Money on the Brain: Be sure to know what something costs before making the purchase

When was the last time you bought something without even looking at the price?

Doing this on a regular basis can cost you a lot of money in the long run.

Recently, I went to the store to get a gallon of milk. As I was in the process of grabbing one off the top shelf, I glanced at the price. It was $4.

Thinking that was pretty expensive, I paused and looked at the milk on the shelf directly below it. It was priced at $3. “That’s better,” I thought. But I looked one more time – the milk on the bottom shelf was $2.25.

It was generic, but the same type of milk. I can’t tell any difference in the taste of name brand milk and generic, so I put the most expensive gallon back and grabbed the cheap one, saving $1.75.

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The same thing happened in the next aisle where I went to get some tuna.

Since I was in a hurry, I almost grabbed the first can of tuna I saw, which was the “solid white” canned tuna.

The reason that’s important? When I stopped to compare the prices, I saw that solid white tuna is almost twice as expensive as the regular tuna.

Regular tuna is fine with me, so I made the switch, saving me more than $3 in the process.

Sometimes, to save money at the store, all you have to do is open your eyes.

With higher priced items, however, it can be much more difficult to figure out how much you will pay.

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Consider cell phones.

Verizon and the other big cell phone companies are marketing geniuses. They make it difficult to even find the total cost of their expensive phones. Instead, the big fat number they put in front of you is the low monthly payment you’d need to pay.

Want the new fancy iPhone 13 Pro? Forget about paying hundreds of dollars for it, you can have it for only $27.77 per month!

The phone companies are betting it will be easier to convince you to pay $27 per month than it would be to get you to plunk down $1,000 all at once. And they’re right, for the most part: Apple alone has sold more than 200 million smartphones in five of the last seven years.

The next time you shop for a phone, first determine how much you’re willing to spend- $400? $500? $800 or more? Whatever your number is, find a phone that is within your budget.

Don’t get caught up in the monthly payment. Twenty dollars a month isn’t that much, but if the total cost is several hundred dollars more than you wanted to spend, keep looking.

Determining the total cost for a vehicle can be equally as difficult, though for different reasons.

Let’s say you’ve got enough in your budget to buy a car for $18,000. You find one you like for $17,900. Great!

But don’t forget to account for sales tax. And registration and title fees. You might also have to pay a documentation fee.

The biggest hidden cost for cars might be the interest you’ll pay if have to borrow money.

By the time you add up all these extra expenses, it’s likely you’ll pay $20,000 or more for your car that was priced at $17,900. If you’d only budgeted $18,000, this could be a problem.

When it comes to calculating the total cost of a purchase though, houses can be the worst.

The house that has an advertised price of $160,000 will end up costing much more than that.

The mortgage calculator at Bankrate.com says if you take out a 30-year mortgage for a $160,000 home (5.41% interest) after making a 10% down payment, the total cost 30 years later will be $291,692.36.

By the time you add in the cost of other expenses such as application and appraisal fees, closing costs, property and transfer taxes, and private mortgage insurance, you’ll probably have paid more than $300,000 for that $160,000 house.

So, when making a purchase, first take a look at the price tag. For more expensive items, you may need a calculator.

If the total cost of the item is within your budget and it’s worth it to you, then great. Go ahead and buy it. If, however, the high price surprises you and you don’t want to spend that much money, then it’s simple – don’t buy it!

Resist the urge to spend and borrow more money to make the purchase. Simply wait and look for a better deal.

Dave Kinzer is a music teacher and a financial coach in Springfield. Contact him at www.davekinzer.com. His column will appear here every other Wednesday.

This article originally appeared on State Journal-Register: Be sure to know what something costs before making the purchase