Cost per use
Cost per use is a heuristic that helps me make decisions about most non-perishable purchases such as clothes, vehicles, tools, devices, and even services. How much will it cost me if I divide the price by its expected number of uses? (View Highlight)
Cost per use accounts for longevity. Durable and repairable things may cost more upfront, but over time they cost less than things that break and need to be replaced. (View Highlight)
How many times do you wear a pair of socks before they develop holes? It may sound silly, but if you amortize the price of each pair of socks over their expected number of uses, a good pair of socks is a worthwhile investment. (View Highlight)
Not only will durable socks save you money, they also save you the hassle of throwing out old socks and buying new ones. Your time has value. (View Highlight)
Cost per use can also be used to measure the value you expect to get out of services like gym memberships, healthcare, or all-you-can-eat subscriptions like streaming services. (View Highlight)
My aim is to have fewer but better things. These are some of the questions I ask of the things that I incorporate into my life:
• Will it be as useful to me in the future as it is now?
• Is it made of durable and maintainable materials?
• Does it have a timeless style and aesthetic?
• Does it age well, wear well, build a wabi-sabi patina?
• Does it retain its resale value? Would someone else want to own it?
• Can it be disassembled and repaired?
• Does it have replaceable, non-proprietary parts that are easy to acquire?
• Can it be powered with a standard plug or replaceable batteries?
• Can it be modified and upgraded?
• Has the maker existed for at least as long as I hope to keep the product?
• Can it perform many jobs, or only one?
• Does it have a guarantee?
• Does it rely on other products or technologies that aren’t durable? (View Highlight)
A movement called “buy it for life” has sprung up around similar priorities. (View Highlight)
To make purchasing decisions based on cost per use, you should try to guess how many times you will use the product. This sounds obvious, but it can be hard to determine, especially if it’s something you’ve never bought before. (View Highlight)
If you are new to a hobby, like cooking or skiing, you may not yet know how many times you will use a piece of gear. It’s easy to significantly overestimate or underestimate how many times you will use something. (View Highlight)
You should, however, be able to guess the frequency of use. Is this something you might use once per hour, day, week, month, year? This will help you determine your budget. How many dollars per month do you want to spend on this? (View Highlight)
If you don’t know the frequency yet consider borrowing, renting, or otherwise trialing. Remember the ideal cost per use trends to $0. The most cost-effective choice is to not buy something you don’t need. (View Highlight)
There is an opportunity cost to every dollar. A dollar you spend on a something that won’t get much use is a dollar you can’t save for something that will. (View Highlight)
If you’re only going to use something once, then cost per use may not be the right heuristic for this decision. If you have disposable income, then the cost per use lens should nonetheless guide you towards something with good resale value. (View Highlight)
Durable things reduce cost per use by giving you more uses before they break. But you can also reduce cost per use by acquiring products at a discount. You may be able to buy second-hand, inherit, or barter. (View Highlight)
Durable things can often be great second-hand purchases because they are durable, and may not be the current fashion. (View Highlight)
How much joy can you get out of each dollar? Some things bring lots of joy for a small amount of money: ice cream, sunsets, nature walks. A cheap date can bring many smiles per dollar. (View Highlight)
Some things have excellent cost per use but few smiles per use. I don’t smile every time I put my nice socks on. A few years ago I bought a fairly expensive electric road bike. It probably didn’t have the best cost per use, but it gives me the most joy per use of any product I purchased in recent memory. It’s worth it to me. (View Highlight)
Some experiences have high intensity per dollar. A potency, concentration, or strength of experience. For example, foods can have high flavor per dollar — like hot sauce, pickles, curry, garlic, or mustard. Roller coasters, bungee jumping, or skydiving may give you a thrill per dollar that you can’t beat. (View Highlight)
Some purchases may have externalities that are incompatible with your values. For example, you may wish to buy organic produce, pasture-raised eggs, or fair trade coffee. You may wish to buy products that preserve privacy, reduce environmental impact, or support a cause you believe in. (View Highlight)
You can choose to incorporate externalities into the cost that you are paying instead of letting that cost be borne by others, or by society at large. This may increase your personal cost per use, but it might help change how society values things, or simply make you feel good. (View Highlight)
Knowledge has a cost. Sometimes that cost is monetary, sometimes that cost is time, sometimes that cost is pain. Sometimes it’s all three. (View Highlight)
You might learn more about investing by purchasing a handful of shares in public companies than going to graduate school. You might learn more about making movies by trying to film one on your phone than going to film school. (View Highlight)
Acquiring new ideas and perspectives can have a worthwhile cost. Being an early adopter of a product often has a poor cost per use, but its value is in the learning and experience per dollar. (View Highlight)
