Reading time aprox: 4 minutes, 12 seconds
Learn the difference between price and cost based on your salary to make better decisions with your money.
Do you know the difference between what you pay for something and what it actually costs you? In this post you will learn the difference between price and cost, and how the price of products and services varies depending on each individual’s salary. You will see how to calculate how much is earned per hour in relation to a salary, including many practical examples so that you can make better financial decisions.
(I leave the formulas at the end of the post to apply them to your personal case).
Let’s start,
Do you know how long you have to work to earn $50?
If I ask you how much money you paid for the morning coffee or dinner with friends or the new sweater, I’m sure you can tell me the exact or very approximate figure.
Now, if I ask you how long you had to work to be able to pay for that coffee, that dinner or that new sweater with your current salary, what would you answer? You probably don’t know.
In the consumer world, we focus on the price of things without considering the real impact they have on our finances. But what happens when we look beyond the price and examine the real cost to each of us? That is, the labor effort we have to make to acquire that item.
Let’s look at the difference between the price of a thing, what it says on the label or ticket, the invoice, the receipt, and what you actually pay, that is, what it costs you to earn that money.
And yes, they are two different concepts.
First, let’s clarify the concepts. Let us look at the difference between Price vs. Cost:
Price: The amount of money you pay for a product or service in the market.Cost: It is the real financial impact that this price has in relation to your salary.
And it is very important to be clear about them in order to know how to manage our finances correctly.
I’m sure they didn’t teach you that at school or at home. Neither did I.
First, I will explain the steps to follow and then, we will see it with examples.
Cambia tu perspectiva financiera
Cada hora trabajada tiene un valor. Conoce el tuyo y optimiza tus decisiones financieras diarias. #ValorDelTiempo #DecisionesInteligentes #MAPPINGVITA
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