Do you know the difference between price and cost? The terms “price” and “cost” can be confusing. The two terms are related, but quite different.
The price is the amount you pay for a product or service. When you pay a price for something, the price represents the value of what you give up in order to purchase the product or service. The cost is the amount spent by the business to make the product or deliver the service.
Let’s say you want to buy a candy bar.
The price of the candy bar was set when the manufacturer determined what they thought you would be willing to pay for their product. As you stand at the candy counter you confront the question, “What am I willing to give up for some chocolate right now?” Then you make your decision.
The cost, however, was calculated by the dollars and resources it took to produce the candy bar and make it available to you for purchase. To determine his costs, the confectioner calculated the ingredients, amount of labor and other hard costs such as equipment, manufacturing, packaging, selling, shipping, profits, etc. Then he considered what the consumer would be willing to pay for the product and set the price.
When you look at what you want to do with your life a similar price/cost comparison must be made, but the comparison will include much more than ingredients, packaging, shipping and profits.
In the late 1960s I took my wife and two small children to Africa. Our first term there was to be three-and a half years. Our mission board helped us calculate the price which included airline tickets, shipping personal goods, and the anticipated expenditures required to live in a foreign country.
The cost, however, involved much more than money. For one thing, we would take our grandchildren from their grandparents. What would be the cost to our parents of missing out on three plus years of their grandchildren’s growth? How would it affect our children?
Another cost was the selling at auction of nearly all our household goods and furniture. As a young married couple we paid what we thought was a high price to purchase the items. But the cost of selling them seemed to us much higher as we did not get the price we hoped for from the sale.
In central Africa our children would not have access to good schools. It required us to put our oldest child in a mission boarding school located over 1000 miles from where we lived. It was expensive to send him there (the price was high) but the emotional cost to him and to us was even higher, while the value received to him later in life made both the financial and emotional sacrifice worthwhile.
You must make a price/cost analysis required for the achievement of your dreams. In many cases you will not measure the cost using dollars but rather the emotional, physical, spiritual or other costs (investments) necessary. The price of following your dreams is one thing. The cost to you and the ones you love is something else.
That is why Jesus counseled those who wanted to follow him to “count the cost.”
©2014 Ronald D. Ross
- 2.6: Prepare for action – PLAN
- 2.8 Prepare for Action: Set Real Priorities