Finance: In our Daily Lives
Updated: Sep 14, 2019
The genre of Finance as well as all other business-related fields covers a wide range of topics. The knowledge in these fields do not necessarily need to be learned through a major, or form any courses. In fact, people use financial tactics in their everyday lives without even knowing so.
First, is the concept of opportunity cost. Fundamentally, the opportunity cost is the benefits being given up when making a decision. For example: if a man were to choose to get a job after graduation instead of going to college, the opportunity cost would be getting further college education. This relatively simple term is a part of every decision. Everyday people may not know of this “opportunity cost”, but when making decisions they are all unintentionally taking into account this factor. The identifying of opportunity costs is a key role in the decision making process for businesses, as well as any financial choices one might make.
Second, is the PPI (or the price per unit) ratio. Essentially, it is exactly what it sounds like. The PPI is how much one single unit may cost in some type of wholesale deal. These were often learned in basic middle-school mathematics, through the use of ratios. For example, suppose there was a pack of 20 biscuits being sold for $5. To find the price per unit, simply divide the price by the number of bisect to find the price per unit which is $0.25. Therefore, one biscuit alone would cost $0.25. Avid shoppers can use this financial technique to compare two or more deals to decide which one is the better deal.
Ultimately, business and finance concepts are often unintentionally used by the everyday person to benefit their lives in a matter of ways. If these people were to take courses to better grasp these techniques, the benefits would only go up. Individuals would have better decision making skills, prevent downfalls, maintain a stronger financial structure, and more.