I think about money a lot. That comes with the territory of writing about money for a living, but I know I’m not the only one with dollars on the mind right now. Rising prices are making budgeting trickier than ever, and making a purchase often feels more significant than it did in the past. Like most consumers, I’ve experienced my fair share of shopping regrets after not being intentional about my purchases, but in this day and age, I quite literally can’t afford to not put thought into everything I buy. To ensure that I don’t have any major regrets post-purchase, I’ve been turning to the cost per use method to help me get a clear picture of when a purchase is worth spending my hard-earned money on.
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At the top of this year, I meticulously planned a budget for clothing and accessories, relying heavily on this method, and so far, I’m finding that I don’t have any purchase regrets! More importantly, I feel like my money is going a little further. Now, anytime I make purchases (especially large ones), whether it’s clothing or otherwise, I am turning to the cost per use method to prevent that icky, wasteful feeling post-purchase. Here’s how I’m doing it, why it matters, and how to implement the method yourself.
What is cost per use?
Cost per use offers a way to measure the potential value of a purchase by dividing the total cost by how many times you’ll use or wear it. The lower the cost per use, the more worthwhile the purchase tends to be over time. While the cost per use method is a popular consideration when buying clothing (this is often called cost per wear), you can apply it to a wide variety of purchases. How often you plan to use a laptop is just as important as how often you intend to wear a new purse. Of course, there are no guarantees you will use the item as much as you originally calculated, but slowing down to consider usability will help you avoid making purchases that sit in your home for years with the tags still on.
How to calculate cost per use
To calculate the cost per use of an item, divide the total price of the item by the number of times you think you’ll use it. Let’s look at a real-life example of how I relied on the cost per use formula before buying a new pair of sunglasses:
I wear the same pair of sunglasses daily, and I only replace them every five or so years once they fall prey to a terrible accident. With that in mind, I felt confident breaking down the cost per wear of a $495 pair of sunglasses to just 27 cents per day. How did I get there? If I wear them 365 days a year for five years, that is 1,825 days of wear. $495 divided by 1,825 is roughly 27 cents.
While cost per use wasn’t the only factor I considered (quality and style were important, too!), seeing how low my daily spend would be gave me the confidence to invest.
How to determine how often you’ll use an item
I wish I could say every purchase decision was as simple as my sunglasses example, but there’s usually more to it. Getting real about how much you’ll actually use an item in order to calculate cost per use requires thought. So, before I buy something, I like to slow down and think about how much use I’ll actually get out of it. Here are the questions I always ask myself before shopping to estimate the true use of a potential purchase:
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- How many situations will this be useful for?
- Will this item help me get more use out of something I already own?
- Is it versatile enough to be used across different seasons, occasions, or tasks?
- If I already own something similar, when would I reach for this instead of the original?
- Will I still want to use it even if the novelty wears off or trends change?
- Am I buying this because I truly want it, or because I’m bored, stressed, or influenced?
- Is it made of materials that will hold up over time or require extra care?
- Does it fit into my day-to-day life?
- Will I actually have chances to use it?
The final question on the list is the hardest for me to answer honestly. As a new mom living in the very casual state of California, I tend to be overly optimistic about how many opportunities I have to wear dresses, heels, and other “fancy” clothes, for example. Using the cost per use method helped me get away from the mindset of “I love it, so I’ll use it” to focusing on realistically determining how much use I’ll really get out of a purchase. In the past, I judged purchases based on sticker price, but now I consider longevity and versatility. That way, even if something fits in my budget, I only buy it if I know it will add substantial value to my lifestyle or wardrobe
When it’s OK to buy something with a high cost per use
Using the cost per use formula when considering a new item is helpful and impactful, but it’s important to remember that your end goal isn’t necessarily to spend the least amount of money per use possible. It’s equally as important to consider the value of the item or how it contributes to your life as a whole. For example, I don’t expect to achieve a very low cost per use with evening wear. I have no problem being an outfit repeater, but you only attend so many special events each year. The $126 dress I bought for a wedding this year has a cost per wear of $42 if I wear it to the two other weddings we have on our calendar. I’m OK with that! Plus, I love them.
Sometimes, cost per use is a little higher, and that’s OK if you’re making a thoughtful purchase. Thoughtful purchases lead to a lifestyle and budget you love, so instead of rushing through your next shopping trip, weigh its value and the cost per use to ensure you’re shopping with intention.
