October 19th, 2011

The Free Monkey Problem: The High Cost of Free Things

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baby marmoset monkey

For economists, the free rider problem, which arises whenever people use a service without paying full price, is a dilemma worth tackling. Today, I want to alert you to a much bigger issue: the free monkey problem.

Free Monkeys for All

Imagine someone was giving away free monkeys on the street. They’re adorable and the price is right (free). You’d have to be crazy not to take one, right?

A handshake later, you’re the proud owner of a monkey named Timbo… for free! Online, a marmoset like Timbo would cost $2,600! What a steal!

But was the monkey really free?

Hidden Monkey Costs

An indoor monkey cage is at least $650.

Monkeys also need medical treatment and immunization shots from expensive vets. Additionally, what about the cost of a monkey sitter when you want to go to a no-monkey establishment?

Diapers are another expense—as much as $3,500 over fifteen years.

Plus, monkeys have to eat. Your marmoset Timbo will eat at least $3 of food a day. Over the average 15 year lifespan of a marmoset, food alone could cost over $15,000.

But it’s very hard to consider and calculate these costs while you’re overloaded with excitement at the chance to take Timbo home.

So the real calculation for buying and caring for a monkey is at least $21,000, and that only includes the costs we mentioned. Since you got your monkey for free, you’ll end up paying at least $18,500 over its life. That’s just a 12% discount. Whoopee.

But free makes our eyes all googly, much like a baby marmoset’s. Before we know it, we’re taking care of a monkey for the next decade and a half at a huge cost to ourselves.

Non-Monkey Applications

The free monkey problem comes up whenever we consume more than we want because we miscalculate the real cost of something.

If, for example, I apply for a credit card that has a free $100 bonus, it might seem like a great deal. But if research the card in Credit Karma’s review section, I’ll discover that the card has a $50 annual fee, a $1000 spending requirement before I get my $100 bonus (which I’ll blow on a few months of monkey diapers), and a high APR. After all that, my free $100 becomes awfully expensive.

Ever eaten too much popcorn at a movie theater? The refill might’ve been free, but you forgot to value your well-being, and how annoying it is when a kernel gets stuck in your teeth.

As Dan Ariely points out in his insightful book, “Predictably Irrational,” when Amazon introduced free shipping for purchases over $25, sales increased substantially. People spent more than they expected because they incorrectly valued the worth of free shipping. Ariely writes:

“Most transactions have an upside and a downside, but when something is FREE! we forget the downside. FREE! gives us such an emotional charge that we perceive what is being offered as immensely more valuable than it really is.”

Overcoming Free Monkeys

The easiest way to avoid the free monkey trap is to artificially inflate the price to match its actually cost. If the free refill of popcorn was just $1, how many people would still get it? For a credit card offer, what’s your net gain after all the hidden costs come into play? If your hourly wage for completing the offer is less than minimum wage, you might want to pass.

Thinking through the real cost of things saves us from buying monkey diapers for the next 15 years. So the next time you’re faced with something free, ask if you would pay $1 for it. If the answer’s no, you’d probably be better off without it.

There’s no such thing as a free lunch, unless your monkey steals it for you.

Now, if you’ll excuse me, it’s time for Timbo’s daily walk.

Ezra Fox, Credit Karma Contributor, Free Monkey Owner

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. I completely agree with your post. You have wirtten very well. Nice post man. Thank you.

    Divorce Utah at 4:17 am on October 20, 2011
  2. I think we have truth in advertising laws for this stuff. Like when they have an offer of “free $100” for a phone it should be a requirement that the real terms are layed out in print that isn’t so small. Like it should show you the savings percentage. Like free $100 on a minimum $1000 purchase is a 9% savings ($100/$1100)

    This should be the law. Too often ads take advantage of people and basically lie about the full cost of an offer. For capitalism to be fair we need a level playing field and that means truth in advertising. Too often it is the less educated that get tricked by such lies and the cycle of poverty is perpetuated.

    rusl at 3:47 pm on October 24, 2011
  3. Free can be free and more for those smart enough to play the game. In the monkey case it was quite simple – turn around and sell the free monkey for $2000.00 after expenses you net $1500.00. With respect to the credit cards, always pay your outstanding balance on time, do not buy what you would not be buying anyway and enjoy the benefits! The benefits can ammount to $1000’s every year. Yes somebody pays for this but that somebody will be somebody else or in many cases ammounts to the cost of doing business for the merchants. Overall, the flexability of credit brings merchants way more business and proffits than the cost. They all whine but non of them stop accepting credit cards and offering acceptable alternatives.

    marp at 6:59 am on October 25, 2011
  4. Quite right rusl – take the monkey & flog it to some other sucker…err sorry, lucky person. You don’t go far enough tho’, be money smart. For example: Take your $1500 net & invest it for the 15 years life span of a monkey, at 5% in a Canadian dividend-paying equity or fund. This will return you $6.67% p.a. after the gross-up you get for “Buying Canadian”. Gross amount you get – $3,670. Take that & put it in your RRSP for 20 years until you retire. Say you get 3% p.a. with no tax. The free monkey will have given you $6435 toward your retirement. Tax calculations take a few more steps & personal financial information. It ain’t rocket science.

    …you see why some people have monkeys on their backs & some retire in comfort. Never look a gift monkey in the mouth, but never let it turn into a white elephant either 🙂

    percyflage at 10:26 pm on October 26, 2011

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