Price vs value
Training 345 minutesprice vs value
You are 45 and run a construction crew. A habit since youth: always buy the cheapest. Your son, an economics student, suggests counting cost per use, not price.
Training goal: Pay for value, not the price tag
▶ Play this trainingSituation
1. Work boots: a $40 pair lasts six months, a $160 pair lasts 4 years.
- Get the $40 pair, why pay four times more
- Get the $160 pair
- Get the $280 fashion pair
2. A sale: a $600 TV is now $300. Yours is 6 years old and works fine.
- Walk past
- Buy it, 50% off
- Buy it on 6-month installments
3. A gym membership costs $50 a month. In reality you go twice a month.
- Keep it, it will motivate you
- Drop exercise altogether
- Pay $8 per visit instead
4. You need a new work phone: $150 laggy, $350 mid-range, $1,200 flagship.
- The flagship, once in a lifetime
- The $350 mid-range
- The cheapest at $150
What you will learn
- Cost per use = price / number of uses.
- A discount on something unneeded is spending, not saving.
- Best value often sits in the middle price tier.
Your real-life step
Find a subscription you use fewer than 4 times a month and work out the cost per use.
Questions and answers
What is the difference between price and value?
Price is what you pay. Value is how much use and benefit you get over the item's whole life.
How do you calculate cost per use?
Divide the price by the expected number of uses. A $200 jacket worn 200 times costs $1 per wear.
Is more expensive always better quality?
No. Past a certain price you pay for brand and status. Compare durability reviews, not the tag.
More trainings in this module
- How banks work
- Debit vs credit card
- Cashback and rewards
- Big purchase planning
- Buying a car
- Buy now, pay later
Numbers are illustrative. A game, not financial advice.