Tuesday, December 08, 2009

Count the cost

I started to name this post "How much is that doggy in the window," but decided that most people wouldn't get the point (that phrase is from a VERY old song - older than me).

One of my favorite Bible verses is Luke 14:28. Roughly it says you should "Count the Cost" before building a house. You need to know the cost of the house before you start, otherwise you'll run out of money partway through. Of course in today's world, you wouldn't run out, you'd just run down to the bank and take out a mortgage or you'd whip out your credit card.

It occurs to me that there are times when you don't count the cost. If you're in an accident, you don't shop around for the cheapest ambulance service, you call 911 and take the first one that gets there. After the bill comes, you figure out how to pay. If you have a heart attack, you don't ask the doctor ahead of time "How much is this going to cost?" or "do I have enough money in the bank?" If your roof is leaking, you may call around for the best price/service, but you will go ahead and get it fixed, regardless how much it costs (or at least you should).

Certainly you should have money saved up to cover these kinds of cost, but that's not the subject of this post (maybe a follow-up). My question is, what situations merit this type behavior? Maybe you need a new high-def TV, but not sure whether or not you can afford it. Ok, that's probably an extreme example, but suppose your car is failing. You need a car to get to work. And because of the kids, it has to be a safe car. Do you count the cost or just go out and buy a 2010 BMW. Those cars are safe and reliable.

So my question to you is, when do you count the cost and when do you just go out and do something? This could apply to items like cars, medical treatments, etc. and it could also apply to government.

4 comments:

Thomas said...

I'd say that I count the cost in virtually every purchase I make. Last year, I needed to get a different car, but did not want to make payments on a new one.

I wound up choosing a Hyundai that was a few years old and had 40,000 miles on it. I bought it from a pastor for $8,000 and it has served me well.

"The Edge" said...

Alot of what you count depends on where you are in life and why you're counting....single guys may not worry about droping a C-note on an NFL stadium trip to see their favorite team, but might on a new microwave....but a married woman won't think twice about dropping a few bucks on new shoes, but might on that same NFL game when she's got two kids to feed. I guess it's all a matter of perspective.

Some of what counting is all about are the "hidden" costs. It might only be $500 for that vacation, but if you've got pets, suddenly you have to board them, etc. That can run another couple hundred. That's due when you pick them up, and no so easy to push off till later. So, it can also vary with the situation.

A good rule of thumb might be that if you can sleep on it, you can evaluate whether or not you really need it. Obviously, a car accident is no time to second guess an ER trip. But a minor ankle sprain might be. Buying the new car after the accident might lead you to question if you should get a used one instead....and that's what "opportunity cost" is as we learned in economics 101...the cost of the next best alternative. If the next best alternative is death, you're not waiting for the ambulance. But your boss certainly will understand if you have no car to drive. Giving you the day off to look for one is reasonable. He's counting that cost of losing you as an employee versus the immediate need you have to get a vehicle. But what you end up choosing is that cost that you're counting.

Sometimes the battle isn't between good/bad or right/wrong. Often times, it's between better/best. This is the gray area where both alternatives might be permissible. It's there where we use our gut to fill in the missing pieces we don't have. Ultimately, we'll live and die by those choices.

On a side note, I wonder how much cost Tiger Woods is counting these days? A few nights of "undefined" pleasure seems to be turning into a lot of lost privacy, a potential split in his marriage, and a possible loss of "image", not that we care about such things. It's his life to live, right? He's getting ready to lose several million in "petty cash" to several folks he never thought would ever bother him. I just wonder if missing a few of those nights might have meant everything to his piece of mind....
He's made his bed, now he has to lie in it, as the saying goes. If anything, it's a good lesson for all of us that what you think is behind closed doors, isn't always....

"The Edge" said...

Revision: it should read ...but a married woman may not think twice about dropping a few bucks on new shoes.....

My apologies. The original statement as typed was over-reaching a little bit.

Randy said...

Thomas, sounds like you made a good purchase on the Hyundai. I'm glad you "counted the cost" and decided to pay it now rather than pay it later.

Edge, exactly my sentiments. But too many people assume they HAVE to do something no matter the cost.

As for Tiger, sounds like he's going to be counting the cost for a long time...