Have you ever bought something that has turned out to be a black hole of money? Despite having bought it a long time ago, you still need to spend and spend on it?
For some reason, when we want to buy something we see the purchase price as our final expense on that thing. But there are many other hidden expenses.
Two of our worst holes are hobbies and travel. Which is even worse as we don’t “need” to spend on them, but we choose to.
Hobbies, where is the limit?
Hobbies, like collections, have the problem that you are never done spending on them. Especially if the initial expense is already high.
For example, Mrs. Lyn likes photography (the pic of the boat above is hers). There is not really a maximum amount you can spend is that. You buy the camera, which can already be several thousand euros. But the hard part comes later. The more you know about photography the more you realize the limitations you have due to your equipment. Lenses, filters, tripod, etc. etc. Now you have many accessories, so you will have to buy a cool bag to take them with you. This is a squared black hole of money: because you spent on accessories now you have to spend on a bag. And then a new technology will come out, you will need a GoPro to take when you hike, editing software … Where do you put the limit?
Because you spent on accessories now you have to spend on a bag
I like to make beer and I’ve always used very basic systems. But many times I’ve been tempted to buy gadgets: wooden barrels, kegs, temperature-controlled fermenters, automated systems, etc.
Another thing about making beer is that your cost per liter is reduced the more you do. This is clear for everybody in this hobby. It is also a typical reasoning for upgrading your equipment and make batches that are twice as big. However, what we tend to “forget” is that the total cost increases the more beer you make.
- 100 grams of a type of hop can cost 11 euros (0.11 euros / gram),
- 500 grams of the same hops can cost 45 euros (0.09 euros / gram).
So you save 18% buying 500 grams. But you are also spending 34 euros more. In fact, if you do not use 100 grams of the 500 (because you want to use other hops) you have almost lost what you would have saved.
You can replicate this with other ingredients, yeasts, sterilizers, etc. In the end, you will end up buying containers to keep all this, making beer only to use the ingredients you already have, buying new equipment to be able to make more liters and all kinds of nonsense that translates into more spending. And it all started when you wanted to save 18%.
Travel, the syndrome of “since we are here”
Maybe the thing we get wrong the most. We see flights sooo cheap … and buy them. Then it turns out that just transportation to and from the airport is already more expensive than the flights. But not only that, the biggest problem is the “we are here so…”. When you are visiting virtually any place and you think “we are here so… [insert any activity that seems that you won’t be able to do again in your life]“.
Whenever I catch myself thinking “we are here so…“, I stop and think. Is it really what I want to do? They happen to always be things that are not planned and they are usually expensive. When we went to New York we didn’t say “We are here so… let’s go to a Broadway show” because we knew we would go and have budgeted for it. However, when we were in the line to buy the tickets we saw groups of tourists walking around, hesitating and ending up buying tickets because “it’s one of those things you have to do“.
Avoiding black holes of money
We had to learn the hard way … but now we try to think about the total cost before buying. When we see a very cheap flight, we look at how much the accommodation, activities, restaurants, etc. would cost us. This works for us because seeing the full cost allow us to make better decisions. Sometimes we still end up making mistakes because we didn’t consider some hidden expenses.
There are also many hobbies and cheap trips that you can enjoy even more than the expensive ones. For example, we are now visiting places that we can reach in 2 or 3 hours by car.
What is your worst black hole of money? Houses? Car? Travels?
Photo: Takoradee, Mrs. Lyn.