We basically consume things as we live. As one simple way of assessing value when deciding whether or not to buy something, I calculate the price I’ll pay for it by the hour and put it in context of some other things to see how it stacks up. It’s a simple assessment of what the price is, divided by much time it could take up in my life, and compare to something else.
A new tablet. $300, use, on average, over half an hour per day for two years. That’s $300 for at least 365 hours. For simple math, I go for 400 hours so $0.75 per hour. Compare that to a movie without extras that’s about $5 to $7 per hour (Canadian prices). High speed Internet at home that is about $0.50 per hour for me. A full sized piano keyboard that’s currently at $2 per hour. Current four years old desktop that is going under $0.50 per hour.
The call to buy or not is arbitrary pending other factors I’ll go over below, but this gives me a lot of context. I go for it but I commit to keeping that tablet for at least 2 years (and I recall this if I get a new one sooner than 2 years).
Of course, other considerations must be taken into account for the calculation:
- Use with other things. I may not use my tablet at all times without other things like app purchases. That’s fine. Calculate the other things for what they’re worth. Nobody ever only consumes one thing at all times in their lives.
- What else can you get for the same or better value that you might want to get instead? This often stops me as I opt for some other thing.
- Compare similar things. This is valuable for new, rare and/or unique things, especially the costly ones like those on vacation. For such things, compare what you can imagine in looking forward to the thing or experience, and compare it to something similar in theme (not necessarily same sort of thing because unique stuff is hard to find similarities for comparison). For considering things or experiences you were purchasing again, ask if that was worth the money at that rate.
- Stuff you can’t calculate. There is a lot of things you can’t calculate, like the social value to make new friends, or see some person you’re interested in getting to know better among a group of friends at a movie, that can overrule, or be worth the value of the something more costly, or novelty of a new experience that could lead to more things, a fun memory, etc. That’s great! Go for it! Just keep the total in check for what you can afford in your life. That’s a bigger calculation that’s not actually hard to estimate, but you’d need to know some details about how much you spend, save, want to save, etc. Keeping enough financial data about yourself is the hard part there, but I have that to help me.
- Other things still. Whatever you can dream up to consider, whether to overrule or help make the decision more systematic and rational. Sure, add it in! It is your calculation!
- Go with your guts if all else fails. As stated.
It’s far from a perfect system or model for deciding whether or not to buy things, but for starters, I think it’s a damn good one!