Stuff Costs More Than You Think

A week ago my wife and I bought a motorcycle. If you've been reading the blog regularly you know that we took a motorcycle safety class about a month ago (which I highly reccomend by the way - find out where it is in your state here).

We had budgeted a specifc amount ($1,000) and thankfully we were able to spend even less than that ($750). That's right - I bought a motorcycle for $750. While you may be thinking "does it even run?" it does in fact run quite well. The bike has some cosmetic damage, but as far as actually running, it works fine. The seller was desperate for the cash so he offered me a great deal (I had walked away after offering $1,000 but then he lowered the price again).

With all that being said, were we prepared to spend more than the $750? Not entirely. I still need to register the bike - that will be around $50 (I'm guessing) plus pay sales tax of $52.50 (7% of $750). So there is another $100 added to the initial cost. It always seems like such a great deal at the time! I handed over the cash for the bike and I was excited. "I got a motorcycle for $750 - woohoo!" But then reality sets in...

Not only will I have to pay $100 to the state of Ohio when I register the bike, if I want to ride my new motorcycle without my wife freaking out I need safety gear. I bought a helmet last week for $80 and ordered a jacket for $65 which arrived yesterday. I also wear gloves while riding (I already had those) which had cost around $30. Last not but not least I needed insurance. Thankfully, since my motorcycle is so small insurance is relatively cheap. But it is still an additional expense: $75.

So lets add all that up:

Motorcycle: $750
Tax and Registration: $100
Insurance: $75
Helmet: $80
Jacket: $65
Gloves: $30

Total: $1100

Now my $750 motorcycle doesn't look so cheap anymore. Granted, the bike itself was still only $750. But if I didn't have the bike, all those other costs would not be there either.

Conclusion: stuff costs more than you think. I can find numerous examples of this in other areas as well. One excellent example is with technology. I own an iPhone (and an iPad) and I know for a fact that it has cost me more than I had realized it would. First I bought the phone: $200 ($600 for an iPad).  Ok that is easy enough. Then I know I needed to budget extra each month for the data plan: $30.

All is well with the world right? Wrong. I then discovered the world of apps. I have probably bought anywhere from 10 to 20 apps ranging from $.99 to $9.99 (I've only paid $9.99 once but it was for the best budgeting software ever).

Add to the fact that many people buy a case for their phone, as well as a bluetooth headset, and that is another $50 to $100 to the cost of your phone.

I'm not saying you shouldn't buy Stuff just because it might have extra costs associated with it. What you should do is plan for those extra costs. I knew that I would have to pay some of those costs associated with the bike.  But in my head I was only thinking about the $750 price tag.  Don't let yourself get caught up in how much something initially costs.