Home / Stuff costs more than you think

One tip I picked up from reading many personal finance books is: stuff costs more than you think.

As “Finances for Dummies” put it: $300 TV really costs $450.

What that really means is that to buy $300 TV you have to earn $450. Around $150 of it will be taken by taxes.

The difference is really illusionary. It’s result of the fact that we tend not to think about taxes (and other unpleasant things in life) but that’s exactly the point.

The only way to financial freedom is to spend less than you earn and keeping in mind that stuff costs more than it appears to cost can only help in curbing the expenses. After all, maybe you don’t need this $30, I mean $45, book and can borrow it from the library?

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