Everything Costs More Than You Think #048

actually met. The first memory, though, that I do have is some friends of ours, mutual friends, had invited Kate and I over to play some board games, and you and Emily were also there, and I think we may have been playing some original uh Settlers of Caitan. Oh yeah, that's like that. That's not about right, It's like the gateway drug for nerdy board games. Yeah, so I think this is about eight years ago, and yeah, that's when we that's when we first started hanging out. I don't

have anything specific about that night. I'm sure I whipped your tail some Settlers, but unlikely. That is funny that it started out with us playing board games because we're both super into nerdy board games. We did a whole episode on it back in the day, and we made recommendations kind of for some of our favorites. But yeah, dude, I think it's not a knock on you because obviously we're best friends. But I barely remember, like the birth

of my first daughter. Now, I just feel like so many five years have passed and that part of my memory is just almost gone. I feel like the most cemented memories I have of our friendship going back were two times that we traveled together as couples. And the first one was we left on Halloween like six years ago and we went to Ireland together as a family, and I think we mentioned that on the podcast at

one at one point. And then a trip that we had to the Keys, which we kind of piggybacked on you having a photo shoot a thing that you had to shoot down there, and we kind of stayed together. And that trip to the Keys, when we had our our oldest daughters were only just a few months old. I just distinctly remember that trip to Those are kind of the memories that really are cemented from our early

friendship days. So basically you'll remember things where there's pictures associated with it that you can go back and see pretty much. Yeah, so it's interesting you mentioned that that sort of Keys Florida Keys work photography trip because I remember, actually before even Ireland, was one time when Kate and I did some photography work for a restaurant and one of the things that we negotiated with them was that

we got a sweet Fats get certificate. H that's right, Yeah, that they paid us in food and this place is really good. This is a really great restaurant here in Atlanta. And that was super early on in our friendship, very very early on. Yeah, you invited us to this fancy dinner.

I was like, oh, I don't know him like that, but well, the reason being because so, yeah, we got this huge gift certificate and Kate and I looked at each other and we thought, we can't this is a lot of money and to be more fun if we went with some friends. So we thought of you guys. And what I really remember though, is that we hadn't gone to a lot of nice restaurants at that point

in our lives. We totally novices nice restaurants, and I'm pretty sure you had on a T shirt, but we walked in and probably a band T shirt or something. We were I think we were all a little under underdressed backwards hat, yes, but we yeah, enjoyed a really nice dinner. I do remember that. I remember getting some awesome steak and maybe that was really what cemented it for us, right, Yeah, bonding over meat? Yeah, why not?

I started all you vegetarians out there, But yeah, so traveling together as friends and and a great meal sometimes and and then nerdy board games. Man, I feel like that kind of encompasses some of the things that we enjoy the most and uh and still enjoy kind of doing together when whenever we can, let's do it some more. So that's uh for all you new listeners, that's kind

of how Matt and I became best friends. And then, like you'll find out as you continue listening to this show, we talked about the things on this show that we care about that we already enjoy way discussing and and we started this podcast because we love craft beer and we love talking about money things that matter to us.

And so yeah, this podcast is really just kind of an excuse for Matt and I to do what we would be doing anyway, and we're having a blast doing it, like drinking beer and talking about it too, right, Yeah, and today we are drinking a beer called Pretty Willie's Imperial Stout by Against the Grain Brewery. This is a beer that my real estate agent gave to me over

a year ago when I closed on a house. And this, in particular is a beer that you're supposed to let rest and evolve, and so we're gonna kind of see how it's drinking. We'll do. Thanks so much for sharing this one with me. Cheers, Bunny, cheers. All Right, Matt, give me one word that describes how you feel about this beer after just one zip, only one word. I feel like this is gonna be harder for you than

me because I'm ver both. Yeah, Joel tends to be the one that talks a little bit more on the show, which is totally fine. If I had my own podcast by myself, it might only be five minut it. But if it was just you talking, who knows how long you'd go. That's true, Okay, but back to you, so one word. Okay, this is gonna be weird, but I'm gonna say jacket, all right, that's weird. But I think

we've already mentioned, Jacket. I think we mentioned on the show before that you have some odd taste buds and some odd sensory abilities. You're like the beer somalier or this podcast. You bring that to the table. I have a much less developed palette. So my word, my one word for this beer for right now is going to be roasty. Nice. See roasty. That's I think everyone's gonna understand that, Jacket. I think what happens is I overthink stuff and now I'm just gonna have to actually explain myself.

But we'll say that for the end of the show. Oh and by the way, Matt, since we're drinking a big barrel aged Imperial stout and this is one that it's meant to be kind of aged for a while in the cellar and then you're supposed to drink it. Uh. There was an article I read about barrel aged doubts and kind of the cult behind barrel aged outs. Right now, I find it fascinating that they've kind of become, um, this thing that people hunt for and spend lots of

money on stouts like these. One of the things I thought that was cool about that article. They were talking about the costs associated with some of these beers where they are aged and they take special bourbon barrels, uh, and they actually take more material, like more ingredients to actually make the beer, and more warehouse space oftentimes because you're talking barrels. They mentioned in particular the Bourbon County

series by Goose Island. They have multiple people working year round just to develop they can just maintaining that batch just to develop those Bourbon County beers, and it's really expensive to create, which leads to part of the reason these beers can cost so much. Yeah, and not just double the cost, but sometimes like quadruple the cost of a typical beer like this that you can pick up

at your local grocery store. You get the special bourbon barrel aged version of it or any kind of barrel age typically and it's going to be a lot more because yeah, like you said, it's gonna take a lot more time, so a lot more manpower, but then also to the ingredients that go into it and be twice as much from a quantity standpoint. Yeah. So if you're at your local grocery store or bottle shop and you see a barrel aged down on the shelf and you

look at the price tag and you think it's ridiculous. Well, there's a lot that goes into that, and not all of them are created equal. Some of them are better than others. And we would recommend kind of researching these beers before you spend twenty bucks on a bottle or fifteen bucks even on a bottle. And Untapped is a great resource to kind of look up what beer lovers think about the beer. But there is a reason behind the price tag, and so we want to go to

kind of share that. And and Matt and I've talked about why we drink craft beer on the show every week. It's important to us. It's something that we care about. And we also want to encourage people to live a life that reflects their values, and this is something that we value. This is something that we place a high priority on good beer, and we're willing to spend the money for really good beer um and cut back in other areas right in order to make that happen. Yeah, man,

that's right. Oh, before we move on, one other thing I just thought of. We recently did an episode on hedonic adaptation, right where you kind of get used to something, whether it be because it's really good and you kind of get used to that really good feeling and it kind of becomes your new normal, or how you can also get used to something that's kind of bad or negative and you kind of get used to that that

becomes your new normal. Kate and I we've been out of our kitchen right because we've been renovating our house. We've been out of our kitchen for almost two months now, and honestly, I don't feel like much has changed for us, Like we've kind of gotten used to the fact that all of our stuff is crammed into our dining room. But I don't know, it just it just kind of struck me as interesting because I haven't been focusing on

how terrible it's been. You just kind of roll with it and move on with life and it becomes your new normal. I'm surely the first two to three days we're kind of shocking a little more painful, But what I'm looking forward to is looking ahead and knowing that eventually we'll be able to move back into our normal, full space in our house, and certainly that's gonna be great.

But I'm kind of worried too because on the other end of that, I think, well, it's gonna be really nice, But how quickly is it going to be before I get used to it? You know? Like it it took me zero time almost to get used to this sort of negative aspect of our lives, like being crammed into this less than ideal dining room. And then it's not gonna take you too much time to become used to be in a fancy pants exactly. Yeah, And man, I just don't want to become super fancy pants. That's not

who I want to be. So we will get to why Matt's on one word for this beer was jacket. Uh, leg get later on, but first let's get to the topic of hand. Everything costs more than you think, and what Matt and I wanted to talk about on the show today is considering secondary costs. Anytime you make a purchase, the price tag that you're paying up front on whatever it is is not the only cost involved in making a purchase, and we wanted to talk about the other

costs involved. Uh we're calling secondary costs, and those are additional costs that you will or might end up paying on a purchase that fall outside of that original purchase amount, and we think it's really really important to consider those things because it can be easy when you're budgeting or when you're considering making a purchase or adding something into your life to only consider that upfront price tag and not think about all those other dominoes that fall when

it comes to the pricture of paying. And so, Matt, this podcast is going to be dedicated to those other dominoes that fall how that impacts like your wallet in your life, that's right. Yeah, Folks tend to not consider the sort of nickel and diming effect that happens after you make a purchase. Whether it's a quality purchase or a cheap purchase, it doesn't really matter. What we're talking about, like those expenses that, like you said, you may or may not pay, and let's start with the ones that

you will pay. Yeah, So we kind of divided this up into two different kinds of secondary costs. One is a hard secondary cost and the other is a soft or lifestyle secondary cost. And so we'll kind of just quickly run through the definition and describe what's different about each. That's right, man. So hard secondary costs are what we're considering to be costs that you have to pay because it's either the law, right, so sales tax, like you

have to pay sales tax. Or these might be costs that you have to pay because you signed an agreement where you promise that you will And these can be monthly fees or an h O a say in a condo that you live in, or these are costs because the item that you've purchased just requires it, you know, this sort of basic maintenance. And I'm not talking about fancy, high end maintenance or anything that kind of goes above and beyond maintaining that item and allowing it to you know,

work and function like you wanted to. In these cases though, you don't have a choice. And these are things that you will have to pay. Yeah. So those hard costs, right, they are there for a lot of purchases, and we'll kind of go into some examples later on in the show too, but there there no matter what, and there's

no getting around them. And they're also kind of easily identifiable upfront, Right, you can do the research, you can know the figures, and you can kind of know what you're getting into when it comes to some of those hard costs. But on the other hand, these soft secondary costs that we're gonna talk about, Matt their costs where you're likely going to feel pressured to pay because they

fit and complement that primary purchase. So these are ones that you might not see you can't necessarily quantify upfront unless you're really really thoughtful. And an example of that would be if you get a new laptop, Oh, well, guess what, I need a new backpack to carry that laptop around in. And then you are like, well, you

know what, I'm one of this cool backpack. I need a jacket to match or whatever it is, right, And it's like that if you give the mouse a cookie syndrome, where those are kind of what these soft secondary costs are. Those are we're calling them. And so if it's a purchase that you make that then forces you to feel like you need to upgrade something else in your life,

and that's one of those soft secondary costs. It's a little harder to quantify up front, but we're gonna kind of go through some ways to help you figure out what those could be and how to decrease or maybe eliminate them even in your life. That's right, man, it's crazy, right,

it's a little bit like lifestyle creep. It's kind of funny hearing you talk about an example with like the laptop with the bag and then the jacket, But it's almost like anytime something touches something else, it's like it getting gets infected with looking old, right, because you have something like new and shiny, and then in relation to the old stuff, you think it really would be nice if that was kind of upgraded as well, And then before you know it, where do you stop? Like, when

do you stop? Where do you draw the line? And I think what's important to keep in mind, though, is that you can draw that line. You can decide that these are expense is that I'm not going to participate in, and that you have control over. And that's the biggest difference between a hard secondary cost versus the soft or lifestyle secondary cost is that the soft secondary lifestyle costs

you just have control over, You have options. But either way, it's yeah, like you said, it's good to be aware of those and to know what steps you can take to keep the expenses down. Yeah, And I think all of us have experienced both ends of these, right, We've experienced buying something and we didn't realize or we didn't

factor in those hard secondary costs. We made the purchase or we made the leap into something, and we didn't even take into consideration those costs that were inevitable, and we bore the bront of them after we made the decision. And maybe for some of us we had to put that on a credit card or yeah, like you with gasoline, you're like, oh man, this car takes gas. Totally forgot except I drive an electric car, So jokes on you. But yeah, there's all we've all been in that situation.

And also in regards to the soft or lifestyle secondary costs, someone who is considering, let's say a bathroom renovation, well, I want to reach out the floors and put in a new toilet. Well, then you want a new tub because a tub looks old and nasty exactly, and then maybe a new vanity, and you know what, if the bathroom is gonna look this good, I think I needed

to redo the kitchen at the same time. And so we've all experienced this in our lives to one extent or another, and it's just good to be aware of as we go into making purchases. It can help us to know when to say no. To things, and when things are out of our budget, out of our range, it gives us a better perspective and allows us to go into purchases with a little more like wisdom and knowledge behind us. And so we've been talking a lot

lately about spending and consumption. And you know, a huge reason that Americans today are having issues with saving enough a retirement comes down to their spending. It's not that they're not making enough. More of it has to do with the fact that folks aren't investing and using that money that they've earned wisely, and that has led to

a lot of people feeling insecure about their futures. And so right after the break, we're going to talk about why these secondary costs are so important, and then we'll also give some exam amples, some specific real life examples that will help you to see the difference between these two types of secondary spendings and just how being aware of these things can help you rain in your spending.

All right, Matt, back from the break, and let's talk about why the secondary costs are so important, and it's because there's this major problem in America. Four out of five Americans are worried that they don't have enough in retirement, right,

they are spending too much. And I gotta tell you, as we've been combing through this topic doing research for the show, Matt, I gotta believe that much of this is because of poorly thought out purchases, right, And those poorly thought out purchases lead to these outrageous secondary costs hard ones or lifestyle ones, either way, but they lead to those secondary costs for people that weren't factored in, and it leads to living a lifestyle where you're living

month to month, paycheck to paycheck, and you can't get ahead. So I feel like that's the problem that we're trying to address in this episode. That's a very good sort of big picture as to why this is a problem, and then diving down to more the specifics. Right, deciding whether something is a solid purchase, right, can really only be made when you consider these costs before taking that plunge.

And so if you jump into a purchase before crunching the numbers and realistically considering the complete financial picture, you could easily sink your budget. You need to do your homework, like this is just part of the due diligence period of making a purchase. You don't want to necessarily have what's it called an analysis paralysis, where you don't make a decision because you're so stuck on the numbers and you're so stuck on optimizing it and making it perfect

that it keeps you from any action at all. But you have to do your homework. You have to take the steps necessary in order to make sure that you're setting yourself up for the future. Yeah, Matt, I love what you just said. They're due diligence. I feel like that is a great kind of way to think about the secondary costs of a major purchase or even a minor purchase that you're just about to make. Due diligence. When it comes to buying a house, is that seven

or ten day or whatever you negotiate. Really, it's that period that you have after you're under contract on a house but you're not obligated to buy it. You know you want to, but you don't have to go exactly, and so that period of time gives you the ability to walk through their decide whether you're into it, get

an inspection, all that stuff. That due diligence period is crucial, and so many people back out of that purchase during due diligence, right, And so I think due diligence is is probably the right phrase to use when we're talking about secondary costs of purchases we make doing that due diligence, taking that time period to factor in and to look at those secondary costs, and then whether your purchase is a wise one or not, whether you can afford it or you can't, or whether it's worth it to you

or it isn't. Like that due diligence period is going to tell you, you you know, whether that purchase with its associated secondary costs is right for you. Let's give examples of some of the hard secondary costs when it comes to buying a house that will kind of help put it into perspective. It's not just the hundred fifty or two price tag that's associated with the home for most people.

When you buy a home, there are many other hard costs associated with owning that right, So in particular, you need to figure in closing costs, getting that home inspection, which can be four or more potential repairs on the home that you'll need to make immediately and over time, insurance. The list just goes on and on and on of the hard costs that you're gonna pay when you buy a home. You're gonna have taxes annually on that home.

The hard costs that are associated with the home purchase are real, they are lengthy, and they are necessary when you're considering whether you can afford that home purchase or not. And then in addition to this hard cost man, there's the lifestyle or soft secondary costs. And these are things like furniture. Right, you get that big empty house and you've got all these extra rooms that you're so happy to have, and the first thing that most people do

is they start buying furniture exactly. And then that's honestly been one of the biggest problems Matt Is as home tizes have grown in America, they've pretty much doubled in the last thirty years. Certainly, the primary costs of more building material, of higher mortgage costs, right, that those factor in, But it's so secondary costs that really seen people so much of the time that they just didn't factor in. And a lot of it is these lifestyle secondary costs.

It's the furniture to feel the ten rooms in your house versus the four rooms you would have had in something smaller yeah, man it what's so crazy about something like furniture, right, is that this isn't a hard cost where it's it's one and done, like, this is something that can change over time, and that can change with your taste. Who knows how much you could actually spend on furniture over the lifetime of a specific house because you could change your mind every I mean, you could

change your mind every month. Right. That might be crazy, but you could. And so that's what's so difficult about these soft secondary costs, or these lifestyle costs, is that it's kind of up to you as a consumer. And as we know advertising in the way that's fashion and just different needs air quote needs are marketed to us, we feel convinced that we do need something different. We do need something that's fresher or a little slicker, or

something that's a little more shiny. And that's what's so tricky, right, Like, that's the slippery slope of these lifestyle choices is that you have to keep yourself in check. And from most folks, it's not something that once you buy, once you're done, Like when you buy a couch. Most folks aren't thinking, cool, I'm done with buying couches for the rest of my life.

They know that they'll probably be a new one or a different one maybe in ten years or five or even like two or three years, which is crazy in my book. Yeah, Matt, when you put into perspective the overall costs that you're going to bear when you buy a house, it completely changes the equation, right, And we've talked about in multiple episodes. We've talked about, you know,

renting a house versus buying. We've talked about why your house, a primary house, is a bad investment, and some of these secondary costs are the exact reason why a primary home is not always a good investment, and it's because you overspend and it's a secondary cost that really turned that home purchase from something that might be okay into

something that's terrible for your wallet. And honestly, like we touched on our home renovation earlier in the show, and that's something that Kate and I that we've struggled with. You start making improvements on your house, and you start, like you said, like the examples you gave those are pretty close to home because they're happening in our home

right now. Bam. But yeah, you start making improvements, and you have to make the decision where are we going to draw the line because you think, okay, we've got this wall open, why not why not go ahead and make this improvement, or let's go ahead and insulate this because you can justify it. You can say, oh, well, this is for energy savings. Oh, this is something that is gonna in the long term, it's gonna save us money.

But eventually you're gonna run out of money and you're gonna have to say no, or you're not going to run out of money, and you just need to say no. Right, you have to decide this is enough, We're happy with this. It doesn't matter that this isn't quite as nice. It's gonna be fine. The same thing I think applies to

to our rental properties. Man, You and I both have rental properties, we have investment properties, and time to time things need to be replaced or upgraded because it's just old, nasty, and you have to make those decisions of where are you gonna draw the line because you, like you said, you you replace one item, say in the bathroom, and you think, okay, that's gonna look terrible if we leave it like that. Let's just go ahead and revamp the

whole bathroom. Well then you've got like a really nice bathroom, but the kitchen looks kind of rough, like you said. And so it's not necessarily only with consumption, but it can also be with what most folks would consider an investment. Where is a smart line to draw? And honestly, like that's the toughest question, and that's why it comes down to you as an individual. So yeah, Matt, let's give

a few more example. It's just kind of flesh this out, because I feel like these examples really hammer home the reality of these hard secondary costs and the soft secondary costs, which can make a purchase that looks good on the front end actually a bad one. And so let's take, for instance, going to college, the hard secondary costs that are taking out loans, and those loans have interest unless you're this super uber smart person and you've got mad

mega scholarships or whatever it is, which is awesome. Most people in America, I mean, obviously we all know the student loan debt crisis in America. One point five trillion dollars in student loan debt. It's just out of this world, right, It's crazy and it's ruined the lives of many, many people.

You have to factor in as you are going off to college, as your kids are going off to college, those hard costs, the loans and interest, and what that's gonna do to you over the long haul, and you have to compare it to the usefulness of that college degree for you over the long haul, especially in a changing economy where requirements of individuals in the workforce are changing almost daily, not just every decade, right, but but almost daily that the requirements for young people coming to

the workforce is changing. So if you have a college degree that you think today is going to be useful for the next thirty years, I mean, there's a small chance that you're right, but there's a big chance that you're wrong, and that those costs that you incurred actually aren't going to pay off in the way that you thought they were. Yeah, man, and even room and board, like, if you're going off to college, it costs some money

to survive. It costs some money to have a place to sleep and to live, and you got to feed yourself even in college. But yeah, those are some of the hard secondary costs associated with college, and so some of the lifestyle secondary cost man associated with college are what sort of revolve around the experience, what people think of when they go off to college and they want to have this sort of best four years of their life.

You're talking about keggers, right, Yeah, kiggers, I mean like literally partying, but folks oftentimes will say instead traveling abroad or spring break. But all that sort of plays into the American mentality of like the college experience and even going out to you with friends, Like it doesn't have to be something that where it's this huge, big ticket item, but just the sort of daily lifestyle thing this aspect

that people associate with college. Yeah, or going on a spring break trip with your friends, right, those are the kind of things that come up when you're in college. That are these lifestyle secondary costs, right, that you're going to incur if you can't keep it under control. Right and and like we said at the beginning of the of the show, some of these are controllable. Some of these are under your control. You can decide to back up, hit the brakes on that spring break trip, and with

that control, you're able to save yourself some money. Right. You could say no to eating out, even though all your friends are doing it. We're just saying, think about these things, think about these costs that are likely to occur, because saying no in the moment can be really hard. Because there are ways, especially with these lifestyle secondary costs,

to actually cut down on those expenses. But just be aware that they are likely to at minimum tempt you to spend money on those things that other people around you are spending money on. Just know that some of those hard secondary costs are immovable when you make that choice. And then some of those lifestyle secondary costs, they're either likely that you're going to make that choice or it's gonna take some resolve in order to make sure that

you don't incur those costs. Yeah, that's right. At the very least, it's gonna be very tempting to also want to go on that trip. Yeah. And so another example, let's talk about cars or transportation, and so it's not just the cost of the car, right, there are a lot of hard secondary costs associated with vehicles, things like

gas or insurance and repairs. Right. These are all things that you know in your head mentally that these are things I'm gonna have to pay, but it's not until you actually go to the mechanic and you get that bill, or you start receiving that insurance bill, the rubber hits the road, exactly, you're gonna have to get new tires. This is when you're gonna realize how much owning a vehicle, owning a car is actually going to cost you. Yeah,

the full amount of that original expense. Right. And so if you buy a new car forty dollars or a used car for five thousand dollars, there are secondary costs that are immovable to a large extent, right, Uh, And knowing that before you make the plunge is huge. So, for instance, in our state, matt when you buy a used car or a new car, you pay this. You pay the sales tax upfront day one, right. Well, and dude, in specific to Georgia, you don't even have to have

purchased the vehicle. Even if you bring that vehicle from out of state into our state, you have to pay that tax. I know, I feel insane. I feel so bad for anyone moving from another state, having bought a new car recently and having potentially paid sales tax in their home state, moving here and then paying it again. Honestly, it's highway robbery. It's it's not right that. Tell you about my buddy Cal that moved from New York. He's got a great job, makes makes a good amount of money.

But he had recently purchased a Beamer fancy you know, fancy BMW. Yeah, and it was only a couple of years old, and he moved back to Atlanta, and dude, he got hit with like a five over five thousand dollar bill, not because he purchased it, but because he is registering and transferring that vehicle to the state of Georgia that he got nailed with that like, welcome to Georgia, dude, pay up. Yeah, it's not right, it's rough. But those are the kind of costs, right, So if I know

that ahead of time, I can pack her in. Well, you know what, if I buy a thirty thousand dollar car, I'm going to be hit with a multi thousand dollar tax bill. If I buy a four thousand dollar car, I'll be hit with a multi hundred dollar tax bill. And that's a big difference. Right when we're factoring in those secondary costs, it massively influences the decision that we make on that primary purchase. Right, And so directly in

a car or a home. Those secondary costs should have a major overriding influence, I would say, on whether we make the primary purchase to begin with, or whether we choose to make do with what we have or off for something maybe a little less fancy. You know, this actually makes me think of when you're purchasing a home and if you're actually well, if you're not paying cash, if you're getting a loan, which is I guess people out there and you get that. Actually, actually I think

it's only seventy isn't that crazy? People pay cash for houses, let's ball, or not pay cash for houses but own their homes at least in full. Okay, so, but that would be interesting to know how what plands people pay cash for houses. It's fascinating. I'm curious. But either way, the Truth and Lending Statement, you know, I'm talking about the Truth and Lendings closure statement, Yeah, exactly. Yeah. And it's got the chart and it's broken down by say

you're getting a thirty year mortgage. It's got you know, the year that you're currently living in all the way out thirty years, and it has the tally of the full amount that you're actually paying an interest. That way, you actually know how much it's costing you to finance that house and to go ahead and get a mortgage on it. It's like, we need that but on everything

in our life. Dishwasher, truth and lending statement, well except that you're not getting alone on your dishwasher hopefully, And to be honest, we actually have like some of those things in some regards, right, We've got like the energy Yeah, that's what I was thinking, the energy smart stickers on like a TV or a washing machine, or let's say,

on a credit card statement. There's a law that required credit card companies to put on their your statement you know how long it would take you to pay off your credit card bill if you're only to pay the minimum exactly. And that's just so helpful for a consumer to see, because it's freaky enough to see the balance and the interest rate. But when you know that if you only pay the minimums, you're gonna be paying for thirty seven more years, I mean insane. Yeah, that a

lot of fire under you, right. But back to a car mat Yeah, Like the biggest costs actually that people don't factor in at all is depreciation, especially if you're buying new right. That tax bill can be hard to handle. It can be many thousands of dollars in lots of states in one lump sum. But on top of that, man, your depreciation costs are out of this world, and your car driving it off the lot is worth less than the day you bought it, and a few years in

is worth less. So make sure you factor that in. Being someone the factors in secondary costs into the equation is being the opposite of a payment buyer. A payment buyer is what you don't want to be, right, You want to be the buyer. That is being a smart purchase and that includes factoring in all those secondary costs. Yeah, man, But then even on top of that, there are the

lifestyle secondary costs. And I mean it kind of sounds silly to day, but just like car accessories, anything from tensing your windows to like getting a trailer hitch for those spinny rims like you got on your van. They look amazing though, so my friends Steve totally had like the fake cub cap spinners he watched he'd watched too much by ride on MTV. Oh gosh, what was his name?

Exhibit exhibit that's right, Exhibit No. He really did watch that show, and he went to Auto Zone and bought the plastic rims slapped him on his red ninety seven caravan,

and it was pretty awesome. That's a good look, I will say that the an even better look, though, was the fact that he had to tie his spinners down because when he got above like sixty miles per hour, they would like vibrate and make a loud racket, and he was afraid they're gonna fall off, So he take some string and he would he I mean, no joke, He tied his spinners to themselves so that they wouldn't spin. It sounds like there were some secondary cost to steve

the reputation while doing this as well. And so those are silly sort of lifestyle choices. But even up to feeling like you have to now have a garage because you've got a new vehicle, dude, I'm gonna admit that this is something that I personally felt somewhat of a temptation to to do, not to necessarily get a garage, but to want to keep my new vehicle clean. So katon I bought a somewhat late model Honda recently, and

we just wanted that thing to look good. You know, we dropped all this money on it, and I felt that, you know what, we're gonna have the nice, newer vehicle. I want to make sure it looks good. And because of that, I was taking it to the car wash, like the five dollar car wash where you just zip through it real quick and it's so fast and easy and I don't have to do anything. But I was spending more money because I thought, Okay, I've got a new vehicle, I've got to keep it clean. I didn't

have to keep it clean. That was just for me. That was my ego. I didn't wanted to have a shiny ride. And so as silly as it is to say that that's just something I did, I was falling into that trap. And part of me did think, man, this is this is why people do have garages, because they don't want the tree sap falling on their on their nice vehicle that they just spent money on. And the fact is, though it doesn't matter, because like you said, it drops in the first five years of owning a

new vehicle, and so it's not in an investment. This is pure consumption, and these lifestyle secondary costs are are nothing but consumption. Man. I feel like the perfect example of kind of like what we were just talking about, how you have actually a lot of control over these costs is the example of expensive hobbies. So, for example, golf golf can become either a ridiculously expensive hobby or

it can be a relatively cheap one. You can travel all over the world to play the finest golf courses, pay enormous greens fees, pay for a caddy, pay for lodging while you're there, all those things, fancy clubs, nucleats, pants, all the works, right, or you can be the guy that goes to the Part three course three miles down the road, plays once a week. The greens fees are eleven dollars. There's such a range of options in there.

When you're talking about a hobby we've talked about before in the show that I love to play disc golf. You love to play disc golf. We play together, you know, rarely, because we don't have them at a time, but when we do, it's amazing and there's almost no cost. Right, courses are free. You need one, maybe two discs to get started, and those are pretty cheap. Yeah, I've got three,

but I only used to. I've got like eight and I only used to so but so many of these hobbies that you could potentially devote a lot of time and energy to, well, the actual cost that you will incur depends on you and not the hobby itself. That makes me think of like college football specifically, and you can be a college football fan and it can cost

you pretty much nothing. Right. You can just read the articles online, keep up with what's going on, and then you could pick up a six pack and then take it over to your friend's house who has cable. He or she is stoked that you brought over some beer this time. They'll be the cheap guy, and and then boom, you're enjoying the game. You're hanging out with your friends. It's cost you virtually nothing, right, Like, that's one end

of the spectrum. Or you can be on the other end of the spectrum, right where you are forced to make these mandatory contributions to your school because they happen to have an awesome football program, and that gives you the option to then buy football tickets, right like the season tickets, which costs thousands of dollars. Sounds like a

rackett to me. Dude, it is a rackett. And then on top of that, parking and then the parking passes cost thousands of dollars, and and then on top of that we were just talking about cars, like a lot of people buy vehicles specifically for tailgating. Like how many car commercials do you hear where they talk about tailgating? Or that's the scene, right, there's some guys and they've got to pick up truck or the STUV and they're in the parking lot at a major stadium. Yeah, major

stadium or or or a college football stadium. Either way. There are just so many expenses that can go towards an interest or a hobby like that, but it doesn't have to It comes down to you. There's a reason why personal finance is personal. It depends on what you see as being a priority in your life. And we are here just to say be aware of these expenses.

Be aware of yourself because you know what, if you're not gonna be able to resist not getting the parking pass because you want to be able to hang out with your friends and throw that awesome tailgate, just know that it's going to cost you another three grand for that parking pass. In addition to the tickets. Right, yeah, man, it kind of makes me think. I think recently on an episode, I mentioned how if I kind of came

into some money, I might consider buying another bike. And yeah, right now where I'm at, I totally would not buy another bike. But I'm viewing my bike in a super utilitarian way right now, and I actually calculate how much my bike is saving me over using the car. So I'm thinking about it actually as not just a purchase that is for fun, but as something that can save

me money over the long haul. But if I was thinking about it in a different mindset, in this kind of like the I want this mindset, Yeah, the I'm a huge football fan. How much money can I spend on this mindset? Right? Then I would have four or five different bikes and I would be getting them maintained regularly by a local bike shop where it costs money, right and instead of like do it yourself little tweaks and fixes there. It's just a different mindset that goes

into play when you're making a purchase like that. And so whether you're a college football fan or a fan of golf or disc golf, whatever it is that you're into, there are ways to pursue that passion, and you know, keeping those secondary costs in mind at the forefront of the decisions you make and how you pursue that passion. Yeah, that's right. You don't have to get the whole kitten

caboodle to enjoy something that you have a passion for. Honestly, this makes me think of photography because for a lot of people, a lot of folks enjoy photography and they get a camera, and so a hard cost for photography might be the camera, because you've gotta have a camera if you are into taking pictures, right, But then there's all these lifestyle secondary costs associated with it that people kind of get roped into, especially with photography because a

lot of times, if you're into photography, you're into the gear, and so you get the bag to protect the camera and you get the lens flashes. I know all this

from experience. But if you're doing it as a hobby, right, if you're doing it just as something that you're interested in, you can enjoy photography on the cheap by just sticking with some of the basic stuff, or you can go freaking crazy and get all the stuff and before you know it, You've got like ten in glass alone, and that's photography speak for lenses, right, because but it's called

glass because that's what you're paying for it. Like, it's just expensive, expensive glass, and a lot of times it's so silly. And even photographers that do professionally, man, they get caught up in this sort of gear mentality and and just collecting and they just want to have everything match and for everything to all be the same. And it's not about function, it's not about the utility that it provides. It's it's more about emotions and what they

feel they need. And so being aware of that again is something that is important because it does not cost a lot of money to be in a photography It costs a lot of money to collect photography gear. Yeah, that's a big difference. So after the break, there's just a few steps, a few simple steps that people can take in order to make a wise choice when they're making a purchase so that secondary costs don't sink that purchase and make it a dumb one. We'll talk about

that in just a second. Let's get to the helpful and specific tips. Is it gonna be the things to remember when you're making these different purchases or some of these financial decisions, Joel, why you kick it off? Yea, So, Matt, I think the first thing to do is to have a little brainstorm session, right. You want to try to come up with as extensive of a list as you can of what cost you might incur based on that new purchase or decision, So home car, right, Like, some

of those things are straightforward. Some of those things aren't straightforward. The hard secondary costs are pretty straightforward when it comes to taxes on a tun Or house first, a Hudd fifty dollar house. Before the purchase. You have control over both the hard and the soft secondary costs once you make the purchase, right, those hard costs are baked in.

You can't really change them. So brainstorming and knowing what they are ahead of time will help you make an informed decision so that you don't take on more than you can handle. That's right, man. That's like the research and information gathering step, right exactly, that's right man. And so after you've gathered that information, the next step that

you want to take is to evaluate yourself. You need to ask yourself, will I be able to say no to these secondary lifestyle costs that are associated with the

initial purchase, with the primary purchase. And what's helpful I think too, man, is we've recently talked about talking with your friends about money, and we talked about the impact that your friends have on you when it comes to expenses and spending, because it's natural that you want to hang out with your friends, right, You want to be in community, you want to feel like you're known, and so you're naturally going to spend the same amount that

they spend. And so if you know all of your friends when they become uh SEC football fans, you know what that means to them, right, You know whether they go over boarder, whether they're super chill about Yeah, exactly. And so are you willing to say no, sorry, I'm gonna just show up for a couple of games. I keep saying football, right, I keep saying college football being football, That's what I mean, Right, I mean, you're being in football because we're Atlanta United fans and so and even

with us, Man, it's a temptation. That's the question I asked myself, and so for Kate and I that was a tough discussion and we talked about this on the Couples and Money episode where we had our wives on. But again just no, no, yourself, know your friends, and

just to be aware of the temptations and just be prepared. Yes, so you really do have to kind of know yourself and your tendencies and whether if you make the primary purchase you will be able to restrain yourself on those secondary costs, and then you need to do a cost benefit analysis. I think it's really important, right, Well, this purchase with all the primary costs and then all these secondary associated costs return what I'm looking for, what I want.

Something as simple as additional sales tax on a purchase of a television, or as large as an interest rate on a home or student loan can help you make the decision to buy it, to go to school, right, or to not do that. College is great, But if you have to pay interest on a student loan, like purely hypothetical, right, there's a much smaller chance that you're going to go to school. And in the same way. For instance, recently on a TV mat it was Black

Friday and there was this great deal. I've had the same TV for twelve years. I thought, you know what, maybe it's time for me to get a new TV. I saw the price. It was great. I factored in sales tax and just maybe it means I'm cheap. I don't know. We talked about frugal versus cheap, but in my mind it just didn't move the needle enough for me after sales tax to make the purchase. So I declined and I said, I'm gonna stick with my TV

for another year. And so a cost benefit analysis can just really help hammer home whether a purchase or a decision is worth it or not, and whether the benefit you're going to receive is equivalent to the outgoing costs associated with that move. And then finally, once you have all that information, once you've gathered that information, and then once you sort of analyze what kind of benefit is this going to bring to me? Is it going to

be worth the cost? Once you have all the information together, you need to act on that information. You do not need to sweep that sort of under the rug just because you want to emotionally make purchase that you know you shouldn't. Yeah, And that's the great thing about this matter, I think, is having numbers, having this process right so that you can't just emotionally sweep that something under the rug in order to make the decision that you want

to in your heart. These steps kind of help quantify it so that you're not doing that. Let's right. Knowledge is power, right, and having that information will help you to make a better decision. You don't need to be sticking your head in the sand and just ignoring all that's around you just because you want to do what you want to do. Having that information helps you to make an informed decision. All right, Joel, let's go ahead and get back to the beer. This is pretty Willie's

Imperial Stouts, and this is by against the Grain. Yeah, so this is part of their Staved For later series, you would explain what staves are. So staves are the wooden pieces in a barrel that's made so like the individual wooden slats that come together to form an entire barrel. And so this is a barrel aged Imperial Stout that the brewery wants people to age for a certain period of time. And so I got this beer over a year ago from my awsome I'm real estate agent, and

our mutual friend Matt Helen, both of our real estate agent. Yeah. Actually I was gonna say so in my story earlier where we met. It's coming full circle. Man, this wasn't at her house, Yes, yeah, that's Helen and Lee invited both you and Emily and me and Kate over to their house and we played. We played nerdy board games, and little did you know that was gonna be the beginning of how to money of a beautiful friendship, a fun podcast, and an amazing real estate agent Helen. And

so she's supersweet. She knows you know, our love for craft beer, my love for craft beer. And she gave me this fantastic bottle of beer as a closing present, and I have let it age for over a year because that's the intent behind this beer. And so we're drinking it now, excited to finally have pretty Willie's Imperial Stout. And Matt, both of us right at the beginning of the show, we each gave kind of one word to describe the beer, and this is a big beer. It's

a huge stout. Yeah, I'm feeling it for sure, and I'm not even done with mine. So the word I used to describe it was roasty. Yeah, you said roasty, And honestly, now that I've had a little more, I don't think it's like the best word. I don't think it's the best word to begin with. I felt like an idiot sending it, but I said it. That's a good word, So it's But I bet you're wishing you would have said jacket. Definitely not wishing that, definitely not

feeling that even at this point in time. But please tell us why you said jacket. Well, I mean I said jacket because as soon as I drank it, I felt like the texture of the beer before I tasted it, and it just felt like it was wrapping my tongue and like this nice winter coat full of like boozy warmth, you know what I'm saying. Like, when you have a bigger beer like this, you can kind of feel the booze on your tongue before you actually even taste it

with your I don't know your taste beds. And so for me, it was more of a texture thing because it's an Imperial stout, so it's a little bit thicker and it's got all the roasted and multi chocolate flavors in it, Which is funny because I think right after I said roasty, like an idiot, and the next word that came to my mind was warming, Yeah, because it truly does. It's bourbon barrel aged. It has a nice bourbon flavor going on, and it almost warms you, like on a cold day when you have a sip of

Scotch or bourbon. It almost kind of warms your insides just a little bit, sort of like you're wearing a jacket, sort of like a jacket touche. You win this one, sir, you win this battle, but you will not win the war. I guess jacket makes a little more sense now, um, awkwardly. So, Yeah, this was a delicious beer. And we always mentioned untapped on there though. You can kind of rank and rate the beers that you get to enjoy, and for us, it's a great way to keep up with the different

beers that we've had. Yeah, and so out of five stars, role, what would you give this beer? The great thing about on Tap two is that I feel like I can research beers to see what other people rank them before I make a purchase. And so you got pulled up. Don't tell me, don't tell well, let me rank mine. Let me rank it first. Okay, for me, this is a great imperial style. I think I might dude, I would even give this a solid four and a half stars. Yeah.

For me, it's a foreign a quarter, solid Foreign a quarter. It's a really good beer. It's solid, dude, I really like it. But there's nothing that stands out to make it epic, but truly refined. Very nice, Glad, I laid it down, Glad. We got to drink this together. Nice Foreign a quarter and the average untapped rating four point to eight. Oh perfect, We're right on the money. All right, Enough about the beer, Joel, It's time now for some

final thoughts. Kick it off, all right, Matt. So, just a reminder to everyone there are secondary costs involved with almost any purchase or decision that you make in life, and it is important to consider both the hard secondary costs that are immovable that are there no matter what once you make that purchase or decision, and also the soft oral lifestyle secondary costs that follow a purchase or

decision that you make. These costs to fall outside of the original purchase amount, right, and they can turn what seems like a good purchase on the front end into one that does not work well for you or your budget. That's right, man. And the process of the things that you want to remember when you're making these purchases or financial decisions. First of all, brainstorm, you want to come up with a lists of all the different costs, all

the different secondary costs associated with that purchase. Next, you need to know yourself, how are you going to respond to the soft or lifestyle secondary costs associated with that? Will you be able to say no when you feel those cultural pressures to get the next piece that matches whatever it is that you just got. Next, you want to do an analysis. You know, will the purchased item bring the joy, bring the benefit and the utility that

you're expecting it to bring in your life? And then lastly, you need to take all that information and you need to take action on what you've learned and what you've gathered. You don't want to sweep it under the rug. You don't want to stick your head in the sand. You want to take the next steps to either make that purchase or to not make that purchase based on what you've decided. So everyone, we appreciate you listening to this episode of the podcast. Be sure to check out our website,

how to money dot com up there. As always, we will have some show notes with some additional links and some more information that we discussed in this episode. Yeah, if you like what you here let us know. In particular, please leave a review on Apple Podcasts or wherever you're listening to the show. We really appreciate it, and don't forget to hit the subscribe button while you're there. All right, buddy, Until next time, Best Friends Out, Best Friends Out, Man