These Expenses Will Come Back to Bite You

In Roots of Personal Finance, our online course and membership site, I teach our members to wait 24 hours, and even up to 30 days when considering a purchase. Why? In most cases, the stuff you think you need is only a WANT, and when you allow your emotions and the urge to buy to die down a bit, it's amazing how much crap you won’t buy. Our members have even come up with a funny saying to remind themselves of this lesson: “What would Brad do?” 

I want to talk about some other expenses you should consider when making a purchase—the primary expense, which is the main item, and the secondary expense, which are smaller purchases that add value to the main purchase.

For instance, you might need a new outfit for a special event. A dress or a suit is the primary expense, but then those secondary expenses come into play, such as shoes, jewelry, handbags, a mani/pedi, and the list goes on.

My wife and I bought a used, pop-up camper this past spring. I love to camp and had to put it on hold for many years while I got out of debt. Now that I'm free of debt, I wanted to get back out into the woods. We bought a gently used camper and got a smoking deal on it. However, there were secondary expenses like camping equipment, insurance, maintenance and repairs, camping fees, firewood, fuel, etc. We considered all of these expenses before we bought the camper to make sure we could actually afford to camp.

Secondary expenses come into play for big items, too. Let’s look at buying a home. So many people get wrapped up in the main purchase of the home, and they should to some degree. A home is a tremendous responsibility and, for many of us, the largest investment we will ever make. But owning a home costs way more money than just the home itself. There are secondary expenses to consider like:

• Furniture
• Appliances
• Maintenance (1%-2% annually of the home's value)
• Landscaping
• Insurance
• Property taxes
• Utilities

Buying stuff that brings value to your life is fun. You should enjoy your money, but be sure to weigh the secondary expenses as much as you do the primary expenses when considering future purchases. All too often, I coach individuals who get bit hard by these expenses because they didn’t take the time to consider the primary purchase and what it would cost to own it.