In April, a recruiter contacts Bill. The role is in a different city, 1,400 euro net per month. He is currently earning 900. The difference is 500 euro per month, or 6,000 euro per year.
He makes a list of what the move would cost. A security deposit of two months rent, assuming 600 per month: 1,200 euro upfront. Moving costs: approximately 400 euro. Setup for a new flat: another 200. Total one-time cost: 1,800 euro. He has 4,260 in savings. He can cover it.
Opportunity cost is the value of the best alternative foregone. Staying in his current job costs Bill 500 euro per month in foregone income. Over the remaining months of 2025, that is approximately 4,000 euro he will not earn. The one-time relocation cost of 1,800 euro is recovered in less than four months at the higher salary.
The calculation is not close. The financial case for taking the job is clear.
What the ledger cannot measure is the weight of leaving. The city he knows, the routine he has built, the colleagues he likes. These are real. They do not appear in the opportunity cost calculation because they have no agreed monetary value.
Bill accepts the offer. He negotiates a start date in September to give himself time to prepare.
The tip
When evaluating a significant financial decision, calculate the payback period on the cost of transition. If the gain recovers the transition cost in under six months, the financial case is almost always clear. What remains is everything the ledger cannot measure.
Opportunity cost evaluation, April 2025: foregone income of staying = 500 per month. Relocation cost = 1,800. Payback period = 3.6 months. Decision: accept. Start date: September 2025.
Bill is 24. Every episode, we read his personal ledger through accounting eyes. / FY 2025 ledger