Determining the total cost of any thing isn’t something that we, as human beings, are automatically good at being able to figure out.

At RailsConf 2012, Rich Hickey is recorded saying that:

Programmers know the benefits of everything and the tradeoffs of nothing.

This is a reconstruction of the Oscar Wilde quote but as applied to programmers.

Lord Darlington. What cynics you fellows are!
Cecil Graham: What’s a cynic?
Lord Darlington: A cynic is a man who knows the price of everything and the value of nothing.
Cecil Graham: And a sentimentalist, my dear Darlington, is a man who sees an absurd value in everything and doesn’t know the market price of any single thing.
Lord Darlington. You always amuse me, Cecil. You talk as if you were a man of experience.

• Oscar Wilde, Lady Windermere’s Fan

As programmers, we do get excited by technology and conventions and ways of doing things. And we are really bad at considering the total cost of the things we put into practice.

Hickey’s talk is about simplicity and complexity... not prices and total cost. He describes complexity as things being interwoven and simplicity as things being independent of one another.

We are staring at some universal truths here: Total cost is harder to determine when things are interwoven.

What follows is a collection of vignettes (or drive-by-shootings if you prefer) on examples of hidden costs I notice when I look around at my life.

Credit Cards and Cash

Total Cost of Ownership is behind my reduced use of credit cards.

The 2-3% transaction fees are really hard to perceive. They are built into the prices of everything these days. Because it is built into the price, people who pay cash end up paying toward those expenses even when they use cash (exceptions go to those places that post a different price for cash transactions).

Part of the cost is also in habit-formation. Rewards programs want you to swipe as often as possible. And rarely do we stop and ask questions like these:

• Do I spend more carelessly with a credit card?
• Am I less able to notice how quickly the total grows?
• Is it easier to notice how quickly my wallet shrinks if I use cash instead?

And, finally, for those of us who use credit cards to borrow money. OH. MY. GOSH. Paying the finance charge each month is loss of money for no reason and if you don’t pay enough to reduce the principal balance, your debt will grow and compound.

Here is an attitude to internalize: You don’t have to borrow money from credit card companies. EVER. If you’re carrying a balance month-over-month, you can be certain that your life would be improved if you cut up your credit card and pay down the balance as quickly as possible.

Cash is simple. It is crude. And it will help you to manage your money better. And it will never become a compound debt.

Vehicles: High Price, Tendency to Rot, Maintenance Cost, Societal Cost

Vehicles rot when they sit there. They bake in the sun. The batteries die. Water separates from the gasoline and the tank may rust out. Tires may become warped from sitting too long.

The cost of a car (or motorcycle), especially any vehicle beyond a single car, is that you must operate it from time to time.

The total cost also includes paying insurance premiums, property tax, registration fees, and the costs to keep inspections current.

Depreciation is a cost we know well but spend a lot of time trying not to think about. It only matters when you try to sell the car so people who drive a vehicle until it is not maintainable have an advantage.

The cost to maintain roads and parking lots and to police the streets is a huge hidden cost that we don’t think about very often because it is something that is “provided” by the government. There are economic costs and ecological impact that are difficult to fully comprehend.

The Free Internet’s Costs: Time, Privacy, and Fraud Risk

Facebook.

Oh, Facebook. We spend so much time on you. We feed you. And you give us less and less and less.

We pay nothing for Facebook. So it seems like it’s free. But it takes enormous amounts of time and entails large-scale habit formation.

Like Google, they have gotten into the business of selling our attention in a very targeted way with an understanding of our likes and interest. Free isn’t free. It never was and never shall be. It’s either paid for by you or paid for by someone else. There are NO exceptions.

Google and Facebook are paid for by advertisers. Wikipedia is paid for by donations. Advertisers seek to modify your behavior for their profit. Which of these will do less harm to your long-term interests?

The question is whether you want to accept the trade when you consider the total cost.

Some free services from Google have also been phased out. You may spend a lot of time to adopt a free service only to find out that the service provider is not going to provide the service any longer. Free isn’t free. It never was and never shall be.

Mint.com offers you deeper insights into your finances. The price is "free" but they use your financial information to sell you financial products. It also requires a login to all of your online financial account so that they can acquire your monthly statements. Part of the total cost is your increased exposure to risk of having your accounts compromised by others.

Applying This Broad Mind to Everything

Getting yourself into a practice of seeing what is not easy to see is a hard trick. Not only are there hidden costs to things, there are hidden benefits.

Things That Have Hidden Layers of Cost

Really, just about anything we can look at has a hidden cost to it.

• Any kind of financing
• Gmail / Facebook / Blogs
• War
• Chinese Manufacturing
• Anything You Can Buy
• A Desk Job
• Eating Out
• Exercise or Sedentary Lifestyle
• Torrenting Copyrighted Materials

Types of Cost

• Price / Maintenance / Depreciation
• Habit formation (especially habits that don’t serve you)
• Time / Opportunity Cost
• Money
• Space (in your house)
• Presence
• Connection
• Awareness
• Capability
• Rot/Deterioriation
• Optionality
• Underpaid and Discouraged Artists

Types of Benefit

• Money
• Automation
• Skill Development
• Discipline / Practice
• Convenience
• Consistency / Uniformity / Standardization
• Insights and Analytics (think Mint.com)
• Novelty / Shiny New Things
• Opportunity to Connect/Reflect