing, storing or even adding accessories to your new purchase will only be compounded over the lifespan of your new item.

Here’s a breakdown of a few common household purchases, big and small, that add up over time:

Pets  

According to Mint.com, the cost of owning a dog is roughly $580 to $875 a year, a cat is about $670, and even fish cost at least $35 a year. This doesn’t include one-time expenditures such as your pet’s shelter (kennel, aquarium, etc), collars/leashes, or get this — destruction costs, like when your pet rabbit chews through her 12th extension cord or when Fido failed to get the memo that your favorite recliner is a “off-limits.”.  Many cats and dogs can live 20 years or more so, factor this into your finances before you take on pet ownership.

Cars

Just because you have enough in the bank to buy a new or used car doesn’t mean you can afford the expense of insurance, license plates, registration fees, and, of course, all the gas and maintenance your car will require. In addition, the type of car you purchase can directly influence costs of ownership. In other words, the used, gas-guzzling SUV you got at a bargain may end up costing you more in the long run than a new car getting better gas mileage.

Clothes

You may not think your wardrobe has hidden costs but when you consider that, according to Proctor & Gamble, women spend on average $1500 on dry cleaning alone – you may want to check care labels before check out.  That said, being frugal with your fashion has its financial consequences since poor quality clothes will need to get replaced more often than higher-quality threads.

Credit

When you use your credit card at the register, on top of the considerations listed above, you’re also incurring interest fees ranging on average from 10-23%. Carrying balances each month most certainly increases the total cost of ownership of whatever it is you just bought, so before reaching for your credit card, consider the long-term impact to your finances.

Finally, a parting thought for those of us knick-knack lovers, pack rats and collectors: when you accumulate a lot of stuff, you have no choice but to house and store it all.  Could that mean that you one day need an additional storage unit, or even a bigger home, to contain it all?  (The U.S. self storage industry raked in more than $22 billion in sales last year, FYI)  There’s even costs associated with disposing of that stuff so no matter what, make each new purchase with a plan in mind for paying for it – today and in the future.

Photo courtesy of Fotolog, Inc.