Wednesday, February 06, 2013

It's Only $X Per Day, Week or Month

I try not to be fooled by arguments that present prices in terms of a time frame that make the cost seem low.    One example is life insurance for only 99 cents a day.   Very affordable, who couldn't afford 99 cents?     But that misrepresents the real cost of $362 per year, which may be a different decision about the purchase.

So rather that think of expenses in daily, weekly or monthly costs, I think of total or annual costs.  All those cents or dollars add up to the larger annual costs.  That way I can realistically compare it accurately to our other expenses and make a better financial decision.

For more on The Practice of Personal Finance, check back every Wednesday  for a new segment.

This is not financial advice. Please consult a professional advisor.

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