There are so many things these days that fall into purchases as subscriptions – streaming services, website, news sites, games. It’s not a new concept; television and radio have long been filled with ads of “LOW MONTHLY PAYMENT.”
Retailers do this because it camouflages the actual cost of the item (we’ll go into this in another article). But we can turn this type of thinking to our advance by viewing purchases broken down into subscriptions.
The Pajama Cost
This started as a mental math game. My mental math skills deteriorate if I don’t use them, and so I started calculating the unit cost as I put things into my grocery basket. I was picking up food at a Target one time, and without really setting out to do it, tried to determine what the “unit” was on a set of cute pajamas.
I didn’t need new pajamas. I just saw them and wanted them. They were extra warm and fluffy and I could picture myself on a really cold night all snuggled in. Wait…I don’t live in a place where we get really cold nights. I thought about how heavy they were, and how often I would be able to wear them without waking up overheated…and found that I would probably be able to wear them maybe three times a winter. I know myself – one overheated night and I would get rid of them. So the cost of the pajamas, $30 would equal out to $10 a night. There’s not enough cuteness in the world to make me buy any clothing that has such a high cost per use.
Why View Things In A Cost Per Way?
I find that looking at potential purchases through the lens of cost per month/day/use allows me to determine if I am going to get that much value from the product. The mental game expanded, and now one of the deciding factors of any discretionary purchase is the cost per month/day/use.
I find it cuts down on impulse purchases, and also inspires me to make better choices with my money.
Cost per use: the bread machine
My mother used to make all of our bread from scratch because of her allergies. When I grew up, I wanted that fresh from the oven bread, but didn’t have the skills and time to make it they way she did. Then bread machines became a thing. You dump everything in, and a few hours later you have a fresh loaf of bread.
I have a bread machine now, but I don’t use it very often. It sounds like a tank, and sometimes the bread ends up rock hard. I have probably used it 5 times in the past year.
My daughter suggested I get a new machine. If they cost $100, that means that if I use it 5 times I will produce $20 loaves of bread. Not a good use of money (or storage space, given the size of the machines) when I can go to the German store at the end of the street and pick up a fresh loaf for $4.
Cost per day: the car
A friend of mine, who lives in a city with excellent public transportation, decided she wanted to buy a new car because her current car is 6 years old. She lives close to a metro station and takes the train to work three times a week – she never drives in because of the congestion and parking costs. She uses her current car maybe two or three times a week to buy groceries and run errands.
She was looking at two cars: the newest model of her current car, a Subaru Outback, or a BMW SUV. She chose the BMW because she thought it was more impressive. She can afford either easily.
The Subaru starts at 29,000. The BMW at 41,000. If we were to compare these prices broken down over 5 years (the length of her loan), the Subaru would come out at $15 per day, the BMW at $22. When she realized that she would be spending either amount for a car to sit in her parking garage unused, she decided to stick with her current car, which is paid for and has no mechanical issues.
Cost per month: the cell phone
Don’t get me wrong – I love my iPhone. But I also don’t have the latest and greatest. Not only that, I don’t upgrade when the new models come out. I wait until the phone dies or cannot be updated anymore before I will replace it.
A friend of mine has to have the latest on the market. As soon as the new model comes out, he is at the Apple Store, trading his old one in and getting the new one.
The iPhone site breaks things down for you in how much you pay per month. My phone, a 15 plus with 128GB, is $33.29 for 24 months. A little over a dollar per day. My friend got the 16 plus with 512 for $49.95 per month for 24 months.
You can see the cost right there, no mental math needed. But when you consider that he will upgrade at the end of the 24 months, and I will keep my phone for another 2 years beyond, it becomes $16.65 per month for mine, while his is still $49.95 for the duration of the phone ownership.
Unforeseen Advantages of Subscription Thinking
When I started doing this, it was simply a way to keep my mental edge.
What I have noticed is that the more that I do this subscription mindset thinking, the more I hold back on unnecessary purchases.
This leads to saving myself from having to find places to store things, as well as having to maintain things.
It’s not about depriving myself. It’s about thinking things through in a way that puts their relative cost in perspective.
In Conclusion
By breaking down purchases into their cost per use, day, or month, you gain clarity about the true value of items in your life. This perspective helps you make better financial decisions, reduces clutter, and ensures that the things you do choose to buy truly enhance your daily life. The next time you’re considering a purchase, try calculating its subscription cost – you might be surprised at what you discover.
