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The future cost implications of your purchases

What you need to consider to avoid buyer’s regret.

If you’re tightening up your budget and trying to cut costs, you may be regretting some of your past purchases – especially if they continue to cost you money every month. When making large purchases, we very often fail to take into consideration the future costs of the purchase, and it’s in times like these that these costs can come back to bite us. Let’s have a look at the future associated costs of some purchases.

Cats and dogs

Owning a dog or cat can be an emotional and financial commitment of up to 20 years, and many people tend to underestimate the costs of owning and caring for pets. Over and above of the cost of a pet, it’s the ongoing food, medical and associated costs that should be factored into your budget, together with not-so-obvious costs such as parasite control, x-rays, treatment for skin disorders and kennelling costs.

The long-term costs of owning a pet are difficult to quantify although they can run into tens of thousands of rands over the lifetime of the animal. Puppies need to be vaccinated at 6, 8, 12 and 16 weeks of age, and then again at 12 months, and all of these veterinary appointments cost money. In addition to vaccinations, a dog requires deworming, pet identification and even micro-chipping at a cost of around R450. All the costs of owning a dog add up and can include items such as blankets, beds, kennels, bowls, leashes, muzzles, collars and toys.

Where a dog is fed a raw food diet, expect to pay around R40 per kilogram of food. For top-end dry dog pellets, you will pay around R850 for a 12 kg bag, with these costs increasing as the food becomes more specialised, for instance, low-fat options and pellets for joint health. External parasite control is also expensive, with tick and flea tablets retailing at R380 for a large dog which needs to be administered annually.

Vet consultations are around R400, x-rays can cost around R700, a course of anti-inflammatories around R500 and anti-biotics about R400. Although a once-off expense, neutering and sterilising should be factored into your budget and usually costs between R500 and R2 500 per animal. Puppy and socialisation classes cost anywhere between R60 and R80 per class, while grooming costs about R180 for a large dog.

If you are going away and need to kennel your dog, expect to pay between R110 and R180 per day for a large dog. The pet healthcare industry has expanded and many ailments that afflict dogs can be treated with alternative therapies including water treadmill therapy, laser therapy, acupuncture and even homoeopathy. With rising costs of veterinary care, many pet owners opt for pet medical insurance with costs in the region of R170 per cat and R320 per dog, with a minimum excess of R350 per event.

Smartphones and devices

Another purchase which can have knock-on effects on your finances is your smartphone, and it pays – literally – to do your research beforehand. Importantly, give careful thought to what you use your phone for before simply upgrading to the option that looks the nicest. Monthly contract fees vary greatly depending on the brand of the phone and its specifications, so think carefully before committing to another 20-month contract and the associated costs that come with it.

Contract price comparisons from a major cell phone provider’s website reveal that an entry-level iPhone 11 Pro with 3GB of data per month will cost R1 299 per month. A Samsung Note 10 lite with similar specs and the same amount of data will cost R799 per month, while a Huawei P30 lite will cost R499 per month, and a Huawei Y7 R399 per month. A brand-new iPhone 11 will cost you around R15 000, whereas the top-of-the-range iPhone 11 Pro Max can cost R32 000 – which, if put into perspective, is about half the cost of a year’s university tuition.

Over and above the costs of the handset, buying more expensive phones means that you will also be paying higher monthly insurance premiums and possibly a bigger excess. More expensive smartphones, such as iPhones, generally come with higher-priced accessories including items such as charging cables, air pods, covers, screen protectors and other wearables. Compatibility issues might also result in you having to incur costs on special adaptors, and repairs to the device generally cost more as well.

Overseas travel

As much as one tries to contain costs, travelling overseas always costs more than one budgets for, no matter how careful the planning. Despite an array of flight specials and many budget travel options, travelling overseas from South Africa is expensive – even if you intend travelling to one of the more ‘affordable’ destinations such as Bali or Croatia.

Mental accounting may lead you to believe that discounted flights and Airbnb accommodation will result in a ‘cheap’ overseas holiday, but this is not always the case. Upfront costs can include the costs of visas and other travel documents which vary from destination to destination. A Schengen travel visa currently costs R995 whereas a US travel visa will cost about R3 500 for a single person. If your visa applications are not processed in time, you may also need to factor in the cost of rescheduled flights, accommodation, tours, cruises or excursions.

Travel insurance is always advisable, but again, comes at a price – with travel insurance for one person for a week in the UK costing about R550. Without comprehensive travel insurance, you will need to consider the financial risks of lost or stolen luggage, missed flights, travel scams, or damage to your belongings. If the Covid-19 crisis has taught us anything, it’s the importance of taking out good travel insurance. Countless South Africans have lost enormous amounts of money on uninsured flights and package holidays.

Airport taxes, gifts, shopping, extra luggage and luggage wrapping should also be taken into account when preparing your travel budget. Once you’ve arrived at your destination, it’s difficult not to spend money seeing and doing all that the country has to offer. Tourism is a massive global industry and an excursion is likely to cost you money. A one-day adult pass at Euro Disney costs R1 500, a ticket for Madame Tussauds costs R700, and a ticket for the London Eye is R780. Excursions at more affordable destinations, such as Bali, will still cost you money – with a one-hour surf lesson in Sanur costing around R450 per person. A one-day boat trip on the Great Barrier Reef will cost R2 500 per adult, while a long-board rental in the Maldives will cost about R500.

Croatia, also considered a more ‘affordable’ destination by South Africans, is still pricy when it comes to food and transport, which are 30% and 39% higher than in South Africa according to Expatica.com. Similarly, food prices in Portugal are higher than our country, with the equivalent of a Big Mac Meal costing around R107.

School

Choosing a school for your child has multiple, long-term cost implications for you as a parent. School fees aside, there are several other costs and considerations that should be taken into account – bearing in mind that your child’s school career will span at least 12 years. Without going into the merits of government versus private schools, it’s common knowledge that many private schools in South Africa are significantly more expensive than their counterparts and it is essential to do your homework before enrolling your child so that you fully understand what it will mean for you financially in the longer-term.

Many private schools charge non-refundable deposits, placement or enrolment fees, building levels and/or capital development fees which are in addition to the monthly school and/or boarding fees charged by the school. For instance, one Durban-based private school charges R12 500 placement fee while another school charges a once-off, non-refundable enrolment of R31 445 per child which is used for future capital projects. A Cape Town-based private school charges an annual building levy of R6 000 per child, plus additional fees for art and music, as well as a R215 sports levy per season per sport. A Johannesburg-based private school charges an annual capital development fee of R4 300 plus a non-refundable entrance fee of R29 100 per child to be used for future capital development.

Enrolment for A-level subjects costs about R4 500 per subject taken, while music lessons start at R350 per hour. It is naïve to believe that there is no pressure to compete in these affluent environs and this, in turn, can impact on your pocket. Many private schools provide a range of on-site facilities for their learners including travel agents, hairdressers, stationery shops, as well as health food outlets. A local health bar which has sites at several schools throughout South Africa sells fresh sandwiches for around R30, a small smoothie for R40, salads for about R36 and a Grapetizer for R27.

Dances, functions and matric balls can set parents back tens of thousands of rands with costs including custom-made designer gowns, hairstylists, nail technicians, designer shoes and tuxedos, pre-drink and after-party event planning, limousine and helicopter hire, professional photographers, make-up artists and jewellery. Sporting, cultural and music tours, overseas excursions and school camps can add to the costs.

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