July 29, 2013

Ongoing costs SHOULD play a big part in deciding whether to buy some item or service. Why?

2 thoughts on “July 29, 2013”

  1. Katherine Graham says:

    Ongoing costs should play a big part in deciding whether to buy some item or service for the same reason you should look at a vehicle purchase as the total amount of money you owe on it instead of just the monthly payment; so you know just how much debt you are assuming.

  2. Mike Finley says:

    Nicely put, Katherine. Let me add to your comments. Let’s take a look at the purchase of a dog. Fido could be given to you or you may pay for someone for the always cheerful puppy. That is your initial cost, but far from your total cost of having a dog in your life.

    Fido will require plenty of care as time goes on. You may feed him. You must take him to the veterinarian on occasion to get checked out and pick up some shots. You always have to fix or replace some of the property that he damages. This could be a little or a lot based on the type of dog you acquire. All of this adds up, but it is not so easy seeing that when you first buy the dog.

    Now, I am not bashing owning a dog. I love dogs just as much as the next person, BUT you must ask yourself: can I afford him. Here are a few things that tell you, you can’t.

    You have no emergency fund. You have high interest debt on a credit card that you cannot pay off each month. You are living paycheck to paycheck and saving no money. You cannot afford to invest into your company retirement plan. This could go on, but I hope you see my point. Fido brings plenty of costs with him. Consider this point before picking him up. That point also goes with an automobile, clothing, furniture, vacations, a job (requirements that force you to spend plenty on “looking the part”), and all those big boy toys and fun stuff (motorcycles, jet skis, boats, lawn mowers, golf clubs, etc.). Think before you buy!

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