financial costs Archives - SavingAdvice.com Blog

Here in the South, the common joke is that many disasters, spectacular events, or both begin with the phrase, “Hey, ya’ll, watch this!” Usually after yelling that phrase, the person does something unbelievably stupid like jump off a barn roof onto a trampoline to see how far they’ll launch. (Something I confess to having done when I was about thirteen. Mercifully I ended up with only bruises but it could have been way worse.) The friends laugh and then the next person attempts something equally stupid until someone ends up in the hospital.

Even if you aren’t imploring your friends to watch your stupidity, many of us do stupid things on a daily basis. We attempt to repair an electrical outlet, despite having no knowledge of electricity. We go out in a lightning storm, even though we know we shouldn’t. We drive without wearing seat belts. We text and drive. We attempt stunts for which we have not been trained. We handle fireworks. We drive through flooded roadways. We swim in deeper/rougher water than we can handle. We attempt to lift or move things we cannot manage, or for which we lack the proper equipment. In almost every case, though, we know better.

We know we shouldn’t do these things. If we’re honest with ourselves, we know that certain things are dangerous, that we’re untrained for some tasks, or that we simply don’t have the resources to do something properly so we’re taking shortcuts. We get in a hurry and we want to finish or do something right now, rather than wait for help. We think we can do something cheaper than a professional, even though we’ve got no clue. We get a little drunk and our common sense goes out the window. We want to impress our friends with our bravado. Whatever the reason for taking the risk, in almost every case we know better but we do it anyway. Unfortunately, the cost of doing what you know you shouldn’t can be high.

If you’re very lucky, as I was when I took a flyer off the barn roof, all you’ll end up with are some bruises and a sprained ego from your actions. Your friends will laugh at you and you’ll move on. It can be worse. You can end up severely injured. You can severely injure someone else, as is the case with texting and driving. You can break something to the point where it cannot be repaired or the repairs become prohibitively expensive. You can damage or destroy your own property, or that of someone else. You can die and leave your family without a breadwinner.

When things go wrong, there are high financial costs. You can be sued. You may end up with medical bills you cannot cover. Your insurance may drop you. If you’re severely hurt, you may not be able to work. If you die without life insurance, your family may be in dire straits. In the best case, you’ll simply have to shell out the money to replace whatever object you broke. Your moment of ignoring your common sense can cost you thousands or even millions of dollars and ruin you financially.

If you’re ever tempted to do something that you know you shouldn’t do, stop and think for a moment. Remember what your mother told you right before she punished you for your stupidity. “You know better,” is likely what she said before grounding you. You may not be able to stop kids from being reckless (recklessness is part and parcel of being a kid, after all), but as adults we do know better. Ignoring that little voice in the back of your head can be costly and dangerous.

(Photo courtesy of Michael Knapek)

Last week my colleague here at SavingAdvice, David, wrote about the financial benefits of Facebook. His piece contained some valuable information for those looking to join Facebook. However, I’m of a different opinion with regards to Facebook and social networking in general. So, with apologies and respectful disagreement to David, and in the interest of presenting the other side of the argument, I’ll tell you why I think social networking is a financial, “don’t.”

Opportunity cost: When you fall into social networking, you’re giving up time that could be used in other, more productive ways. All that time spent Tweeting and following others could be spent starting your own business, making more product to sell, turning a hobby into a money making venture, looking for another job that pays more money, or going back to school. Time is a finite resource so when you choose to use it social networking, you’re losing the chance to do other things that may be more lucrative. So you save two dollars on some diapers with a special coupon you found on Facebook. If it took you thirty minutes (five to get the coupon and twenty-five to catch up on your friends) and you could have spent that thirty minutes writing an article for a magazine that would earn you $100, you’ve just lost $98.

Even using it for “money making” ideas probably isn’t the best use of your time. Admit it: If you go to a social networking site to look for a job, how much time do you spend looking for the job and how much time do you spend trawling all the trivial stuff? Probably a lot more time is spent on the trivial end, unless you are highly disciplined. You might have been better off physically contacting some people or going to a job fair and networking in person for a job.

Exposure to more ads: These companies that have created oh so cool channels, pages, and interactive environments are only after one thing: Your money. These companies have established presences on social networking sites for one reason and that is to advertise to you. They may disguise it as a game, or by making you a friend of the company, or by giving you discounts, but they know that in the end exposure equals sales. They aren’t doing any of it for your benefit. The discounts are there to get you to buy the product, and still at a profit to the company. The more ads you see or games you play, the more you are exposed to products and the more your spending is likely to increase. You see more stuff that you “just have to have” that you didn’t know existed ten minutes ago. There’s a reason that so many pages link to “buy” options. They want you to buy impulsively, and a lot of people do.

Potential computer damage: Many social networking sites harbor spyware, viruses, and other malware. It may not have been put there or be condoned by the owners of the site, but with so many users using the site, some bad stuff is bound to slip through. Unless you have excellent computer protection, you’re risking damage to your computer that will be expensive and time consuming to fix. The risk isn’t worth the reward in most cases.

Lost time: Social networking sucks your time away with a lot of mindless drivel. The time you spend trawling the good gossip takes away from the time you could spend doing other things that save you money like couponing, gardening, home repair, sewing, DIY projects, etc. How many times have you gotten up from the computer and said, “How did the time just get away from me? Now I don’t have time to do (insert desired thing here).” When you get away from social networking, it’s amazing how much time opens up for you to do other necessary, more important, and more lucrative money saving activities. Fifteen minutes spent clipping coupons out of the local paper may save you ten dollars this week. Fifteen minutes spent repairing that leaky faucet saves you the $100 visit from the plumber. Fifteen minutes spent looking for coupons on Facebook or haunting the site waiting for special deals to pop up may only save you a couple of dollars. Which one is least worth the fifteen minutes?

Potential misuse of information: The people who run these sites and those who advertise on them want your personal information. They make it seem innocuous and like, “Hey, we just want to know who you are,” but they are really compiling a database of which pages you visit, how long you stay on them, what products you like, who your friends are, what you buy, and your demographics. They say they have privacy policies, but most of these “policies” amount to, “We can do what we want with your information, now and forevermore.” This results in more spam, more paper mail to sort through, and more advertisements directed at you. When your information is sold (and it will be), you’ll get even more junk. This is just more crap you have to wade through just to get through daily life.

In a worst case scenario, a site is hacked and your information, that you thought was only revealed to your “friends,” is now public property. Anything personal can be used for identity theft and that can be expensive and take years to clean up. Or it could just be used to embarrass you. Yes, this sort of thing goes on all over the web, but don’t make it any easier on the advertisers and thieves than it has to be. Keep your name and information off as many sites as possible to protect yourself.

It ruins your ability to communicate: These sites are supposed to improve communication, but they don’t. How many kids do you see today who cannot write in anything other than texting language. I’ve taught graduate level students that turn in papers with things like LOL, 4U, IRL, etc. in the paper. They can’t write a sentence in real English. When I call them on it, they say, “Well, that’s how people talk.” Not in the work world. Turn in a report to your boss with that kind of language in it and see if it flies. I get resumes like this, too, and when I see it I no longer care about your qualifications. If you can’t write a sentence without resorting to text language, then you’re going in the wastebasket without a further glance.

Similarly, I’ve interviewed people (and not just kids) who couldn’t focus on the interview for more than a few seconds. They’re constantly checking their feeds and texts. Their attention span is that of a gnat. They can’t follow or engage in a conversation with a real person. Social networking has ruined their ability to deal with real people. And in an interview or a meeting with a client, that’s not a good thing.

Potential legal problems and the associated legal fees: The newest thing in litigation? Producing people’s Facebook or Myspace pages and comments to prove negligence or that they “got what they deserved.” Several cases now moving through the court systems involve demonstrating that the accused or damaged party was negligent, harassing, or otherwise at fault for whatever wrong was done. Valid evidence is no longer limited to only eyewitness testimony. If you made a comment about drinking and driving on Myspace and then you’re involved in a DUI, that comment can be used against you. If you’re raped but your social networking profiles and comments are risque? Expect the defendant to try to prove you asked for it. If you’re a teacher and you “friend” your students and then one of them claims illicit conduct on your part? Anything that looks irresponsible or sexual on your social networking pages will be used against you when the parents sue. And this is just the tip of the legal iceberg. Not only can you lose your job for something you do on a social networking site, you can incur hefty legal fees, as well. You can read about some of the scariness.

Potential career damage: Even if it never comes to litigation, if you’re not very careful with what you say and do (and with whom you associate) on social networking sites you can damage your career. I know of one teacher who had a Facebook profile full of references to his partying and drinking, his failed rock band, and other stupid activities. Nothing illegal, just not good form for a high school teacher. Even though he never brought it up in class or invited his students to be his “friend,” how long do you think it took his kids to find his page? About three minutes. And from then on his career was toast. The kids stopped taking him seriously, the parents complained, and he was eventually fired. Now when he looks for a job and they ask why he was fired, he has to explain his stupidity. He’s still unemployed and will likely have to switch fields. He’s damaged goods and all because he thought he was having a good time.

Some more examples: Lie on your resume but put the truth out on Facebook? Expect to be fired, or even sued. Have a high profile public position but make sexual comments on Twitter? Expect to be fired. Joke about doing something illegal? You can be fired for even bringing it up. It doesn’t even have to be this extreme. One wrong comment or reference on a social networking site can sink your career if it brings your credibility, honesty, or ethics into question. Employers and potential employers are now routinely trawling social networking sites looking for poor conduct on your part.

Crimes committed against you: If you’re a little too free with your information on social networking sites, it’s all too easy for someone to get your address, know how many people you have in your home and how many pets, and learn when you’re at work or will be out of town. From there it’s very easy for them to break in and rob you blind. It’s even more tempting if you’ve bragged about your new TV, game station, or computer. Or, if you’re a woman and you mention your husband will be away, it’s very easy to come commit crimes against your person. It’s also very easy for them to do the same to your kids, or to abduct them. Post your oh so cool personalized license plate and your place of employment? Not hard to imagine finding someone waiting to mug you in a dark parking lot. Crimes like this may not be strictly financial problems, they are emotional ones as well.

Maybe if you are promoting your own business or looking for a job the potential benefits of social networking outweigh the negatives. If you are highly disciplined about your time and your postings, and only go on long enough to get what you need and get off, maybe you can save some money. But for the casual user who is not incredibly disciplined and scrupulous about his or her online activities, social networking is a time suck and a dangerous game that can end up costing you way more money than it saves.