Spending Cost Calculator
When you spend money on non-essential, non-investment type products or services, you simultaneously give up the right to earn interest on the money you spent ... for the rest of your life. The same is true when you spend more than necessary on essential and investment-type products and services, i.e., you give up the right to earn interest on the difference. In either case, the total of the money you spend unnecessarily, plus the forgone interest earnings, represents the real cost of spending (usually an amount much higher than is actually printed on the price-tag). Therefore, in order to make wise purchase decisions (expenditures that return a benefit of equal or greater value than their real cost), you must be aware of -- and give full consideration to -- the real cost of each purchase. This calculator will help you to do just that.

A few things to keep in mind:

  • The stock market has averaged a return of 10% over the long run.
  • If you invest your savings in paying off high interest debt, you could earn an even better return.
  • Be sure to include any sales taxes that might apply when entering expenditure amounts.
  • Some items you buy come with additional costs of ownership -- such as repair and maintenance costs, operating costs (gas, electricity, etc.), insurance costs, storage costs, etc..
  • The calculations do not account for inflation.

Enter the dollar amount of an unnecessary, non-investment type expenditure you are contemplating:
Enter the annual interest rate (%) you feel you could earn if you were to invest the money rather than spend it:
Enter the number of years you would allow your investment to grow (number of years until retirement, if applicable):
Forgone interest earnings:
Real cost of expenditure: