Finance, Simplicity

Beware of those Little Life Costs – They Add Up Like Crazy

“A millionaire is made ten bucks at a time” – Mr. Money Mustache

1. The Little Life Costs

Let’s call them LLC’s for short. Yes, and I know what you’re thinking: the world does need more acronyms.

They may not seem like much day to day, but when you add up the grande soy lattes and extra iCloud storage, they quickly compound into a huge bank account-draining monstrosity.

But you can resist their sneaky money-eating ways! Any time I consider a LLC, I quickly figure out what the total repeated cost would be over the course of a year. You can do the math quickly in your head right on the spot: if I buy three cappuccinos each week, that’s $12 a week, times 4 weeks is about $48 a month. That times 12 months is $576!

Sure it seems harmless, an occasional tasty $4 beverage every couple days. But that represents nearly $600 of my after tax dollars annually to partially satisfy my insatiable coffee addiction.

And that’s just one of many examples- let’s try a bunch of them together for some extra compounding impact:

– Lunch out 2x per week instead of making your own = $12 per week = $624 per year

– One item of clothing each month = $60 per month = $720 per year

– Getting rid of cable (ditch that antiquated commercial-filled box, the Internet has it all, for a fraction of the price!) = $60 per month = $720 per year

– Having lentils instead of beef for your protein 2x per week = $4 per week = $208 per year

– Not having that second beer at the Friday pub meetup – $6 per week = $312 per year

All of a sudden, dining out, the occasional sweater, cable, expensive meat and a weekly brew represents $2,578 post-tax-man dollars annually.

Now I like eating out once in a while, having a latte with amazing foam art, and occasionally satisfying my need to buy overpriced organic crackers at Whole Foods- but it just shows if you don’t pay attention to these seemingly insignificant costs, they can end up being a massive siphon of your hard-earned cash.

2. Automatic payments – a costly convenience?

Growing up in a pre-Paypal era, I remember watching my parents as they’d pore through a stack of envelopes after dinner every so often. Electric bill, cable bill, telephone bill, mortgage payment…each one needing individual attention, and each time, a conscious reminder of how much money you were forking out each month.

Fast forward to today: I don’t worry about any of that stuff! It’s all seamlessly set up to add to a long list on my credit card statement which I may or may not look at from time to time.

And companies like it that way. The most insidious are those ‘sign-up today for a free 30-day trial, just provide a credit card and cancel anytime.’ The hope is you sign up for that ‘Learn to Play Ukelele Master Class’ and totally forget about it. $30 a month starts to vaporize from your life until you remember six months later.

3. You gotta trim the fat, man.

Netflix, primo cell phone plan, some blind puppies charity that I got sucked in to last year (for good reason, really). That gym membership, Wi-fi, some productivity app that was only $3 a month. If I don’t make the effort to check through my statements these can get lost in the Mastercard abyss.

The one that most recently got the chopping block was my $10/ month chequings account fee! Both Andrea and I had one, so that was $240 a year paid to the bank. We switched to a no-frills credit union (which is better for the community anyway) and started sharing one account that’s pennies a month.

If you’re spending even just $30 a month you don’t need to, that’s $360 a year. I’ll say it again, trim that spending fat.

4. Car ownership costs way more than we think.

We live in North Vancouver, Canada, a fairly dense, walkable, bike-able and transit-friendly city, and not to mention car-share heaven.  Both Andrea and I ride our bikes to work, so it absolutely kills me that we have a 1-ton hunk of metal and glass just sitting there, costing us $4 a day in insurance and another $4 depreciating. It’s costing me $8 bucks a day (that’s $2,920 a year) before I even get in the driver’s seat!

I feel like I’m THIS close to selling our car and taking the car-free plunge, but the finances didn’t quite work out…we do a lot of weekend trips, and we have a dog which many car shares don’t allow.

But that’s neither here nor there. What I learned in my comparison research was how freaking expensive car ownership is. Many of the articles actually suggest we basically suck at understanding the true cost of car ownership.

Why? Because we’re forget to factor in things like depreciation, parking, oil changes, car washes and windshield wiper fluid. And let’s not forget: most people love their car so much it gets its own bedroom.

For my Canadian amigos, the Canadian Auto Association (CAA) website has a car ownership cost calculator. For the average person putting 20,000km on each year, they estimate (I selected a simple Honda Civic) a stomach-churning $8,800! And many families own 2+ cars.


For my fellow Mr. Money Mustache fans, this is truly the secret to being rich; it’s not the large size of your paycheque but rather the small size of your credit card bill.

Notice these LLC’s, cut the ones you don’t need, If you want more frugality tips, here are some more from previous posts.

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