In the last episode we looked at 'things'. For most things you purchase there WILL be a cost at some time down the track for repairs and maintenance. If you ignore this, the more things you buy, the faster you are backing yourself into a financial corner. Here’s a potential scenario. You stretch your finances and have a pool installed in time for the approaching Summer season. A pool is a ‘Thing’ that is going to cost you a lot to install and a lot more to run and maintain.

Instantly your electricity bill will increase. Over ten to fifteen years the cost of additional electricity could go close to the cost of the pool itself. But that’s no biggie you tell yourself.

Then there is the cost of salt and acid and chlorine and buffer and stabiliser, and any other chemicals needed to keep the water clear and healthy. Add to that the fact that the pump and the chlorinator will both be up for repairs after maybe 5 years; bearings, seals, corrosion, scale build-up, filter maintenance and so on.

In fact a pool is possibly an extreme example, but it’s a good one to use as an example. How about buying a car then? You have the cost of the purchase, but it is also going to cost you for servicing, insurance, repairs after the warranty runs out, tyres, batteries, cleaning; there’s a lot to consider beyond the initial purchase cost.

How about home appliances; Sooner or later they will all need to visit the service department.

What’s my point? You need to consider the cost of ownership as well as the cost of the initial purchase for just about anything you want to buy.

If you continually stretch your finances to purchase as many things as you can, and you do not make an allowance to put money aside for repairs and maintenance, you are asking for trouble.

How do you manage this then?

It’s exciting buying something new, and excitement is a strong emotion, so it is easy to overlook type 4 expenses when you’re at the point of making a purchase. It’s essential that you research the cost of ownership when you first start thinking about buying something you want.

If you’re not at all technically minded and have no idea what the ongoing costs might be for something you’re looking to buy, do some research on the internet. Ask someone you know who IS technically minded. Ask someone who already has what you are considering purchasing. Don’t just ignore this. There is nothing worse than having a knot in your stomach because you got stung with a repair bill that you were not expecting.

Wisdom is knowing what will happen before it happens! Most repair bills are predictable. It’s not a matter of IF, but a matter of WHEN the repair bills will occur, so if you go into purchases with your eyes open and your ‘wise’ hat on, you will avoid most of the money stress that comes from ignoring Type 4 expenses.

The ongoing pleasure you get from NOT being stressed financially is way better than the short lived pleasure you get from buying things! If you’ve previously overlooked Repairs and Maintenance type expenses and you’re feeling the stress caused by out of control finances as a result, it’s time to take action. A Spending Plan will allow you to master all 6 types of expenses.

Talk to a Spending Planner to find out more. I’ll be back next time to look at number 5 of the 6 types of expenses.