I’ve referenced this before, but I’ve been thinking a lot lately about the true cost of things. We tend to think of costs in terms of the sticker price. What does it cost us to buy up front? Beyond that, we tend to only think of the cost in dollars. We don’t see all the hidden costs.
Sometimes those costs are additional monetary costs, but more often than not, they’re something else. Usually, it’s time. I’ve been living in my parents’ house for the last month or so. It’s a beautiful house, but living in it has made me come to see that a home is a great example of something that a lot of people overvalue.
Lots of studies show that people who live close to their work are happier. Yet, many people go buy big houses in the suburbs. They don’t realize the costs. They think of the benefits. “Oh, this guest room will be nice when the in-laws visit” or “Look how big the yard is.” Would you trade an hour of your day, 5 days a week for a bigger lawn? Maybe you would, but I bet a lot of people aren’t conscious of that when they make that decision.
So, now you’ve got your big house in the suburbs. Your mortage is the same as you would be paying in rent for a smaller place downtown. You feel pretty financially savvy. Then the air conditioner brakes. Now it’s your problem, not the landlords. You pay to get it fixed and spend 2 hours dealing with the repairman. Your commute is twenty minutes longer each way. That’s 4:20 over the course of a week. Plus gas. Plus depreciation on the car.
I’m willing to bet there’s more there, but I don’t know a lot about being a homeowner. My point is that if the price for houses said: $150,000 plus transportations plus 2 years of your life in maintenance and commuting costs, people would think differently about it.
Time is almost always the biggest hidden cost. The more I think about it, the more I’ve come to believe that time is really all we have. What’s a job? It’s a trade: Your time for their money.
My time is the most valuable thing I have. The more I analyze my life, the more I’m looking to maximize my time. Less stuff means less maintenance which means more time. Better health means living longer and more energy. That gives me more time.
Do I think sports cars are badass? Yes. Are the associated costs worth it? Not to me. That’s just me though, maybe it is for someone else. I don’t know. Before you buy something though, try and think about the true costs. Think about what you’re really giving up, not just what the tag says.