In Trent Hamm’s book 365 Ways to Live Cheap, he talks about a very interesting concept that I would like to share with you in this post.
The concept is called ‘cost per use’.
Here’s how Trent explains it: “How much do I have to pay for each use I’m going to get out of that item before it spoils or breaks? … The “sweet spot” of a purchase, then, is the one that has the most uses for the cost.”
Let me share with you a little experiment you can do to see how applying this concept can save you a lot of money.
Here’s how to do the experiment:
- In your next visit to a grocery store, pick one item to be your test subject.
- Buy both the small size and the big size of that item.
- Count the number of uses for each size.
- Divide the cost over the number of uses to figure out the cost per use.
- Try to answer this question: Is the big size usually cheaper?
That experiment is designed around consumable goods. How about other things like clothes that are measured by the length of use (i.e. how long could you use it before it looks old or goes out of shape?)?
In this case, will the expensive high quality item be cheaper?
From my personal experience, expensive items are always cheaper, because they are more durable.
Doing this experiment and understanding the ‘cost per use’ concept will prove to you that midway simplicity is far better than radical frugality. You can enjoy buying expensive items without feeling guilty, because usually their ‘cost per use’ will make them cheaper!
Enjoy your next purchase