The Model Selection Cheat Sheet: Stop Overpaying for AI

I used to think "expensive = better." So I used GPT-4 for everything.

Then I got my first $200 bill. For a simple chatbot.

That's when I learned the truth: 90% of apps don't need GPT-4.

Here's my no-BS guide to picking the right model without wasting money.

The "Which Model?" Decision Tree

Stop reading long articles. Just follow this:

What are you building?

├── Customer support bot?
│   └── Use: GPT-4o Mini or Claude 3 Haiku
│
├── Writing content?
│   └── Use: GPT-4o or Claude 3 Sonnet
│
├── Generating code?
│   └── Use: GPT-4o or Claude 3 Opus
│
├── Extracting data from documents?
│   └── Use: GPT-4o Mini or Claude 3 Haiku
│
└── Complex analysis/reasoning?
    └── Use: GPT-4o or Claude 3 Opus

That's it. That's the whole decision tree.

Real Pricing (That Will Shock You)

Let me show you actual costs for common tasks:

Scenario 1: Customer Support Chatbot

100 messages/day, 200 tokens each

Model	Daily Cost	Monthly Cost
GPT-4	$0.60	$18
GPT-4o	$0.30	$9
GPT-4o Mini	$0.03	$0.90

Winner: GPT-4o Mini (same quality, 10x cheaper)

Scenario 2: Blog Writing Assistant

10 articles/day, 500 words each

Model	Daily Cost	Monthly Cost
GPT-4	$3.00	$90
GPT-4o	$1.50	$45
Claude 3 Sonnet	$1.20	$36

Winner: Claude 3 Sonnet (slightly cheaper, great quality)

Scenario 3: Code Generation

50 functions/day, average 50 lines

Model	Daily Cost	Monthly Cost
GPT-4	$1.50	$45
GPT-4o	$0.75	$22.50
GPT-4o Mini	$0.15	$4.50

Winner: GPT-4o (code quality matters)

The "Good Enough" Principle

Here's what I wish someone told me:

Most tasks don't need 99% accuracy. They need 85% accuracy that's fast and cheap.

When to Use Each Tier

🟢 Tier 1: Cheap & Fast (GPT-4o Mini, Claude 3 Haiku)

Use for:

• Simple Q&A
• Classification (spam detection, sentiment)
• Data extraction
• Formatting
• RAG applications
• Customer support

Why: 90% cheaper, 95% as good

🟡 Tier 2: Balanced (GPT-4o, Claude 3 Sonnet)

Use for:

• Content writing
• Email responses
• Summarization
• Moderate coding
• Analysis

Why: Best value for quality

🔴 Tier 3: Premium (GPT-4, Claude 3 Opus)

Use for:

• Complex reasoning
• Advanced coding
• Legal/medical analysis
• Creative writing
• Research

Why: Only when quality is critical

The 80/20 Model Strategy

This is my secret weapon:

function routeRequest(prompt, taskType) {
  // 80% of tasks: Use cheap model
  if (['classification', 'formatting', 'simple_qa'].includes(taskType)) {
    return callGPT4oMini(prompt);
  }

  // 15% of tasks: Use balanced model
  if (['writing', 'summarization'].includes(taskType)) {
    return callGPT4o(prompt);
  }

  // 5% of tasks: Use premium model
  if (['complex_analysis', 'code_generation'].includes(taskType)) {
    return callGPT4(prompt);
  }
}

Result: 85% cost reduction vs. using GPT-4 for everything.

The "Try Before You Buy" Test

Before you commit to a model, do this:

Step 1: Create 10 Test Prompts

Take real examples from your app.

Step 2: Run on 3 Models

Test each prompt on:

• A cheap model (GPT-4o Mini)
• A balanced model (GPT-4o)
• A premium model (GPT-4)

Step 3: Score the Results

Rate each answer 1-10 for quality.

Step 4: Calculate Cost per Quality Point

Model A: $0.01 per request, quality 8/10 = $0.00125 per quality point
Model B: $0.05 per request, quality 9/10 = $0.00556 per quality point

Model A is 4.5x better value.

Common Mistakes I Made (So You Don't Have To)

❌ Mistake #1: "GPT-4 is better for everything"

Reality: For classification tasks, GPT-4o Mini is 95% as accurate at 10% of the cost.

❌ Mistake #2: "I need the latest model"

Reality: GPT-3.5 is still fine for 60% of tasks. Don't upgrade unless you have to.

❌ Mistake #3: "I'll optimize later"

Reality: Start with the cheapest model that works. It's easier to scale up than down.

❌ Mistake #4: "My use case is special"

Reality: It's probably not. Someone has already solved your problem with a cheaper model.

The Decision Matrix (Print This)

If you need...	Use this model	Why
Cheapest possible	GPT-4o Mini	90% cost savings
Fastest	GPT-4o or Gemini Flash	<500ms response
Best quality	Claude 3 Opus	Top-tier reasoning
Long context	Claude 3	200K token window
Code generation	GPT-4o	Best code understanding
Balanced	GPT-4o or Claude 3 Sonnet	Best overall value

Real-World Example: My Chatbot

I built a customer support bot. Here's what happened:

Version 1: GPT-4

• Cost: $45/month
• Quality: 9/10
• Speed: 1.2s average

Version 2: GPT-4o Mini

• Cost: $4.50/month
• Quality: 8.5/10
• Speed: 0.8s average

Version 3: GPT-4o Mini + smart routing

• Cost: $2.10/month
• Quality: 8.7/10
• Speed: 0.7s average

The difference? I route complex questions to GPT-4o, simple ones to GPT-4o Mini.

When to Switch Models (Checklist)

Switch immediately if:

• New model is 30%+ cheaper with same quality
• Your current model price increases
• You find a model with better context window
• Your bill is >$50/month and you haven't optimized

Check LLM PriceCheck monthly for updates.

The "Start Here" Guide

If you're just starting:

1. Week 1: Use GPT-4o Mini for everything
2. Week 2: Measure quality. Is it good enough?
3. Week 3: If needed, upgrade specific tasks to GPT-4o
4. Week 4: Set up monitoring and alerts

Total time investment: 1 hour Potential savings: 50-90%

Quick Reference: Model Costs

Prices per 1M tokens (as of January 2026):

Model	Input	Output	Best For
GPT-4o Mini	$0.15	$0.60	Simple tasks
GPT-4o	$2.50	$10.00	Balanced
GPT-4	$5.00	$15.00	Complex
Claude 3 Haiku	$0.25	$1.25	Fast/cheap
Claude 3 Sonnet	$3.00	$15.00	Quality
Claude 3 Opus	$15.00	$75.00	Premium

The Bottom Line

You don't need the best model. You need the right model for your task.

Start cheap. Measure everything. Upgrade only when you have proof you need it.

Your wallet will thank you.

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Ready to calculate what YOU should pay? Try our LLM Cost Calculator and compare models for your specific use case.