True Cost of a Purchase

What does that financed $1,500 TV actually cost you? Total interest, plus the opportunity cost of investing that money instead, plus the hours of your life it represents.

📖 About this tool

What it does

Three lenses on the real cost of a purchase: financing total (price + interest), opportunity cost (what the money would grow to if invested), and life-hours (how many hours of work the purchase represents).

Who this helps

Anyone tempted by 'buy now, pay later' or financing high-margin items. Frames the trade-off concretely so impulse buys slow down.

How to use it

  1. Enter the sticker price.
  2. Enter the financing terms (APR + months) — set APR to 0 if paying cash.
  3. Pick an investment return rate and a horizon (years until retirement).
  4. Enter your after-tax hourly wage to see the life-hours framing.
  5. Read the verdict — usually surprising.

What it doesn't do

Doesn't compare similar products against each other (this is one purchase at a time). Doesn't apply to investments / appreciating assets — only consumption.

The Purchase

What You're Buying

Financing

Credit card APRs run 18-30%. "Buy now, pay later" plans hide finance charges in monthly fees. If you'd pay cash, set APR to 0% to skip the financing cost layer.

Opportunity Cost

"If you'd invested the price instead at the S&P 500 long-term average (10%), what would it be worth at retirement?" That's the cost of the trade you actually make every time you spend.

Hours of Your Life

Annual take-home ÷ 2,000 hours. A $80K take-home → $40/hr. The "what does this cost in life" framing tends to slow impulse buys.

The Real Price Tag