Money Management: Opportunity Costs

Table of Contents

Opportunity Costs – The Real Cost of Unnecessary Purchases

Opportunity costs are the complete costs of making decisions and using resources. When we apply this concept to money management, we can improve our ability to achieve our own goals.

Often when we make an unnecessary purchase, we tend to only think of the cost of that purchase in terms of dollars. However, understanding that there are additional costs to you, beyond the dollar cost – will help you to better manage your money and resources.

Some Examples:

If you are trying to build up an emergency fund to help yourself get out of debt and better manage your credit – and you spend $200 on an unnecessary impulse purchase:

  • you have lost the opportunity to put that $200 in your emergency savings account,
  • you have lost the opportunity to make interest on that $200, and
  • you have increased your risk of needing to use credit in case of an emergency.

If you are trying to save for college but decide to splurge $150 and take your friends out for dinner – your splurge means:

  • you have lost the opportunity to put that $150 towards your college savings account,
  • you have lost the opportunity to make interest on that $150,
  • you may end up having to takeout student loans for that $150,
  • you may end up delaying your ability to go to college, and
  • you may end up delaying your ability to increase your income with a college degree.

Applying Opportunity Cost Thinking

There is a very straight forward, 4-step method to make applying opportunity costs more manageable – which will help you avoid the agony of taking hours to make a simple purchase decision:

  1. Decide what is important to you by establishing your own goals for your money.
  2. Create a budget and plan to make your goals a success.
  3. Track your goals and be aware of your finances.
  4. Think before you make an unnecessary purchase.

Taking the time to identify those goals that are truly important to you and the steps you are willing to take in order to achieve them – will give you a much better perspective on the opportunity costs of unnecessary purchases.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

Share This!

I am very pleased with the experience with your company. Great customer service and very professional. They made me feel like dealing with caring and friendly people. Jackie is a sweet lady. All of them very helpful.
Carolina Marroquin
1708815208
I am very excited for the helpful service I receive from David sklar &Associates Inc ! My experience with coronation she is a professional and skill person! We'll done ✔ thank you very much, Gw
garfield wallace
1708730999
Great and friendly staff. They went out of their way to help me with the process. David Sklar and Associates are more then professionals. Christine sylver helped me with every steps, everytime I asked for more help she was always there for me with a smile. Very professional and patient. I want to thank Christine Sylver for everything she did to help me through this process and by giving me a new start.
ray pat
1708550360
I was so nervous to go and then i met trina beautiful compassionate understanding trina how lucky for me what a professional thank you thank you
Penelope Mather
1708303088
It was easy to get everything started and I am happy that I choose you, thank you.
Marina Granado
1707942981
I came in with a lot of anxietyChristine SylverHernee Templonuevogave me the confidence I needed
George Carvalho
1707837852
A great place to find out the best way to remove your debt. I discussed my problem with a with a fantastic lady who's named Grace. This lady showed me a couple of ways to lower my debt and I chose one. Thanks to Grace one day I will be out of debt, but until then my spending without cause has come to an end.To the staff and especially Grace of David Sklar and Associates thank you.Bob Barnesi will be one day out of debt
Robert Barnes
1707781618
A wonderful experience with a very depressing financial situation.Cori is easy to talk to and understand, with what she is describing.
Verble Daniels
1707699079
The staff at David Sklar are absolutely life changing and phenomenal people to work with. They are a well dedicated team whose personal mission is to truly help you turn your life around. Don’t be afraid to call them. Don’t be afraid to be honest to ask for the help you need. Rest assured no matter your debt load they will assist without judgement and deliver with compassion the best way forward to legally seal your debts and give you a real chance again at life. I highly recommend their services. They changed my life. They will gladly help you too. My personal consultant Trina Powell is an incredible, smart, and extremely supportive ally. But know you’re in good hands no matter who they assign to help you. Change your life today and pick up the phone and call them you’ll only be sorry you waited so long.
Kelly Silke
1707344543
This was an is an excellent experience for me because I am now able to retire comfortable in five years an debt free. Life seems to now begin. I should have done this earlier. But I did not have a company to do a consumer proposal with that I trust. Thank you for saving me.
Carilyn HoseinAdams
1707147259
js_loader
DS david skalr icon

Book your free consultation.

Call 1-844-962-9200 or fill out the form below. We’ll do the rest.

Contact Us