A few years back I was working as a project manager in a logistics environment. We had one area of the warehouse that did not seem to fit the rest. It was a clunky means of storage and terribly inefficient to use. When I asked about replacing it I even heard that half the cost of a new one would be the earth quake testing to install such a device. So I asked why we had storage that even a blind man could see was inefficient. My coworker at the time replied simply, “Sometimes Free isn’t Free”.
You see, the site I worked at had received this free storage device by dumpster diving off another company. Essentially rather than go to the junk yard they took on and installed the device. They spent little to no time analyzing how inefficient the operation would be as a result. They also didn’t look into the costs of installation and replacement. The device required an earth quake analysis that cost a small fortune to install. As such the cost of this device wasn’t free. Moreover, it’s design was incredibly inefficient. It was like a boat anchor on the organization that took over a decade to get rid of.
Sometimes Free isn’t Free in the Personal Finance World
This blog is a big proponent of getting things for free within reason. I love a good deal or a free sample within limits. We’ve talked about some of the limits on free already. These include:
These are some obvious examples where free isn’t free, but they are by no means a comprehensive list.
Other Examples where Free isn’t Free
Below are just some of the situations I’ve encountered over time where it’s less than obvious that Sometimes Free isn’t free:
- Free Advice: Sometimes free advice is good. Sometimes it’s average. Sometimes it’s bad. But often whether it truly is free depends on the source. It could come with an unspoken expectation of repayment whether directly from you or another. Worse still, the individual could be delivering the free advice with an ulterior motive. Say perhaps the individual is being compensated for their advice in some way or ultimately attempting to steer you towards something they sell. In this case their advice might not be the best for you. You should be especially cautious of Financial Advisors Free Advice.
- Online Surveys and Clubs: There is an oft overlooked cost to these. You’re giving away your personal data and privacy in exchange for their free items. That might be an ok trade off as usually the data is used in aggregate. However some less scrupulous organizations use the data to target you relentlessly with spam. Either way you’ve made a purchase using your data.
- Free Items, Gifts and Hand me downs: Say a friend or relative gives you something. If you don’t find that item useful then free isn’t really free. You’re paying for the storage space to house the item. You’re also paying to keep it clean. This one the FTF family struggles with a lot. Grandparents sometimes provide too many gifts to grandchildren during a holiday or birthday, which results in mountains of toys. I may not have purchased those toys, but they are not costless. An additional cost to free gifts and hand me downs is often they come with an unwritten expectation that you reciprocate. This is why so many people do no gifting agreements, because that expectation can rapidly escalate.
- Devices with high maintenance: So back to our winnings example from above. We won a water filtration system. Even ignoring taxes, the item itself required a $100 dollar filter replacements every few months. Given we had no use for such a device it wasn’t really free unless we planned on tossing it after a month. Even had we needed such a device there were likely options with cheaper maintenance plans we’d rather purchase. Sometimes a consumable or service to maintain a device can cost you more in the long run then the free device saves you.
- Home Repairs Help from friends, neighbors, and sometimes yourself: If you don’t know what you’re doing or they don’t, ultimately the repair isn’t free. Sure YouTube might correct for minor things, but if you’re looking at something major like installing a new roof you’re probably better off calling the professionals and paying for it. This is before we even get into that concept of strings attached where you feel like you need to return the favor.
- Free Swag for Sitting through a marketing pitch: The obvious example here is the timeshare pitch. Trade X hours of your time being hard sold in exchange for Y. The reality is you’re paying for your time and the chance that you might cave to the sales person. Perhaps you won’t and you can milk the situation, but it still really isn’t free. There are less obvious examples of this however. Have you ever been invited over to a friend’s house for a party or out to lunch only for that friend to attempt to sell you something? I’ve personally seen this done for everything from tupperware to financial advice. You’re essentially going to a free party in exchange for sitting through the sales pitch. Frankly I hate when friends try to pitch me things, but that’s a story for another day.
My best advice is when something is provided for free, think twice about what that means. Are there hidden costs, expectations, future costs, or some other reason you might not want to have that free item? If so, just be sure you get enough value from what you receive to outweigh the costs. Do you have other examples where something might appear to be free on the surface but in reality free isn’t free?