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How much something really costs?


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Every household is like a small business model with its own incomes and expenses. In order to keep things in balance one must start to plan its finances like a businessperson. Big corporations have their own specialists whos work is to quarantee that the money from households finds its way to their bank account. Households therefore have no consaultants or accountants of their own so they have to consider their expenses more than they are used to so far.

Keep in mind that the cost of every single thing depends on how much it is used!

For example: Let's say you bought two pairs of jeans, one blue and one black, which both cost you $50. You have been using them for one year now. As you like the blue ones more you wear them twice as much as you wear blacks. Let's say you wore blues 200 times last year and blacks 100 times. Now, lets calculate how much did you pay for every single time you wore those jeans.

For black jeans its $50/100 = 0.5 dollars per every time you wore them. For blue jeans its $50/200 = 0.25 dollars per every time you wore them. Calculations show that the cost per usage is twice as much per black jeans as it is for blue jeans. It basically means that you pay twice as much for something you actually dont like that much.



The price of different items

It's pretty interesting to compare the cost of a different items on a cost per usage basis. What would you say is more expensive: a 100 dollar jeans or a 200 dollar watch? The simple answer would be watch, right? So, let's calculate the cost of a usage per both items. If you have a decent watch you probably wear it almost every day. Let this be a 300 uses per one year. When it comes to jeans it's probably less - 50 for example.

Now: 200/300 = 0.66 dollars per one usage. For jeans its 100/100 = 1 dollars per wear. Even thou watch cost you more as one time investment its usage is cheaper than it is for the jeans. Always think of it before you decide weather something is cheap or expensive.



Price versus Quality

The same goes with the quality of things we buy. We may think that cheaper but less quality is okay but eventually it may become even more expensive. If we have to choose between two pair of boots - one that cost $100 and others that cost $200 - we are more likely to buy cheaper. But then, what happens if the cheap ones last less than the others?



Last update: 2015-10-05 (Y,M,D)