There are certain costs throughout our lifetime that can add up and become very expensive in the long run. Below are just some of the most expensive things that the average person pays for and how you can reduce the price of each of these costs.
Owning/renting a home is the biggest expense that many of us pay throughout our lifetime. On top of the mortgage/rent, there are all the other costs that can go into managing our home. For many people, this can come up to over 1 million dollars over the course of a lifetime. Home ownership costs have risen dramatically over the last twenty years. In fact, depending on which state you live in, home ownership can actually be 33 to 93% more expensive than renting. However, home ownership still has more freedoms (such as being able to renovate your home) and gives you access to funds that could be released during retirement (while rent is money you can never get back).
There are many ways to save costs on your home whether you’re renting or buying. The first is to always do your research before renting or buying – look into mortgage information online and consider prices in your area. Your location can have a big impact on your cost of living – the average property listing in West Virginia is $166,488, while the average property listing in Hawaii is $635,000.
When it comes to healthcare, the total amount the average American spends over a lifetime is sickening – overall men spend $268,700 and women spend an average of $361,200. A large amount of this money is on health insurance. Health insurance is something you should be continuously shopping around for. If you rarely ever need to see a doctor, it could be worth upping deductible to save money on your rates. Taking up a healthy lifestyle will also lower your rates and reduce your admissions to hospital later in life. It’s also worth shopping around for treatment to save costs.
The average American spends $240,000 on car expenses over the course of their lifetime. This includes purchase costs, repairs, maintenance, fuel and insurance. The type of vehicle you buy can have a big impact on the overall costs. Gently used vehicles are both less expensive to buy than new cars and more reliable than heavily used cars (i.e. less money spent in repairs). Fuel economy is also an important factor to consider.
Become a parent and you could spend an average of $233,610 per child. This is the total cost of raising a kid between birth and the age of 18 (and often the costs don’t stop after this). This is a cost that is often justified for many parents. Of course, you can spend less money by not being a spoiling parent – raise your kids to expect a lot of gifts and handouts when they are young and they’ll continue expecting more well into adulthood.
Ever wondered how much you pay in tax over a lifetime. The average American spends around $188,000 in tax. Tax is a cost that we can’t do much about – you might pay less by moving to certain states or by going self-employed (being able to claim you own expenses gives you certain privileges), but otherwise it’s something you have to live with.
A college education
A college education today costs an average of $30k per year. If you’re taking a three year course, that’s $90,000 you’ll be spending on higher education. This doesn’t factor in student loan interest. Some colleges are much cheaper. In fact, if you’re willing to study abroad, you could find that there are some places such as Germany where studying is completely free. An education can be a gateway to a higher paid job, so the money spent may be worth the money gained.