Typically good debts refer to student loans, business loans, and anything resulting in your general betterment. Bad debt includes all of life’s temporary luxuries.
There’s another side of debt many people don’t often consider. Not a separate group, it’s more a subcategory to both good and bad debt .
What I’ll call the “Convenience Tax” refers to our preference towards making things easier. Not completely unwarranted, with the technologies available this day in age, why would you go out of your way to make yourself uncomfortable?
Because these conveniences are adding
unnecessary debt to your balance sheets.
Before we go further, recall the ongoing debates between the colloquial phrases: “Sweating the Big Stuff” vs. “Sweating the Small Stuff”.
There are those who believe you should only focus on reducing the larger expenses, and then those who believe you should carefully monitor ALL expenses, no matter how small. Personally, I believe focusing on the big ticket items will make the largest dent in your debts, but I don’t want to trivialize the everyday charges either.
The point here is not to discuss denying yourself pleasures or living like previous generations did, but to realize that we’re paying a premium for convenience. And the unfortunate part is that only we are to blame for self-imposing this “Convenience Tax”. We’re stealing from ourselves because the tax enforcer (us) is not the same as the tax collector (service provider).
Why take public transportation when you can take a cab, why pickup your food when there’s delivery, why go out for a rental when you can order OnDemand, or why send regular mail when you can send it next day?
No one wants to struggle, but how much convenience do we really “need”? It seems that people justify these expenses by calling it a need. The most common qualification you hear is:
“I need this because I don’t have the time”.
Really, it’s a sense that if something is available to us, we should capitalize on it. In a culture were creature comforts are king and any discomfort should be quickly dispelled, we lose focus on how much we cost ourselves per year.
Washington, DC recently implemented a $0.05 charge per plastic bag at grocery stores. I won’t go into the details or advocate/dispute the legislation, but instead use it as an analogy for how accustomed we’ve become to “convenience”. There are two components here – the convenience to the bagger and the convenience to the shopper.
Next grocery trip, look at how many bags you receive. Sometimes we can end up with 2x as many bags as groceries! That’s because the “convenience” of throwing random items together in a bunch of different bags far outweighs the time it would take the bagger to carefully sort and load the items into a limited number of bags.
If I only have a few items, I’ll forgo the plastic bag. “Don’t worry about bagging these”.
While this absurd request is being processed, I usually get a blank stare, followed by a concerned “Are you sure”? It’s almost as if I just told the clerk I planned to walk across some hot coals barefoot.
“Yeah, I think I can manage the gallon of milk and carton of eggs”.
I decided on this example because of the irony. It could not be a more perfect illustration of my “Convenience Tax”. One could easily avoid the $0.05 charge simply by bringing in their own bag. It doesn’t even have to be a “green” reusable bag, it could be your own plastic bags! But how many people will end up paying this unnecessary charge?
The challenge I’ll proposition you with is this. Next time you convince yourself something is easier, quicker, better – go through these simple questions:
- What will be made easier? Cab Example: Are you taking a cab because you’re late for a business meeting or meeting friends at a bar?
- How much easier will it be? Cab Example: Is the train/rail/bus running 20 mins late or are you taking a cab to arrive 10 mins earlier?
- How much more will it cost? Cab Example: Will the cab cost you $20+ to go somewhere the train/rail/bus can take you for $3?
In a world where many people still don’t have stable electricity grids, clean running water, or reliable health services – don’t be afraid to challenge your notion of “convenience”. The only benefactor will be yourself, and your goal of debt elimination will be your reward.
Photo by Ben Golub