Buzz
We often say we can't afford certain things when, in fact, it's entirely possible—it just means sacrificing other spending choices. Money blog Pretend to Be Boor encourages us to consider the opportunity cost of those choices so we can make more informed financial decisions.
'I can't afford' is a phrase many of us use, but in reality, we can afford things—we're simply prioritizing other purchases instead.
For example, I once complained about the size of my apartment, and a friend suggested I rent a bigger one. 'I can't afford that,' I said. He replied, 'Sure you can. You just need to stop going out so often.' While it may have been blunt, it was true: I could afford a larger place, but I had other priorities. I preferred going out frequently. I enjoyed splurging on groceries. My opportunity cost, the sacrifice I made for those preferences, was a bigger apartment.
As Pretend to Be Poor puts it:
It's perfectly fine to have preferences, and it's okay to spend money on some of them. However, if you find yourself unable to save money in multiple ways simply because you dislike certain things, it may be time to step back and reassess the bigger picture. Do you value shopping at the Big Store more than you value getting out of debt? Do you prefer driving a new car over saving for retirement or your kids' college fund? The opportunity cost of these preferences could be something significant, like retiring 5-10 years earlier, pursuing your dream career, or being truly generous. People often underestimate how small expenses can impact their overall financial situation. But when money saved from these 'little' costs is invested, it grows exponentially, and that is a power we often fail to recognize while our money remains tied to our preferences.
It all comes down to prioritizing your spending and using money as a tool for what matters most to you. For more insights, check out the full article at the link below.
Photo by Ken Teegardin.
Contact the author at [email protected].
