Not all expenses are created equal. Some things we buy and that’s the end of it. Like a cup of coffee. It’s just a coffee. Yet, other expenses are the beginning of a much larger more expensive pursuit. Those expenses are gateway expense.
Gateway Expense |ˈɡātˌwā ikˈspens| Noun – definition: an expense or activity that leads to larger and more frequent expenses.
How a gateway expense starts…
Take running for example. Running has become a gateway expense for me. What started with me running with an old pair of sneakers, has turned into a much more expensive hobby than I ever would have guessed when I started out.
Since starting to run, I found my shins started to hurt, so I bought some “Real Running Shoes” and all my shin pain was gone.
That was my gateway expense…
Not experiencing shooting pain in my legs at every step was incredible (up until then, I thought that running = pain). Those new shoes opened the floodway for more running expenses to make my runs more enjoyable. First came the socks, then special running pants, shirts, and shorts (can’t have chaffing).
Then it got cold and I bought more seasonable wear for my colder runs. All in all, this idea of running has cost me well north of $1000 maybe even $1500. It’s been over several years, but it still happened.
Here’s the point, running became my gateway expense to a lot more purchases. I’m not regretting it, but it does make me aware of this before I go diving into other types of endeavours.
What is a gateway expense?
A gateway expense, is any type of purchase that will lead you down the trail (I’m just gonna keep going with this running analogy…) to bigger and more expensive purchases. Or worse, recurring expenses that you wouldn’t have had if you had not bought the first expense. As it was in my case with the first pair of running shoes.
4 Big Gateway Expenses
So how can we tell if something is a gateway expense or a one-time expense? Like all magical answers: it depends.
Here are some bigger gateway expenses:
This is the biggest one of all.
A new home often means new furniture, new appliances, new carpet, new dishes, new everything. Usually we upgrade to bigger homes. Speaking from someone who has done this. More space only means more space to fill. Which means more stuff. So you end up spending more.
When you go from a two-bedroom home, to a three-bedroom house you have an extra bedroom (and likely another bathroom) to fill up.
This leads to what is commonly known in many urban centres as an Ikea trip. This trip is designed to furnish the extra room as quickly as possible.
While in reality, you were fine with two bedrooms. But nature abhors a vacuum, and the idea of seeing that open room only makes you want to fill it as quickly as possible.
A new home is one of the biggest gateway expenses there is.
New Sport or Hobby
Like I mentioned with running, an activity that should only need shoes that somehow ballooned into training for a marathon I will never run. Sports and hobbies are often huge gateway expenses.
It’s the reason I haven’t got new golf clubs since I was 12 ( my driver looks like everyone else 5 iron). Every year I entertain the idea, then I realize the $500 clubs are just the beginning.
Between golf balls, tees, shoes, green fees and practice, it’s not something I want my money (or time) going to on a regular basis. Like my friend warned me years ago:
“Golf is at least a $2000 start up if you plan on doing it frequently.”
Thanks I’ll run instead.
It’s the same for hockey, collection of memorabilia, learning a musical instrument and a lot of other recreational activities have a tendency to have us buy more, and move up the “bigger, better and more expensive” ladder.
Hey if you love it… that’s awesome!
Know that when you start something, the first cost isn’t the last cost.
Landscaping (or any other home project)
If you ever have a conversation that starts with: “We should do something to the yard…” run away!
Somehow laying down “some grass seed” immediately evolves into laying sod, building a patio, a barbecue, a pool (because you always wanted one). It’s pretty common for home projects to become gateway expenses. (He said while digging more holes for the plants they bought at Costco)
You get into renovation mode and then it becomes a bouncing ball of expenses.
I have had the “joy” of doing this with several home projects. Somehow changing the carpet in basement turns into taking out walls, adding a bathroom and a complete renovation of half the house.
This is the most dangerous type of gateway expense, because the costs involved are usually a lot higher.
At the risk of getting some blow back pets are another gateway expense. These lovable creatures always come with other costs in the form of shots, food, toys, pet sitters, vet bills (we once had a $500 dental bill) and chewed up clothing (sometimes yours and theirs… but mostly yours for some reason).
Having a pet is great, but realize that the humane society and the low initial price doesn’t mean that you are done.
There are more expenses to come, and they will keep coming for years. Most of us love our pets and it’s worth it, but you should know that there are a lot more costs to come. Of course you can always make money with pets, but that’s a different story all together.
How to cut gateway expenses
Try your best to think it through before you buy the first purchase.
I’m not saying any of these expenses are bad, in fact I would do a lot of these expenses al over again if I had to (except the $500 cat dental bill). However you should have an idea of what you are getting into.
Think it through a little farther than: “We should do this…”
What will the new dog cost in vet bills, food and time? Are you prepared to spend that much?
Is it really just a can of paint to freshen up that bedroom? Or will you need brushes, tape, drop cloths, then new sheets and accents to match the new wall colour.
If you get the new house are you able to say “Let’s wait” when it comes to new furniture and renovations? Prod your brain into thinking about other costs down the road. You may be surprised at the extra costs and you will have to pay.
Do you have gateway expense you would like to warn us about? Leave it in the comments below.
Why Family Money Plan Exists…
We’re dedicated to helping busy parents, who are stressed out about money, find their way out of the mess, by providing them easy action steps so that they can create a life they love.