We established that everyone has a price. Everyone has a limit of how much self control, resistance, or willpower they have before the rewards for the action opposite outweighs the rewards for the desired action.

This applies to your finances, as well, and this is why personal finance is so very personal.

An example I have exhibited recently is with my car. I wanted to save; my intentions where to bring my net worth up by a substantial amount in 2012. I also wanted to go on a trip and be able to buy a new couch. My “price” was the prospect of having no car.

In simpler terms, I was excited and more than able to save for all of those things I listed above, but I wasn’t willing if it meant having no car. I obliterated my plans to reach those goals by taking on new debt, because for me, the opportunity cost of having a car outweighed the opportunity cost of buying those things and increasing my net worth.

Where this really gets people in trouble, is if their opportunity cost for material things or spending frivolously is higher than their opportunity cost for paying bills and being financially responsible.

In simpler terms, people get in trouble when their opportunity cost for the “wants” outweigh their opportunity cost for the “needs”.

Sure, paying for food and hot water, health and shelter, those aren’t fun things to have to pay for. I’d, too, rather spend my money on trips to Mexico and a cute dress from my favorite store.

But will I do that at the cost of my ability to pay for my means of getting to work?

If debt wasn’t an option, we’d really be able to see where our opportunity costs lie. If I wasn’t able to take on the car loan, would I have spent my entire income on a car, or would I have realized I couldn’t afford to do that and moved closer to work and school?

If debt wasn’t an option, would some of the people that Gail Vaz Oxlade helps on ‘Till Debt Do Us Part let their homes foreclose to pay for their boats and lattes, or would they cut those out of their daily spending diets?

Where do your opportunity costs lie? What are you willing to forgo for your lattes, your iPad, and your Manolos?

Before sinking yourself into more debt by purchasing that dress in the boutique below your office, think about this “If I didn’t have a credit card, what would I be not paying for to buy this dress?” If the answer is nothing, because you have more than enough cash in your account for the dress, your bills, and your savings, great.

If the answer is security, or the contribution to your emergency fund, you should be weighing the opportunity cost between your financial security and the amazing pattern of that adorable dress.

What if the answer is your RRSP or Roth IRA contribution? Are you willing to forgo your future stability for a dress you’ll grow tired of in six months?

Weigh your opportunity costs as if debt wasn’t an option. It’s hard to do, because debt is an option for most of us, but it really helps put some things into perspective.

Individual Opportunity Costs is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

I used to have a mental block when it came to term positions. I’m young, not too risk adverse, and was capable of far more than what I was doing in my term position, but I was still struggling with wrapping my head around taking a temporary position instead of a regular one.

There are some downsides to temporary jobs, to be sure. These of course include lack of vacation and benefits, job or contract hunting far more often than you might want to, and various other things, but it turns out temporary or contract work can be one of the things that propels you forward in your career.

Here are some of the pros:

1. Things stay interesting

Instead of getting bored at your day job because you’ve been there for three years and know the role inside and out, you always have a challenge when you are taking contract work. After all, you have to get to know the company, the policies, the systems and processes.

Contract hunting can actually be quite fun, especially when you get good at it.

Work is never boring when you are on a contract.

2. Having an up-to-date resume

Constantly job searching requires you to always think about your resume so that you can update it with your skills, abilities, and accomplishments. It also keeps you on the ball with constantly thinking about potential answers to interview questions.

If you aren’t searching for awhile, it’s easy to forget about thinks and look past them when updating your resume the next time a desirable job comes around.

3. Freedom

Unlike with a full-time, permanent job, contract or temp workers have the freedom to pick up at the end of their contract and go wherever they want to go. Maybe they want to work in another country or city, or travel.

There is a lot of freedom with contract work. You are your own boss.

4. Diversifying Your Skills

Even if you are on a contract in the same field but a different industry, you are expanding your skills far beyond what your regular full time job will allow. Not only do you become more adaptable but you also have the ability to learn about different industries, companies and ways of doing things.

This is quite desirable in a career and as you continue to pick up contracts, they will come easier and easier.

3 Reasons Why Working Temporary or Contract Jobs Is Awesome is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.