Everyday Money
A Cost-per-Use Estimate Depends on Uses That Have Not Happened Yet
Dividing a purchase price by a large number of future uses can make almost anything look inexpensive. A cost-per-use estimate is easier to judge when its…
Financial ideas, carefully read
Open the reading room
Concepts in Focus
Markup and Margin Use Different Starting Points for the Same Sale
An item bought for eighty and sold for one hundred has a difference of twenty. Describing that difference as a percentage requires choosing a denominator,…
Concepts in Focus
Opportunity Cost Is About the Best Alternative You Give Up
A choice can have a cost even when no money changes hands. Opportunity cost gives a name to the value of the best alternative that the decision leaves…
Concepts in Focus
A Sunk Cost Belongs to the Past, Even When the Decision Still Feels Unfinished
A money book may describe a decision made worse by a payment that cannot be recovered. The useful question is which costs still change between the options…
The Reading Desk
Three Budget Scenarios Are Not Three Assigned Probabilities
Read low, middle and high financial scenarios as conditional examples unless a source explains why particular probabilities belong to them.
Everyday Money
A Coupon Threshold Can Lower the Price and Raise Your Spending
Compare a fictional threshold discount with the purchase you originally intended so the saving label does not hide an increase in total spending.
Concepts in Focus
A Currency Conversion Needs a Direction Before a Multiplication
Use an invented exchange-rate example to distinguish units per currency and avoid applying the same multiplication in both directions.
Everyday Money
Splitting a Shared Bill Starts with the Total Everyone Agreed On
Work through a fictional shared expense with unequal contributions and distinguish the original bill from the amounts people still owe each other.