Saving Money - $ 100 per hour to Swim?

If you are interested in saving money on the things you buy, you must start by being honest about what they really cost. Let us look at an example of what this means. 

Saving Money On The Swimming Pool

Jeff and his wife loved idea of having a built-in swimming pool behind the house. It seemed like a good way to improve the house and a great way to relax on hot summer day afternoon. They went almost every week for the sports complex to use the pool for $ 7 each, so they would be saving money at it too. They agreed with their logic. 

The first quote they got was for $ 48,000, including all the tile work around it, and finishing touches. But they were smart enough to get two more quotes. The next was close to the first. They finally found a company that would do it for $ 40,000. 

Refinancing of the house, they withdrew $ 40,000 in equity and had a pool put in. They did spend another $ 2,000 for extras they wanted, but above all they were very satisfied with the way it turned out. That first summer, they used it almost every night for two months. The second summer, they used it so often, and grew a little bit tired of the work it involved. There was chlorine monitoring, filters to change blades, which were cleaned out. 

Jeff did most of the work himself to keep costs down. Nevertheless, it cost them over $ 800 per year for heating, treatment and care of the pool. The tension was gone by the fourth year when they realized they had used the pool only eight times that summer. To save money, they stopped heating it when they were not using it, but it meant that it was difficult to use spontaneously (it takes a long time to warm up a swimming pool). 

After five years, Jeff got a new job and they had to move. Cleaning and repairing the pool cost $ 1,000, but it seemed necessary to get the house ready to sell. This, together with the $ 4,000 in annual costs over the years, amounted to $ 5,000 for the time they had pool. Then there was the $ 14,000 in interest they paid during the five years on the money they borrowed to put the pool (7% annual interest). His wife was a bit shocked when Jeff showed her that it had cost them $ 19,000 for use of the pool for the last five years. 

They were also disappointed to learn that the pool does not add much to the value of the home as they had hoped. People like pools, but a $ 40,000 pool does not necessarily make them willing to pay $ 40,000 more for a house. Their real estate agent figured that swimming pool adds about $ 20,000 to the market value of their homes. Sure enough, their home is sold for only about $ 20,000 more than an equivalent down the street who do not have a pool. 

Reflecting back on their "dream pool" Jeff began to wonder. Seated in their new home, he took a pen and a piece of paper and began to put the times they and their friends had been swimming in it. He thought the pool was actually used for anything 400 hours during those five years. Adding up the cost of maintaining the pot ($ 4,000), repair costs ($ 1,000), interest costs ($ 14,000) and capital loss ($ 20,000) and additional material they purchased ($ 2,000), he arrived at $ 41,000. He shared that with 400 hours. 

"$ 102 per hour," he explained to his wife. This is what the use of the pool had cost them. And they thought they were saving money by not paying $ 7 each to use the pool at the gym. Looked at another way, they could have gone to the gym each week and paid for a week's vacation to Hawaii each year for less than what they were wearing. But looking at it that way too depressing, especially when Jeff thought the time he had spent cleaning and care of this pool. 

This is an example of why saving money does not just require good shopping skills. It also requires a good look at the true costs of the things we buy and do and an honest assessment of whether they are worth. There is usually less expensive alternatives that are equally satisfactory.