What You Are Really Paying For

Pop.  Soda.  Fizzy caffeinated goodness.  Whatever you call it, wecoke-in-a-glass go through a lot of it.  Have you ever paid attention to the cost of it?  More importantly, have you ever thought about why you pay so much extra for that one quick bottle?

During a recent hotel stay, my wife needed a little caffeine fix to get her day rolling, so I thought nothing of going to the vending machine.  In fact, I was pleasantly surprised that it was only $1.50 per bottle – pretty good for being at a hotel where they seem to consider you a captive audience.  So I bought a bottle for myself too.

After all, if you go to a gas station, you are probably going to pay around $1.80 for that same bottle of soda.  With that kind of a price tag, we don’t even think about it.  We just grab the delightfully refreshing beverage and head for the register.  I don’t know your routine, but I’ve talked to a variety of people who do this at least once, if not twice a day.

So let’s pause here and do a little math.  I know; you’re thinking, “Really?  It’s only $1.80.”  That’s the price tag, but we are going to be brutally honest.  If you figure 6% sales tax, that bottle of sugar water is now costing you $1.91.  And if you make that purchase even once a day for the 5 workdays in a week, that’s a total of $9.55 a week.  Calculated out over a year, you are spending roughly $497 on your habit, albeit a legal one.

In the grand scheme of having a house, two cars, two kids, a dog, student loans, and everything else, $497 over the course of a year doesn’t sound like that big of a deal.

But WAIT!  There’s MORE!!!

I made a quick trip over to my local grocery store to check prices.  Like the gas stations, they have single, pre-chilled bottles right at the checkout for $1.89 plus tax.  But take just a short walk to the back corner of the store and you can buy your same sugary happiness in a 6-pack for $4.49.  Divided out, that’s a mere 75 CENTS per bottle.  Upon closer inspection, the bottles at the back are 24 oz. bottles while the singles up front are only 20 oz.  Buying a 6-pack in the back is not only cheaper per bottle, but gives you the equivalent of a free bottle in volume.

Let’s recap – you can buy single bottles of pop just about anywhere.  By making a short trip to the back of the grocery store, you can get it for half the price or less per bottle.

And now, the million dollar question – why would anyone pay DOUBLE the price for a bottle of pop?

I’m going to be a little brutal here, but I think the question deserves full honesty.  We as a culture (myself certainly included at times) tend to be a little lazy.  We are willing to pay double the price for our soda so that it is CONVENIENT.  Whether it is at a gas station because we don’t want to drive the 6 extra blocks to the grocery store, or we only want one bottle right now rather than a 6-pack, or we want it cold right now, we pay for the convenience of that single, cold bottle of pop.  No more, no less, no warmer nor frozen.  We want it NOW.

So now I’ve helped you cut your annual soda budget of $500 in half.  “Great!” you say.  “Big help there.”

But where else are you paying extra for convenience?

Why do we pay nearly the same price for a “deluxe” fast-food meal as we would pay for a much healthier meal at a sit-down restaurant?  Well, aside from occasionally craving a grease-bomb…  Because of the convenience of getting it in 3 minutes rather than 10 and not even having to get out of our cars to get it.

Why do people pay 3-4 times the regular purchase price of a TV by using a rent-to-own program?  Because we want it and we want it now.

credit-card-machineWhy do 1 in 4 Americans require credit cards to maintain their lifestyle when they end up paying 15% to 18% interest rate or more on those purchases?  Because only 2 out of 5 Americans is planning enough to put ANYTHING in savings right now, let alone waiting long enough to have cash to pay for said purchases.

We are paying for convenience.  Sometimes, I would argue, we are only paying for the APPEARANCE of convenience.

If you want to get some of that convenience spending in check, ask yourself one simple question – “Is it worth it?”  Every time you make one of those convenience purchases, ask yourself that question.

Sometimes that extra convenience cost really is worth it.  If I’m in a strange town where I am just stopping for gas on my way through and don’t know of any grocery store, I’m going to pay the extra 75 cents to just get the bottle of pop and go.

But if you are a regular soda drinker, is it worth planning ahead for one week at a time, hitting one more aisle at the grocery store and having your caffeine fix on hand?  Better yet, catch it on sale and stock up for weeks at a time.

How about planning ahead and taking lunch to work rather than just running out at grabbing something?

With a little awareness and planning, you can save some serious cash to spend on other goals and bills.

We like convenience.  With the understand that convenience usually comes with a price, we always have to ask if we are willing to pay for it and what else are we giving up in exchange for a moment of convenience.

If you would like some help getting your spending under control, the counselors at the Center for Financial Resources are here to help.  We’ve seen it all and can help with most of it.  You can either schedule an appointment online or call us at 605-330-2700 to schedule an appointment.

Go ahead and ask yourself – is it worth it?


written by Breck Miller
images courtesy freedigitalphotos.com




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