9 Things Costing Surprisingly More Than You Thought

The cost of everyday things aren’t always what they seem. While some things start out looking like a good deal, owning them can cost more than we bargained for.

Here are some common things from everyday life which probably cost more than you thought.

1. Smartphone

What you think you’re getting: A $200 phone.

What you’re actually getting: A contract for $2,000 worth of service.

Smartphones feel like a necessity for many of us and can seem like a reasonable value for this amazing piece of technology. While the purchase of a phone might seem a major cost, it’s actually everything else that adds up to much more. Voice and data plans alone can exceed $100 per month.

That’s before adding accessories, insurance, and app downloads.

Don’t forget: You’re typically locked into a 2-year contract, so your smartphone costs can exceed $2,000 over this period.

A smartphone is becoming more and more commonplace, but you need to add up the costs of:

• the multi-year contract, if there is one
• going over on minutes, data, or other
• getting locked in because of an entry price
• costs of replacement or cancellation, if you find the service isn’t what you thought it was

2. Mutual Funds

What you think you’re getting: A path to riches in retirement with minimal effort.

What you’re actually getting: High fees which can eat away at your returns.

Mutual funds typically charge extra fees called an “expense ratio” which usually hovers around 1.5%. This can be a high price to pay compared to 0.25% of index funds or some target date funds.

And then the real kicker: Only 24% of mutual funds beat the market, meaning you may be leaving money on the table compared to investing in index or exchange traded funds.

Mutual funds can be a great way to build income, but:

• check for the long term returns, like 5-year, 10-year, and longer
• check to see what the fee structure is—lower is better
• check to see if you can move money in and out of the account as you may need without additional fees

3. Job

What you think you’re getting: A fat paycheck.

What you’re actually getting: Extra expenses like clothes for work, lunches, and commuting costs which might reduce your effective salary.

What? A job? Bet you thought it was all about making money, right?

While I’m not saying you shouldn’t have a job, your net income from working is likely less than you think.

Don’t forget about all the time you spend at and getting to and from work as well. Add it all up, and a $50,000 salary earner can be taking home just $8.06 for each hour of activities related to his job.

Here’s what you need to double check:

• travel time
• travel expenses (not just gas, but vehicle maintenance)
• lunch, snacks and coffee breaks
• clothing, uniforms, shoes and other wear
• technology, like laptops or tablets, if it’s not provided
• taxes

4. Collections

What you think you’re getting: A win-win of a hobby which can also be decorative.

What you’re actually getting: Expensive clutter-producers.

Collections can make for a fun hobby. But many collectors make the mistake of thinking it’s an investment. Many collections aren’t nearly as valuable as they seem.

Once-popular collectibles like Ty Beanie Babies and Hummel figurines have now seen their markets saturated, driving the values way down.

If you’re truly passionate about your hobby, and it makes you happy, that’s fine. Just know there can be extra costs with:

• storage, containers, shelves and organizers
• shipping, if your hobby has you purchasing from afar
• additional insurance—if your collection warrants it, you may need insurance to cover loss like fire or storm damage

5. House

What you think you’re getting: A place to live along with a solid investment.

What you’re actually getting: A money pit with returns much lower than the stock market.

When making the jump from renting to homeownership, many think they’re getting a great deal by simply exchanging a rent payment for a mortgage payment. Building equity while getting a mortgage interest deduction makes this a sweet deal, right?

Not necessarily. Costs like property taxes, maintenance costs, and insurance can really drive up the price.

And if you’re still banking on a big increase in home value, you may be mistaken again.

Historically, homeownership is a bad investment with inflation-adjusted returns of around 1 percent, far lower than the roughly 8% the S&P 500 returns.

Housing can be an investment, but it can be a negative equity play, too. Minimize:

• high turnover areas
• high tax areas
• high HOAs
• additions which don’t return full value
• high risk areas, where insurance may not cover loss, or insurance is expensive

6. Cars

What you think you’re getting: A convenient and affordable way to get around.

What you’re actually getting: Huge depreciation, fuel costs, and interest charges.

It’s not just the price of the car which matters. You need to continuously shell out more money to operate your car, too.

Add it up, and you’re looking at at least $5,300 per year for the first five years of ownership, according to Consumer Reports.

However, this figure is for the cheapest car on the list, a Honda Fit. Luxury SUVs can cost $13,000 per year with some pickup trucks almost that high, too.

Definitely avoid:

• high payment leases
• exotic vehicles you can’t resell easily
• cars with high maintenance costs
• vehicles with low resell value
• high cost repair plans, warranties, and accessories
• motor vehicles requiring extra monthly storage bills

7. Television

What you think you’re getting: Cheap entertainment compared to the movie theater.

What you’re actually getting: A huge time and opportunity sink which probably costs you monthly.

While unwinding in front of the TV every night is an American pastime, the amount we do so is likely the most damaging factor.

Putting aside the monthly cable subscription costs, missed opportunities can cost much more. If you worked a minimum-wage job instead of watching the American average of 31.5 hours of TV each week, you’d earn almost $12,000 every year!

Limit your time in front of the tube, and you’ll limit the high associated costs of watching television. Also avoid:

• costly monthly subscriptions you don’t use long
• constantly upgrading your television and sound system to the latest and greatest
• paying for one-time Pay-Per-View sporting event you could watch at a bar or social arena with friends
• purchasing movies you’ll only watch once

8. Bottled Water

What you think you’re getting: Better water than tap for on the go.

What you’re actually getting: The same water at up to 2,000 times the cost.

Perhaps tap and bottled water are still on the grand scale of our budget, but price increase is rather remarkable. Drinking eight glasses a day of bottled water can cost $1,400 a year, compared to just 50 cents by drinking from the tap.

Reader’s Digest reports about 25 percent of bottled water comes from “public sources” (i.e., the same place as tap water).

Instead, consider a reusable water bottle and bring it everywhere!

9. Vacations

What you think you’re getting: A relaxing time off with primarily airfare and lodging to pay for.

What you’re actually getting: Food, ground transportation, and entertainment costs which ball0on the total expense.

I love traveling and am happy to pay to do it, but nearly every trip I’ve been on has cost much more than I originally planned. It’s easy to assume the major costs of a vacation are a plane ticket and hotel, but restaurants, admission to attractions, and getting around can end up costing just as much if you aren’t careful.

Currency exchange fees and airline fees add even more to the cost. Don’t forget that if you don’t have paid time off from work the cost of your trip will be even higher.

Do your best to leave home without:

• late “deals” because you couldn’t plan ahead—they usually aren’t deals at all
• hidden fees, like taxes, cleaning fees, resort fees, and even parking fees
• extraneous airline fees, like upgrading seats, baggage fees, and convenience food and beverages you could bring yourself