Personal Finance Advice

Sometimes the price you pay for something is not the actual cost.  Socioeconomic experts have used a fast food hamburger as an example: The burger may cost less than a salad off the same menu, but the long term cost of that burger far exceeds the long term costs of the salad when it comes to the detrimental effects the greasy burger will have on your body.  If you consistently choose salads over burgers then your odds of having high medical insurance premiums decrease, in theory.  

You can use this same theory to realize the true cost of the other things you spend money on too.  You may pay a pretty penny each month for your gym membership, but if you actually use the membership to your full benefit, and get exercise that you may not have gotten otherwise, then the health benefits far outweigh the price you pay to maintain your membership.  In other words, when it comes to personal finance, sometimes the price you pay for something - even if it initially seems to be an indulgence - is completely worth it.  In the long run, you might actually be saving money.

Using this same theory, what other indulgences may wind up saving you money in the long run? 

A massage costs money, but if it relaxes you enough during your time off to increase your productivity while you are working then the cost of the massage may be worth it.

A vacation costs money, but if the time away allows you to regroup and get refreshed then the costs associated with the vacation may be worth it.    

A luxury car costs more than an economy car, but if the safety features on the luxury car save you from devastating injuries during an accident, then the car was well worth the price you paid.

Then again, it’s easy to twist things around to make them into something that will justify something you want to buy, even though you don’t really need it and certainly can’t afford it.  Take, for example, a woman who pays an enormous fee to join a trendy yoga studio.  She does yoga infrequently and there are ample yoga studios in town offering comparable classes at a fraction of the cost.  She chooses the trendy studio for two reasons:

1.  She wants to be seen there.

2.  She justifies the expense by saying it will help her lose weight and stay healthy.

Sure, yoga can help maintain fitness levels, but if the main reason she joined this particular yoga studio is because it’s where all the stylish people in the city go then the money she pays is mostly a waste.  She can join a less expensive yoga studio, or just not join one at all since she rarely makes use of her membership.

Examine the true cost of the things you pay for.  Rarely is the true cost of something the actual price that you pay.  When you look at all the impact your purchases can have on your health, the environment, and your personal financial standing, you realize that the price tag isn’t entirely indicative of everything the purchase will cost you in the long run.