Monday, July 16, 2007

The Difference between Cost and Expenditure

cost vs expenditure

For some people, including you, cost and expenditure may have the same meanings, both are an outflow of cash.

It is true that both are an indication of a cash outflow, but there is a difference in the inflow they brought to you.

Cost will be a cash outflow that may bring you benefit. What is considered as cost: gasoline for delivering service to a customer by Pizza Hut delivery service.

Expenditure is a cash outflow that will only cost you money but not giving you any feedback, for example: your taxi fare to a shopping mall for window shopping, it only cost you money but do not bring you financial benefit.

You do not have to be stingy to yourself that you have to differentiate every cash outflow as cost or expenditure, but you need to be careful of your cash flow if you want to develop your personal wealth.

You will not get any richer by spending your money for nothing, you may have fun now but you should pay later by doing so.

This kind of habit should be earned since you were young, but it is never too late to develop your thoughts now. It is better late than never.