There are money tradeoffs in most aspects of our lives. We have many choices and cannot do everything we want to do. For every choice we make, opportunity costs require us to forego benefits for the option not selected.
Opportunity costs are the loss of potential gains from other alternatives when making a choice. Tradeoffs between time and money differ significantly based on age and lifestyle based on our unique set of values.
With less time like Boomers as an older generation, you might place more importance on time while young people may favor money. That is not always the case. Here are the typical money tradeoffs we face.
The term of your loan can vary based on 15 years versus 30-year mortgages–another trade-off. The longer the loan, the lower your monthly payments. However, the 30-year mortgage raises your total costs compared to the 15-year loan.
You should be put savings aside for an emergency fund to cover at least six months of essential living costs. This habit will eliminate the stress of the unknown and reduce your need to abuse your credit card.