Opportunity Cost

Many of you read that title and probably asked yourself what in the world is Opportunity Cost! Using this financial principle and understanding the impact can save you money and stop buyers regret. Opportunity Cost also has an element of discipline with it that has to be implemented. I have been leading Financial Peace University for over 14 years and Dave talks abut this in lesson 5; Buyer Beware. I have experienced Opportunity Cost two times recently so for this article I am going to us myself as an illustration.

Here is how Opportunity Cost happens. My wife and I were watching a movie at home in the media room one night and noticed our double recliner / love seat was in need of replacing. The bonded leather is ripping and its just worn out. That same day we had received a flyer from Bed Bath and Beyond with a coupon attached for 20% off our next purchase. Pretty enticing right? Well right in the middle of that flyer was a cool looking love seat that folds out into a bed. It came in cool colors light purple, red, blue, and grey. The more we looky the more we liky! We both looked at each other and said, "let's buy it!" HINT: Guys, when the wife says that, that's your green light to make a purchase. After the movie was over I went to go shop and Becky went to bed.

The flyer said it was only available online. I went to the site and pulled up the red one and proceeded to check out and got the total with shipping and the discount. It was right at the moment that "Opportunity Cost" came into play. The total cost for our new love seat purchase was over $700. We had the cash to cover that, but at that moment, I remembered all the other things we needed that I could use $700 for. The list is long and are items we really needed more that a new love seat. Did I really want to let go of $700 cash for this new love seat?

The next day Becky asked me if I ordered the love seat and I told her no. "Why not ?" she asked! I proceeded to remind her the other things we have been wanting and while the opportunity to buy the love seat at a good price was there, the cost was not what I thought we should spend our money on right now. Thus we have "Opportunity Cost". She agreed!

Dave says paying with cash makes you FEEL the purchase more and makes you really stop and think is this the right purchase. If I had a credit card (which I don't), it would have been real easy to just charge it with no hesitation just adding more debt. I encourage all my readers to move to an all cash system of financial stewardship so that when you make a purchase you FEEL it more and make better financial decisions.

Comments? Have you had opportunity cost recently?

Love Is In the Air

What do you automatically think of when someone mentions the month February? Well of course…love. It’s the love month where boys and girls and men and women all display their love for someone. I remember my first exposure to Valentine’s Day in elementary school when the boys gave Valentine cards to the girls and the girls even gave cards to the boys. Back then it was a fun but silly holiday to me. 

Today, Feb 14^th Valentine’s Day, is still honored as a day to display our love for someone. Pink cards fill the racks at the stores and pink gifts are out. Boxes of chocolate in a pink heart box are still very popular and given often. My favorite today that stems from when I was kid is the colored candy hearts. I still buy them today. 

For your information, love did not start with Cupid and Valentine Day! God is love and He created love and demonstrated his love for us all through the Bible. So the Bible would be the only real source of what love is and how to display it to others. Valentine Day is fun and maybe a little silly at times, but God is our source for love. If you look up the word love in most study Bibles in the concordance, you will get pages and pages of scriptures that relate to love. 

As adults, there are a lot of ways we show our love to others. I am sure people still buy pink cards and heart shaped boxes full of chocolate but there are other ways to show your love to someone. Let’s look at another way to love, that we often don’t think about. Jesus says that we should speak the truth in all we say and do. Speaking the truth to a friend, a spouse, a friend, or whoever, says that you love them. In the Beatitudes (Matthew 5), Jesus spoke eight blessings on those who were there. He then went on to speak about issues they were facing and dealing with, however instead of blasting them for their wrong doing, he spoke the truth in love. After he had finished, he left the hillside and many followed him. That tells me he didn’t blast them and make then mad; instead, he spoke in a soft voice in love all the still correcting their behavior.

WOW! What a model for us to know how to speak the truth in love. What’s sad is seeing parents abusing their children, yelling and screaming at them, pushing them around, and getting nowhere. It’s the same with couples. It’s sad to see couples arguing and yelling and screaming like little kids thinking that will fix the problem. Jesus gave us a better way in speaking the truth in love.

Here is a challenge for you! Take the whole month of February in light of Valentine Day and the whole love thing and whenever you speak, to whomever you speak, speak the truth in love. This will be hard because we are moving through life so fast that we don’t even take the time to stop and talk to people many times. This will be hard because you will not want to offend anyone. I think people are offended more if you love them and tell them a lie! Make a conscious effort so always speak the truth and speak it in love. 

Where there is love, truth must be also! Scripture reference Ephesians 4.15

Comments? Suggestions?