Don't always go for the cheapest option - Time, money and opportunity cost
February 6, 2021•231 words
Reading time: 1-2 min
In economics, there’s something known as opportunity cost. It’s what you could have done with the time and resources you spent to do something else.
For example, you could either:
- purchase an item at a nearby shop for a hefty price
- or purchase the same item at half the price at a shop that takes an hour to travel to.
Which would you choose?
Purely based on the monetary cost of the item, it would make sense to go to the shop further away. After all, you save on half of the cost the item.
However, one could consider the opportunity cost:
- You lose the hour you have to spend to get there and the hour back, along with what you could have done instead with that time (such as work an extra shift to earn money or something else to enrich your life)
- The transit cost (public transport or your gas / electric bill for a private vehicle)
Sometimes, it's worthwhile to save on time cost by going for the more expensive option. Instead of spending time hunting for the cheapest possible option monetarily, it’s sometimes a better use of your time and money to just buy the convenient option. You might even save on decision fatigue.
You save time by doing that and time is precious, for your time is limited.