This post is somewhat of a counterpoint to most of the posts here – this post is about making sure you don’t cost yourself in the long run. This is often caused by ignoring various expenses.
Let’s say you wanted to go to Atlanta from Fort Lauderdale. For the sake of the principle, we’ll make the following assumptions:
- You can get to any local airport via a 40$, 15 minute cab ride.
- Driving will be without traffic.
- You can get picked up by your friend in Atlanta.
- You need to be at the airport 1:15 ahead of departure time.
- There will be no flight delays.
- We need to be there for all of July 17th 2013.
Now according to Google Maps it is a 9 hour 18 minute drive without traffic, covering 640 miles. Assuming we get 30 mpg overall – at $3.50 a gallon – the trip costs approximately $75. On the cheap and getting cheaper Spirit Airlines it is $217, $234 on AirTran.
Obvious choice right? No. For starters, I would be spending 19 hours, 40 minutes driving – versus 7 hours by plane (both values roundtrip). Let’s say we take AirTran – we break even if we value our time at $18.87 an hour, and that’s before depreciation and maintenance. Any more – we’re saving money! So if you make $100 an hour as a software engineer – FLY!
My grandfather recently bought himself a SodaStream, on the grounds that he was liable to hurt himself carrying around seltzer six-packs (Where he lives – around 20 pounds (9 kilos). Marginal costs per bottle save money, but not enough to justify it. However, you can easily make back the $70 you spend on it if you can save yourself one doctors appointment, visit to a back specialist, etc. Spend to cut back on your health risks. It usually pays.
Commonly Forgotten Expenses:
For starters, value your time. Also, try to value your comfort (after all, you don’t live under an underpass to save on rent), and the always forgotten – depreciation. Look at the expected cost, not necessarily what’s upfront.