Buy Wisely

This post is based on the Step Ango Blog's post with the same title: Buy Wisely (opens in a new tab).

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?"

He describes this as a way to make better decisions when buying something. Essentially, you look at how many times you use an item and divide the price by the number of uses. A more expensive item that you use more often may be cheaper per use than a cheaper item that you use less frequently.

"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."

How to Get Durable Things

We should aim to get fewer but better things and to take care of them. Here are some questions to ask yourself before buying something:

• 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, and 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?

Not all products will meet all these criteria, but the more they do, the more likely they are to be durable. Just "buy it for life."

How to Estimate Uses

When you first consider a purchase, understand the type of product you are buying.

"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."

Always guess the frequency and duration. Is it something you might use once per hour, day, week, month, or year?

Remember, the ideal cost per use trend is to be as low as possible, but that's not always the case. Sometimes you need to buy something that you will use only once, like a tool for a specific job or a dress for a special occasion. In these cases, you should aim to buy the cheapest option that will get the job done, like borrowing, renting, or buying used.

"There is an opportunity cost to every dollar. A dollar you spend on something that won’t get much use is a dollar you can’t save for something that will."

Reducing the Cost per Use

There are some ways to reduce the cost per use of something you already own:

• Buy second-hand
• Look for discounts
• Change the way you use it

Other Heuristics to Consider

• Cost per smile: How much does this make you happy? Some things bring lots of joy for a small amount of money.

• Cost per thrill: Some experiences have high intensity per dollar. A potency, concentration, or strength of experience.

• Cost per externalities: Some products have hidden costs that are not included in the price. These costs can be environmental, social, or personal.

• Cost per lesson: Knowledge has a cost. Sometimes that cost is monetary, sometimes it is time, sometimes it is pain. Sometimes it’s all three.