Everything Comes at a Cost
Every day, we all willingly make compromises with regard to a variety of things. Many of those compromises we don’t even think about and may have simply become habits. Have you ever stopped to think about the ways in which you are making compromises and what those may “cost” you? This is a look at just some of the different areas where a lot of us trade something for convenience. And, sometimes, we trade more than one thing at a time. Let’s take a look at some of these areas.
Food and Drink
This is probably the biggest area where we all make a number of sacrifices and trade-offs, and typically without giving it much thought. Let’s start in the morning with “coffee and a bagel” or something similar. You could make that coffee at home for under $1 but you happily pay a vendor triple that amount or even more. And when you add in the cost of the bagel as well, your morning breakfast is costing you about $7-$8 (often times more) and you could have made it at home for about $2. A common reason for buying instead of making is “time”, but that doesn’t really hold up. It would take you approximately as long to make these items at home as it does for you to stand in line in a shop waiting to order and pay, and for them to prepare your order.
Lunch time is similar except that you are almost certainly sacrificing the “healthiness” of the food as well as the cost. Cooking at home and bringing leftovers, or even making a simple sandwich to bring, is significantly less expensive than the $10 plus you’ll spend to buy lunch, but it also comes with at least a lot more control over the levels of things like saturated fat and salt. If you are also buying dinner regularly, the costs go up even more simply because it’s dinner (not because the food is higher quality or costs more to prepare) and the portion may be a little larger.
Another area where many people trade cost for convenience is in what I will call “portioning” or sizing. Instead of buying the package of individual bags of chips to take with lunch, buy the large bags and put a portion into a zip-top baggie instead. All of the additional packaging for the individual sized bags costs money and they are also charging for the convenience of having them pre-sized. The same is largely true for things like meats which can be purchased in “family packs” where you will pay less per pound as a trade-off for buying more of the meat at once. Go ahead and buy the larger quantities and split it apart at home and freeze what you don’t need right away.
Transportation
Do you commute to a specific location for work? How do you get there and get home? And how much does it cost you? If you drive your own vehicle, you want to consider the cost of the vehicle itself, insurance, registration, taxes, fuel, wear and tear / maintenance, parking costs, tolls, etc. Do you have options for public transportation that would reduce some of those costs?
How often do you drive for other reasons? Does public transportation provide what you would need here? Could you use ride-share or rent a vehicle for the now-and-again occasions when you genuinely need a vehicle for a longer drive or similar? What’s the total cost of everything that way?
Internet Service
Do you have an Internet Service Provider for your home? Who is it, what speeds are you paying for, and how much are you paying? Are there other services available that are cheaper for similar service? Have you watched your bill increase year after year and felt like there was nothing you could do about it?
When we bought our house about three years ago, we had three options available for Internet service – Cox (via cable), Frontier (via cable), and Frontier Fiber (via fiber optic). We opted for Frontier Fiber and selected their 1Gb service due to the overall “package” (the price, it included a router, it was symmetric service, and it was fiber-based as opposed to cable). Over the three years of service that followed, we saw multiple price increases and multiple changes / reductions in discounts. At the end of three years, the monthly cost represented about an 85% cost increase from the original price and it was based on absolutely nothing except Frontier changing the cost model.
We are a two adult household with one person working in the home and one working outside of the home. We could easily get by with 100Mb of service (10% of what we actually had) and we had zero appetite to continue to pay the ridiculous prices that Frontier was forcing on us. So, I called them and asked to speak with someone that could help me decide whether I would be able to remain a customer or would end up needing to cancel. I provided them with information on other services in my area and even their own “new customer” promos that would be acceptable for our use. After about 20-25 minutes on the phone, they changed our service to 500Mb/500Mb (half of what we had) and cut our price to 20% below what we were paying three years ago.
Most households are paying for significantly higher levels of service than what they actually need simply because the providers have done an exceptional job of convincing all of us that we need these exceptionally large service levels. Here are some things to understand about bandwidth needs:
- Email and web browsing need “almost nothing” in terms of bandwidth. Apps and sites like Facebook, Instagram, TikTok, and similar where there is or may be video content will benefit from some small bandwidth amounts, but even these are going to operate fine with 5-10Mb of service.
- Streaming (including YouTube content of all types) generally do not exceed approximately 20Mb per active device. Three different devices watching content at the same time will require somewhere between 50-60Mb of total bandwidth.
- Gaming generally doesn’t need high amounts of bandwidth but does benefit from low latency. Downloading game content itself may benefit from higher bandwidth amounts during the download itself, but generally not during game play itself.
Most households would generally be perfectly fine with 100-200Mb of service for at least most of the time. There are some other pieces that may factor in, so keep some of these things in mind as well: for cable Internet services, you may want to leverage whatever service level gets you at least 10-15Mb of -upload- speed. Satellite, 5G, and cable Internet services may benefit from a 25-50% bump in service level simply to allow for the shared medium and burstability pieces. For symmetric fiber services (same upload and download speeds), the various speeds and numbers mentioned here will hold true.
Streaming Services
How many streaming services are you actively subscribed to? Why?
The Why is important here because streaming services are supposed to be built in a way for us to easily jump on and off, starting and stopping (or pausing) the service based on our needs. If you have Apple TV, Netflix, HBO, Paramount, and more all at the same time, the question is why? Are you actually watching all of those at the same time? Why couldn’t you cancel Netflix and come back three or six months later after your favorite shows have launched new seasons and you can get all caught up in 30 days? Similar with the other services? The answer is that you’re leaving all of them subscribed because it’s “easy.”
Insurance
When is the last time you shopped your various insurance policies? If the answer is anything more than six months ago, you are almost certainly spending more than you need to. Bundling multiple policies together with the same carrier is a way to get the best discounts on all of the policies, so moving just one policy elsewhere may not ultimately save money. But, there’s no reason you can’t shop this around every six months, especially if what you find is that you are getting good rates already.
Here’s a little hack with Progressive Insurance that might help you out if you are a customer: Shop your auto policy with them every six months and do it by requesting a brand new quote as if you were not already a customer. Use a browser that supports something like In Cognito or In Private browsing and go through the process of requesting a quote as if you were a new customer. Be sure you use all of the same deductibles and coverages and compare the end result to what you’re currently paying. After a number of years of having their coverages for multiple vehicles, I was able to reduce my auto policies by about 25% by re-quoting and starting a brand new policy with them instead of renewing the existing one.
Another are where you may be trading convenience for cost with insurance is monthly installment billing. Paying the entire policy up front at the start of the coverage period almost always provides a significant discount versus installment billing. If you have the means to pay the entire policy at the start, look at the cost of doing so versus paying monthy over time.
Just the Beginning
These are just a few of the areas where many of us have the option to trade something for a level of convenience. Which ones have given you something to think about? What other areas do you encounter where you have a choice of cost versus convenience? Let me know in the comments!