This morning I read a great post on Get Rich Slowly that posed a very interesting question: why pay for something if we could otherwise do or get it for free?
In the article entitled “Paying for What you Could Get Free,” April Dykman writes why she chooses to pay someone – whether it’s Italian classes, or yoga teacher training – as opposed to going at it on her own and paying nothing:
There are a lot of time[s] when it makes sense to spend money. The best $20 you’ll ever spend is taking a mentor or expert out to lunch. And I’ve found that the best way to reach many of my personal goals, even the ones that are purely for pleasure, is by paying someone to hold me accountable.
Too many times I’ve started working toward a goal and didn’t stick with it. Before I quit my job, I was continually making progress growing my business, only to slack off for a few weeks. When I signed up for one-on-one coaching, however, I had a real, live person who would hold me accountable. I didn’t want to let this person down (even though, in truth, slacking off was letting myself down). Each week we’d set mini-goals, and I now had a task list and a deadline. If I didn’t accomplish my tasks, I would have to explain why to my business coach.
The second reason that it pays to pay for accountability is that a teacher, coach, or mentor can help you look at a situation or problem in a different light. For example, my Italian tutor has devised little tricks to remember the difference between words and phrases that sound similar, but mean two different things. Rather than memorizing words on flashcards, I get a broader view of how the language works. It’s incredible how much more quickly you can advance with a teacher than you can on your own.
Finally, I’m paying for motivation. Sure, I love Italian, but when I’m around other people who love it, their motivation rubs off and I’m excited about silly things like doing my homework and memorizing how to conjugate irregular verbs. When I’ve tried studying Italian on my own, at some point my excitement wanes and I fall out of the habit of making time to learn. Meeting with my tutor once a week recharges my enthusiasm.
What I feel this more or less comes down to is what’s commonly referred to as opportunity cost, which is defined as, “The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.”
In using one of the examples above, April’s opportunity cost for paying her business coach was potentially not making many thousands of dollars from her business because she continued to be unorganized and unmotivated. Seems to me if you have to shell out a few hundred dollars to make a few thousand, that’s pretty much a no-brainer.
Furthermore, I think mastering the above skill – knowing when to spend and when not to spend – can be the difference between being cheap and being frugal. What I mean by that is, being cheap is having an aversion to spending money, no matter what, while being frugal is being smart with your money and being prudent when you need/want to make a purchase. Cheap is bad, frugal is good.
Anyway, I definitely recommend you check out April’s article, which you can read by clicking here.
What are your thoughts on this? Leave a comment below and, as always, please share this article using the social bookmarking buttons below – especially Facebook and Twitter!