What's the true cost?
What is the cost of a free lunch?
My dad always said, “there”s no such thing as a free lunch.” As a teen, I disagreed. I consumed plenty of free pizza, Doritos, and Root Beer. It felt free.
Since then, I’ve now offered plenty of “free” pizza, drinks, and snacks. The truth is, it’s never free. But as the host of the event, meeting, or activity, I’m asking for time and more importantly, I’m asking for attention. And the price of a pizza, meal, or other incentive is nothing compared to what I'm asking for in return.
Attention.
Probably the most valuable thing we can give or ask for—all for the price of a pizza.
This week I’ve tried to regularly ask, “what is the true cost?” Here’s a few things that came up.
Not all costs are equal
People are frugal guarding their personal property; but as soon as it comes to squandering time they are most wasteful of the one thing in which it is right to be stingy”
Seneca
Let’s look at the pizza lunch example.
If you are only interested in the pizza and don’t care at all about the meeting, sales pitch, or people, then this is purely a transactional event. You sit and pretend to listen while you eat your free pizza.
The free Little Caesar’s pizza cost the host $5.
The free pizza costs you an hour of time.
The US federal minimum wage is $7.25. Even if you are paid the least amount possible, the pizza costs you more than the price of the pizza itself.
You could have bought the pizza, eaten the entire thing, and read a book that would help you become better at your job. You could have spent the $5 on a sandwich or salad and saved yourself the post-pizza lull. You could have tried to pick up an extra hour at work and made another $7.25. You could have spent that hour with people you love. There are lots of ways to spend an hour.
It’s a simple example with lots of variations but it’s worth quickly figuring out what’s really being spent.
Forms of payment
We pay for things in a variety of ways.
Money
Time
Energy/Attention
We see the word free and immediately consider the financial costs and forget that there are other ways to pay for something. When we look at an opportunity, we have to consider all the possible forms of payment.
The biggest cost of them all
Opportunity cost.
The moment you say yes to something, you say no to a host of other possibilities. Is what you are saying yes to, the best use of your resources?
Investment or cost
One quick way to weed out some of the things you might get sucked into but don’t really want to do is by considering whether you view the activity as a cost or an investment. It is easier to say no to things that are costs.
Always remember
We don’t always have time to calculate everything at the start of each decision. But we make a lot of decisions every day. The studies are so varied that it’s hard to believe any of them. Some studies say as little as 70 and others as high as 35,000 decisions are made each day by the average adult. Conservatively, that means you make roughly 70 decisions a day and you don’t have time to sit and stew over them all. This is when it’s helpful to know when to make quick decisions and when to be thoughtful. But if you’re making 70 decisions a day, the odds are that you will face the same decision again in the future. If you can file away the costs for various decisions, you will be able to move faster and more fruitfully in the future.
Everything has a cost
Even the things you decide not to do come with a cost. If I decide to not exercise one morning, there is a cost. I lose health benefits, endorphins, and for me, there is a slight tinge of anxiousness about whether I’ve lost my ability to stay disciplined. It may seem like we skate by when we choose not to do something but we still pay.