January 11, 2003

What It Really Costs ...
By Marcel Chartier 

You walk into the store with a wad of money, or plastic, and lay that money down for the latest gadget or style. You worked hard for that money, and darn it, you deserve a reward. But at what cost ? Everything you buy has a hidden cost, and not necessarily at the till, but before you walked into the store - you are buying with after tax income. So, that $100.00 item really cost you between $120-140, before taxes. How many hours did you have to work for that - make $20 an hour? Worked almost a full day to buy that - is it still worth it?

Think about what you buy in relation to how long did you work to get it. Want a big screen TV at $2,999 ? That’s $3418.86 after taxes (where I live), at $20 and hour, that’s almost 171 hours of work. That’s over month of work. At a $10.00 an hour wage it is over two months of work. If someone said to you - if you want that TV you have to work for me for one month, how about two months, how would you react?

Where most people go wrong is not with the big items but the numerous small “useless” items we buy (check out the closets or garages of North Americans). Marketers know that we look at an $19.99 item and go,” well that isn’t too expensive, I can afford that, its only $20.00.” This is especially true for items that are time dated such as clothes, or items that are faddish and trend oriented. Any wonder that most pre-teen and teen oriented items are placed at a lower price point, CD’s, food - the purchases are smaller, more frequent, and associated with impulsive “quick pleasure”. Good consumer training.

We are conditioned to buy often and impulsively. This is why budget minded people make lists, because it stops the impulsive non-required items.

You work, you deserve it?

What’s work for if you can‘t enjoy your money?

You could die tomorrow, if you can afford it, buy it today, why wait?

Anyone said these phrases to you? Said them to yourself? We probably all have as they help justify buying now. Unfortunately, these phrases are incomplete, they forget to ask if it is the right thing to do for you considering your financial circumstances. If you are on minimum wage buying that big screen TV has probably just indebted you for years. Like you deserve that ! You deserve more.

So, how much does it really cost to you ....