Let me start by asking,
How do you determine the worth of something? Most people would say that an item’s worth is equivalent to the number written on its price tag, right? Wrong!
Looking at it this way is only paying attention to one side of the equation. Today, we are going to look at the unseen and often ignored side.
Every single thing has both a price and a cost. So what is the difference between these two?
As you guessed it, price is the number written on the tag (everyone knows that). On the other hand, cost refers to the overall value the item will provide.
Let me elaborate. Say I go to a mall in need of a new pair of shoes, on my right are shoes worth $100 and on my left there is a similar pair, but these are worth $250.
We’ve identified the prices of the shoes to be $100 and $250 respectively, let’s now calculate their cost.
If I were to wear the shoes thrice a week, the shoes worth $100 would be viable for six months. The shoes worth $250 also worn thrice a week can last for one and a half years.
In order for the $100 shoes to serve me for that same period of one and a half years, I’ll need to buy three of them since after every six months I’d get a new pair. In the end I’ll have used $300. If you take a closer look, you’ll see that this is $50 more than what I would have used had I bought the $250 shoes.
I would also have saved up on the time I used to go to the mall for the second and third pair.
Infinitely the $250 shoes are more valuable in terms of both money and time which are both precious assets.
However, this does not mean you drown yourself in debt to buy something with more value or that you buy things on impulse. Instead, budget well for them.
Now that we are getting the hang of this, let me show you the dimensions of how cheap can be very expensive.
Things that seem cheap but are actually very expensive.
Fast foods and takeouts.
Let me ask, when was the last time you had a proper home-cooked meal?
Everyone knows that life can get very busy sometimes and when it does, cooking may be the last thing on your mind after a long day. So what do you turn to? Take Outs and fast food. This seems like a convenient solution. It will literally be at your door in minutes not to mention how cheap it is.
Sans paying attention, this becomes a habit. A very detrimental one to your health as the processed sugar and fat puts you at risk of life-threatening medical conditions such as obesity, diabetes or even cancer. The seemingly cheap lifestyle makes you pay a high price when the medical bills start to trickle in.
Finding balance is the secret here. An example is having home-cooked meals during the week and eating out on the weekend. You could also stock up your fridge on the weekend with meals that will serve you for the rest of the week.
Hiring cheap personnel.
At times, when an employer is conducting a job interview, they may ask the interviewees what their salary expectations are. There are those who set the bar high while others set it low. The employer may be greedy and choose to hire the one that sets it low to cut on costs.
The case may be that the one setting the bar low is not as experienced. Although hiring them may seem cheaper, you’ll have to use some money to train them and even when you do, there is the risk of them messing up.
Let’s take the scenario of a construction site, hiring inexperienced personnel may lead to the foundation of the building not being built as strongly as it should and it puts the building at risk of collapsing over the years. Putting you at great loss all because you were being cheap.
Old Cars and electronics.
This category applies to cars and electronics. Say you are in need of a car and buying a Mercedes may be way over your budget at the moment. Instead of buying a rusty old car, try and save a little and buy a better one. The rusty car may seem convenient and easily available but it will require several repairs that will keep you digging deeper and deeper into your pocket.
You don’t have to get a brand new car, just save up and get a decent one that hasn’t seen better days.
The same goes for electronics such as PC’S. Trying to save and buying cheaper ones will have you doing repairs on them over the years and eventually you’ll have to buy more. You’ll end up having spent more than what you would have had you bought new ones.
Flash sale clothing.
We all love a good discount. Being a huge thrifting fan, I am aware that one can find very nice clothes in the flash sales or you could find something close to a rug.. Most of the clothes on sale don’t fit well or have odd colors that wouldn’t match with anything else in your closet. You know where they’d be after a few wears? At the back of the closet.
Nevertheless, it is still possible to thrift something nice and valuable, but it will require you to dig deep into the pill and look at every nook and cranny of the store. And when you find it, it will all be worth the hustle.
The same goes for shoes, instead of buying a pair that will wear out in a month and you’ll keep going back for other pairs as the months go by, just save up and buy one that will be functional for a year.
Below is a summarised table showing the difference between low price and low cost.
All things considered, the things that are of good quality and add value to our lives need a little bit extra attention from us and our pockets but their returns are far more valuable. In the years to come, we’d be grateful we took a chance on them.