Cost vs Value

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Weighing up whether something is worth the price the seller is asking can sometimes require a considerable level of mental gymnastics.

Working hard for your money means you want to find the best value in the thing you’re about to part with your hard earned cash for.

It’s not just the big ticket purchases we find ourselves ‘urm-ing’ and ‘ar-ing’ over; is spending X amount more on this car worth it for – insert feature here -? We also find ourselves going through these juggling acts on our weekly grocery shop (basics or branded), in your coffee shop (“cream for an extra 50p?”) or in your cinema (to popcorn or not to popcorn).

These sorts of decisions are rife in our everyday life and we often may not even realise we’re doing it.

But how do we measure the cost of something against the value we’re getting out of it?

Attempting to even draw a correlation between the two can be a little bit of a non-starter when the definition of the two words are so different:

Value – The importance, worth or usefulness of something

Cost – An amount that has to be paid or spent to buy or obtain something

‘Importance’, ‘Worth’ and ‘Usefulness’ are incredibly subjective concepts that can vary greatly from person to person. Trying to determine a one size fits all approach to determining the value of an item or service is just not possible and should be looked at on a case by case basis.

Telling someone that the new car they’ve just purchased, “wasn’t worth the price they paid”, is not going to get you anywhere and will probably only serve as an annoyance to the person at the bottom of ‘the hill’ of your moral high-ground.

Value comes in all forms

The FIRE movement can sometimes come across as very linear and quite unaccepting of any variations from the passive investment/ “don’t you dare buy a takeaway coffee”/ optimise EVERYTHING path.

And most of that makes sense, it’s proven to work and allow people to become more financially independent. But by not allowing any deviations from this path, we can sometimes lose focus on the things we buy that give us a lot more value than initially perceived.

The focus and drive within the FIRE movement can be inspiring, but sometimes we need to sit back and look at the bigger picture.

This can be the case with even the smallest things.

We all know buying beer at the supermarket would be cheaper than going to the pub, but if it’s budgeted for and doesn’t compromise your wider finances, an ‘overpriced’ pint on a Friday after a long week could be the boost you need to keep going. The value isn’t just in the liquid in the glass, it’s in the social interactions you’re building and maintaining within the pub environment.

Likewise the odd expensive meal out with friends or a partner might be a lot more expensive than a meal in, but it offers the same potential internal value as the above. As long as these things aren’t so regular that they no longer become special, or start to impact your finances, then the value is still outweighing the cost.

Side note – I recently reviewed of Beer52; a monthly subscription box that might be quite pricy on the outset, but because its only as frequent as one box a month, its a treat, and the value in exploring new beers I would otherwise never have tried, far surpasses the monthly premium.

An expensive golf membership is most certainly a luxury that isn’t needed and could save you a fair bit by simply not having it. However, having that thing to look forward to at the end of the day or week could be all the motivator you need to push through those last few hours at work. It could also hold value in being a place to meet other like minded people to meet and possibly even establish business connections that could become helpful later down the line. Ultimately, you probably just enjoy playing golf and a membership is just a necessity to maintain such a hobby…and what’s life without a bit of enjoyment.

It’s not just the physical value of an item we need to consider either. Sentimental value can play a huge part in whether something is worth paying the money for.

Paying slightly above the odds for a family holiday might not always fall under the optimised budget or a FIRE follower, but the memories created may be worth every penny spent.

The value of my morning coffee

I’m one of those heathens that regularly buys a coffee whenever I can.

I like to think of myself as pretty knowledgable on what makes a good cup, and see the benefits in freshly grinding my own beans, but takeaway coffee is something I cherish fairly regularly.

A lot of the time it’s 90% frothy milk and 10% coffee that could have been sourced from god knows where. Looked at in this way then the ingredients within this cup barely make a few pennies worth, let alone the £2.50 I just paid for it.

But this morning coffee, to me, is more than just the sum of its frothy parts.

It allows me time to reflect and settle myself before a busy day ahead. It’s something warming to comfort me on my early morning commute and boost morale on days when I’m just not feeling it.

It’s cost to me is pretty insignificant, but its intrinsic value is much more than just another hot drink.

I could make my own coffee at home – and I do some of the time – but it’s just not the same experience as walking into your favourite, friendly coffee shop and being served by the same friendly faces.

Cheaper cost; less value

Despite the wealth of cheaper options available that are just as good as their more expensive, branded cousins, getting something cheaper, for me, doesn’t always mean it’s of greater value.

I value my free time.

If something fits within my budget and I can pay for something that lets me get somewhere quicker or with less effort, I’ll pay for it even if it seems like it’s the more expensive option.

A taxi over a bus; a train journey over driving. If it means I cut X amount of time out of my journey, I’ll do it despite the greater cost.

But again, this has to come within the budget…taking the more expensive train to get to a destination for a weekend trip away may get you right into the centre of that place and won’t mean you’ll have to worry about parking, but taking the train each day to work could swing the cost/value barometer back in the direction of cost over value.

There’s also value in spending a little more on items of greater quality.

Buying a more expensive pair of jeans, for example, might see you more out of pocket in the short term, but will prevent you forking out more money when the cheaper pair rips easier and much quicker. It’s not just cost of the new jeans, it’s also having to take time out of your day to take those trips into the town centre to buy the new pair.


You can get obsessed with over analysing the cost/benefit of every area of your finances.

It’s definitely something to think about rather than always assuming cheaper is better, or before criticising someone for buying their morning latte. But you want to balance this with being smart with your budget and recognising these are still luxuries that could be cut if needs be.

I like to find value in the small things, like my coffees above, and the beers with the arty-farty artwork.

Taking value in these small things sometimes brings some of the simplest joys in life and makes that journey towards FI/RE that much easier and, more importantly, more enjoyable.

3 thoughts on “Cost vs Value

  1. Have seen many a FIRE blog recommend ditching gym memberships, yet while my savings rate benefited when my gym was shut, my health and fitness didn’t as I had little motivation to exercise at home. The fact that I’m paying for membership is part of the motivation to keep fit (I don’t want to pay for something I’m not going to use!) and during these COVID-19 days, it’s the only other place apart from the supermarket that gets me out of the house!

    Both me and my finances need to be healthy if I’m to have a happy FIRE life!


    1. Yeah the gym was one I missed off my list. Even those slightly more expensive ones like a David Lloyd that include saunas and a lounge/ restaurant area, but if that’s a place for you to relax, unwind and establish a routine to keep your mind and body happy, and it isn’t putting you in debt, then why not? I’ve been really bad lately and have only gone back to my gym once since they allowed people back in, but luckily it’snot too expensive 🙂

      Liked by 1 person

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