Avoiding financial death by 1,000 duck bites

By | 12th June 2017


There is another area that can catch people out when it comes to expenditure – when a number of expenses are separated and not considered together.

Individually the amounts are small, but when combined into the true picture you can find that it could be death by 1,000 small bites!

Whilst someone may have a figure in mind of what they think they are spending, once everything is actually added together then that one final total true figure can come as somewhat of a shock.

This can apply to many areas, but two good examples are cars and holidays.


Say you are considering a new car, perhaps a typical family hatchback.

You have seen a lease advertised for only £295 per month, which seems reasonable and something you could ‘afford’.

advance payment: That £295 for two years isn’t actually the total you pay, there is an additional advance payment of 6 months rentals. So that’s another £1,770 you may not have realised.. and perhaps a £200 admin fee too. Total £1970 or £82 per month on top.

insurance: Your car will need to be insured – the UK average is £462 a year or £38 a month.

mileage charges: That £295 cost you saw was based on 8,000 miles a year – if you are actually going to do an average 10,000 miles a year it increases by £10 a month. The advance payment also goes up by £60 or £3 a month. Total £13 a month extra.

fuel: Your car will need fuel. While the official mpg might be 55mpg, real world driving means perhaps 42mpg. So at 10,000 miles a year that is 238 gallons per year, 1082 litres at £1.30 per litre that’s £1,406 per year or £117 per month.

servicing: With a new car you aren’t likely to need to spend much on this – you should get the full two years and 20,000 miles on the original tyres. Under the terms of the lease you may be required to use a main dealer for servicing though. You may need a minor and then a major service before the car goes back – say £500 for the two, so £21 per month.

end of lease fees: While reasonable wear and tear are to be expected and allowable, you are liable for any additional costs such as car park dings, excessive stone chips and kerbed wheels. This will vary – but figures seem to vary around the £300-£600 mark. If we take a conservative £360 then that is another £15 per month.

Adding up all these expenses comes to a real actual total of £581 per month – somewhat higher than the ‘£295 a month car’ you had in mind!

Nearly double the cost you had in mind to start with.

(If you do go for a lease then perhaps you may want to also save up all the payments in advance for the lease term, so you don’t have a large debt hanging over you in case of problems. People may not realise that you can’t just hand it back in times of trouble, without paying the rest of the rental payments.)


Say you are considering a ‘budget’ holiday to Orlando, Florida for a couple of weeks.

The flight and hotel package might come to £1200 each based on two sharing a room and enduring economy class. Even so, that is a considerable amount compared to what you can achieve within the UK, but you might think that a £1200 holiday is within reach of saving.

However, that isn’t the true cost as there are many smaller extras to add to get the true total cost:

car hire: for two weeks is £350, so £175 each. You’ll also need fuel, say £80 so another £40 each. Perhaps some freeway tolls too, say £30 so £15 each. Total £230 each.

hotel ‘resort fee’: While you may think that you have already paid for the hotel, many have an additional daily fee to cover things such as parking and their gym, etc. This isn’t optional in many cases, so can be an unwelcome surprise when checking out. Typical fees are £15 per night, so that’s another £200 total or £100 each.

theme park fees: while you are there you may want to visit the two big chains of parks plus maybe the space centre. A two-week pass will cost you £700 each.

theme park parking: You may also think that you have already paid for the theme parks, but there is an unwelcome surprise waiting for you at the car park… a £15 a day charge. So that’s another £200 or £100 each.

food and drink: You will want three meals a day plus drink and snacks. Even bottled water has a significant cost. If you avoid the more expensive restaurants you are probably still looking at £600 each.

parking/transport to the airport: You will need to get to and from the UK airport – either driving and parking or taking a taxi. Say £50 each.

USA travel insurance: While European cover is fairly inexpensive, you will need USA cover as their expenses can be much higher in case of problems. Say £75 each.

Adding up all these expenses comes to a real actual total of £3,055 – somewhat higher than the ‘£1200 holiday’ you had in mind!

Nearly two and a half times the cost you had in mind to start with.

Beware the ducks

When looking at major purchases it is important to consider all the costs beforehand and come up with the true final total before going ahead.

James McBrearty started his own business from scratch in 2006, to help the self-employed.

He helps people to escape from the corporate world and shares his thoughts here on the changing world of work, technology and personal finances; as well as the occasional travel post.

Over the next 10 years things are going to change significantly. James is a follower of frugality and minimalism; and an advocate of F.I.R.E. to minimise the coming disruption.

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