Opportunity Cost of a Haircut

Those that have known me for several years have probably noticed that my hair style doesn’t vary by much from year to year. A lot of that has to do with the fact that I have four cowlicks embedded on my scalp and there are two ways to deal with the hairy mess; 1 – Keep it long or 2 – keep it short. As you have guessed, I have opted with the short route. The short hair style didn’t come to me by accident as I actually weighed the pros and cons and found that the ladies, and by ladies I really only mean TJ, prefer me with shorter hair. It also doesn’t hurt that maintenance is horrendously low as it requires zero hundred minutes to style in the morning and I can get away with one bottle of shampoo for a year or two. Short hair also makes it very easy to groom. So easy in fact, that I’ve decided to never pay someone to cut my hair ever again.

As a result of this, for the past three years I’ve spent a grand total of $0 on haircuts. I dropped $30 at Wal-Mart to pick up a pair of clippers and scissors over three years ago and have had TJ cut my hair since. This was a trend I picked up in college when my buddies started cutting each others hair in exchange for a haircut in return. Here are some fun numbers that I came up with:

Average cost per haircut: $15

Cost of clippers: $30

Number of haircuts since I bought the clippers: 58

Realized savings: $870 – $30 (clippers): $840

Not bad overall for a good haircut. In my opinion TJ cuts my hair better than anybody can. I’ve had stylists go at it and somehow they end up missing a chunk of my hair or try too hard to impose their own flare to my head. I feel that I’m getting a great steal here; better haircut and for free! But the realized savings can be even crazier if I make good use of it.

In simple terms opportunity cost is the benefit you could have received by taking an alternative action. Rather than spending $15 on a haircut every three weeks as I am accustomed to, I could put this money towards my mortgage or even invest it. Right now I am taking $15 after every haircut and putting it towards our mortgage which has a current interest rate of 6.25%. At our current rate of payment, we will have the mortgage paid off in about 15 years. So here’s the math for my “free” haircuts:

Monthly savings: ~$22 (Roughly 17 haircuts a year at $15 per cut)

Interest rate: 6.25%

Years: 15

Extra-payments made on mortgage: $3,960

Savings from interest: $2,359 (3 mortgage payments)

Total savings/Opportunity cost: $6319

Obviously this is a no brainer for our family and probably for a lot of guys too. Most guys can get away with a manageable hairstyle that a friend or wife can help maintain for cheap. Just make sure you don’t end up on this website.

About Jason

On a journey towards minimalism and crafting the perfect cup of coffee. View all posts by Jason

3 responses to “Opportunity Cost of a Haircut

  • clew2tango

    aw fooey. i was trying for so long to end up on mulletjunky.

    i’m opting for the short everywhere style now too tho. is TJ taking any requests?? =D

  • Amber Lo

    Ok, I WISH I had TJ’s mad hair cutting skills. If I had known she was so talented when we lived in Austin, I probably would have asked for a lesson. I absolutely stink at cutting Tru’s hair! I’ve tried over and over and I don’t think I’m getting any better. He owns clippers, and his hair grows super fast, so we try to cut it ourselves at least once in between his paid haircuts. If he never got a paid haircut, I don’t think I’d want to be seen with him in public. I’m that bad. So, your opportunity cost equation only works out if the wife has some level of hair cutting skills. Sadly, this wife does not!

  • TJ Poon

    I have no idea how this has worked out, because I didn’t sign up for this gig! When Jason and I came back from our STINT year in East Asia 4 years ago, he put a pair of scissors in my hand and forced me to do it. I had NEVER cut hair before, and I was a nervous wreck, but he told me I was cutting his hair. So I did.
    I would definitely not know how to give you lessons, Amber, because I have no idea how to cut hair! Haha… confidence inspiring, huh? Seriously, I think I only know how to do Jason’s.
    Sorry, Clew, you’re out of luck… I don’t think I would ever attempt to cut anyone else’s hair! Too much pressure!

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