My procedure to get rid of things, is to every so often collect all things of the same type that I own, like t-shirts, or hair product or whatever, and count them. That’s usually enough to scare me into donating what I can and thinking hard about buying anything of that type for a while.

It’s pretty horrifying to realize you have 8 bottles of conditioner around your bathroom. Not that they’re expensive, but they’re still crap taking space around the house, and you won’t pick up that extra bottle if you *know* you have 8 bottles at home.

I tend to think carefully about bigger purchases so that’s not too much of a problem, but smaller purchases do add up.

Pet peeve: data is a plural word. It’s “Organize these data” not “Organize this data”. I can’t believe how many places I’ve seen this done lately. Captain data to the rescue

>>That maintenance “cost” is hard to quantify,

Drak, one maintenance cost we can look at is cost per square foot. I pay $950 per month for my 950 square foot house, and for the semi-unfinished basement beneath it. Let’s assume the basement is also 950 sq ft. So, the 2 sq ft box containing ALL of ST:NG on video tape takes up $0.50 per month. Of course, I’d be paying for the square footage anyway, but wouldn’t it be better if that space was taken up by a work table so I could do my own small appliance repairs and save myself some money?

I hate clutter. One of my basement goals is to set up shelving so my Beautiful Things (much better than tchotskes) can be rotated in and out of the house instead of having them all in the living room at once.

I like the general premise here, though it seems like too much work for me. My parents are packrats, too, so I definitely identify with that. My husband can be a bit one, as well, so that leads to some *interesting* household discussions. For example, a friend gave us a homemade thingajiggy for making beer. My husband has never once used this (we have two small kids, and it’s makes a lot more sense to just buy beer at this point). But he holds on to that beer thingy, because he thinks he’ll use it someday.

Not a big deal, since it was free, except now we’re getting ready to sell our house and so we’ll actually pay for a storage unit, into which will go things like the beer thingy. So, we’re paying to store something we’ll never use. Ooh, my hackles are up. My point is that, with some folks, all the numbers in the world don’t matter. Things sometimes have emotional value that is hard to overcome.

Anyway, I’m a huge fan of purging. I try to take a bag of stuff to the thrift store every month. Man, have we accumulated a lot of crap! This has really forced me to re-evaluate my spending. I add up how much the stuff I take to the thrift store cost the first time around, and we could probably have made a few extra mortgage payments this year.

Makes you stop and think when you’re at Target: do I really need another Buddha candleholder? Or is it a future thrift store donation?

Jen

I agree with the other comments - its really about mindfulness, and how tracking your past spending/utility can lead you to better purchasing decisions in the future. I think what would be really valuable is to do this on a monthly/quarterly basis, and trend the costs-per-day for various categories. If you cost-per-day for shoes is trending downward, then you are using them and recouping utility & value. If the cost per day is staying flat, then you are either not using the item; and if its rising, you are spending more. The Wii is a great example — very high cost-per-day right when you get it, but it should trend downward sharply if you play it often. But that trend-line could jump back up if you are buying games / accessories. If the trend-line keeps going back up, that should be a clue to you that you are buying games/accessories, but not really getting the value out of them.

For something like books & DVDs, you could take a look over the previous year at your “consumption”, and decide if alternatives would be better. If you are spending a lot of money on books / DVDs, but only watching or reading them once, you cost-per-day will go up (a $20 movie watched once is a constant $20 cost-per-day). Then maybe you’ll find that switching to your library or Netflix may make sense! Or it may convince you to sell some of your DVDs/books, and recoup some of those sunk costs.

The other point about this, and I think its a good one, is having “clutter” is expensive, both economically & mentally. It costs you money to purchase “stuff”, and then you have to maintain “stuff” — dust the knick-knacks, wash the clothes, organize the DVDs, straighten up the bookshelf, etc. That maintenance “cost” is hard to quantify, so using a metric like cost-per-(usage)-day seems like an appropriate proxy, so when the emotional appeal of a potential purchase is high, your intellect has something to counter with to force you to decide if its really necessary.

Another extreme example: Let’s say you live in a part of the world with unreliable power, so you buy a backup generator. You use it three days a year, and your cost per use is therefore horrendous. Should you get rid of it? Well, sure, what’s three days, right? Other than your tropical fish are gonna croak or your clients will abandon you.

Now, weighing the cost beforehand to determine which generator you’re going to buy is smart, just as it is with shoes or sweaters. You can look at something like a fancy TV or dress the same way–and even doing cost-per-day calculations if they help (”every time I watch this TV, based on my habits and my knowledge that in five years I’ll want a different set, it’ll cost me $3–is there something I’d rather do on a budget of $3?”).

Go back to JD’s sweaters: imagine you’ve spent the time to do the spreadsheet mentioned in this exercise, and you realize you don’t NEED two sweaters. Well, unfortunately, you now own TWO thrift store sweaters, you’re probably not going to get much more at the thrift store selling the expensive one as you would the inexpensive one. If you sell the expensive one, your spreadsheet gets better, but you’re really no better off than if you sold the cheap one.

I can see this as being a good eye-opener on the how much junk you have and roughly what it has cost you, but even then you need to take the numbers with a grain of salt.

Re your first comment, you’re not using cost per day when you calculate whether or not to keep clothes. Cost per day is higher for things you haven’t had as long — that is, if you need more closet space, you’ll throw out your newer things first. But that’s not what you do: you throw out the stuff that you don’t want to wear anymore, stuff for which the closet space is of more utility to you than the clothing. Your clothes aren’t expensive on a per-use basis because their cost is sunk. The only way to reduce their per-use cost is to keep using them. That’s what sunk costs *are*, and that’s why you ignore sunk costs when determining utility.

(The usual sunk-cost example is the other way around: “I don’t like this shirt, but I spent a lot on it so I should wear it.”)

Your second comment is an example of using cost amortized over service life to decide whether to purchase something, which *is* a good idea — it’s just not the idea that the post is talking about. The post advocates using the cost per day *of ownership* to decide whether to *get rid* of something. So if you had a two-year-old laptop that cost $1000 (= $1.36 per day) and a week-old TV that cost $1000 (= $147 per day), how would you use those figures to decide if you should get rid of (not replace, discard) the TV or laptop?

Yes, calculate cost per day through something’s expected service life when deciding to make new purchases; no, don’t calculate cost per day already owned when deciding whether to throw things away.

‘Calculating cost per day of expected life of a potential purchase makes sense, but that’s as far as sense takes you.’

It may be useful to have something to compare that to. Like a new lcd tv will cost me £0.54 (=$0.93) over a year (and will last longer), which can be compared to the cost of my laptop over 3 years at £0.73 (=$1.25). This surprised me as I think of a tv as more frivolous than the laptop. But maybe thats not the case.

If you have (like me) a bunch of books, working out that in actual fact those books cost £2 (=$3.40) per day when I buy them (over a year) may cause me to realise that I don’t get good value out of them and maybe I should get rid of some and just go to the library.

Its another way of quantifying and comparing your posessions and may lead you to interesting conclusions about what you should keep, throw out and buy more or less of. I think its especially useful for clothes, which have a tendency to expand to fill all available space.

There’s three separate issues that make it so this process doesn’t provide meaningful information. The process is really close to processes that *do* provide meaningful information, so it’s easy to confuse one for the other. I think that’s what happened in your sweater example, in fact, which I’ll get to in a moment.

The first issue is that the actual calculations are bogus. Dividing the cost of something by the amount of time you’ve had it doesn’t give you an number that means anything. Looking at the shoe example, for instance:

“$150 / 365 = $0.41095, or $0.41 for every day I wear shoes.”

The problem is that it *doesn’t* cost $0.41 for every day you wear shoes. If all of your shoes were stolen today, *then* you could say that until now it cost you $0.41 per day to *own* shoes, but you still have the shoes and they still have service life remaining, so the cost of shoes per day will end up considerably less than $0.41. You don’t know how long they’ll last, so you can’t calculate their amortized cost (although you can estimate it by estimating how long they’ll last). But then, amortized cost and the per-day-so-far calculation proposed here are different numbers entirely.

The second issue is that the process confuses the cost of an item with its utility. While cost might come into an individual’s utility function for something, there’s a lot more involved, and it’s utility that lets you decide whether something’s worth buying or worth keeping. Cost might not come into the picture at all.

For example, I’m a musician, and among the instruments I own are a double bass and a toy accordion. I used to play the double bass semi-pro but burned out, and I play Irish music on the toy accordion, planning on getting a full-size button box later. The double bass cost hundreds of times what the accordion cost, but right now the accordion has far more utility to me than the bass.

The third issue is that this process is about deciding whether to *keep* things you already own, but it closely resembles the process you’d use to decide whether or not to buy something — but those processes don’t really have anything to do with each other. Your sweater example is an example of the latter — you were deciding whether or not the sweater was worth *buying* (even if you were doing it after you had bought it!). If you were to decide whether or not to get rid of either sweater, the cost per day so far of both wouldn’t necessarily come into it; you’d probably decide to keep both because you’d rather have two sweaters (= two sweaters have greater utility for you than one). With the process suggested here, you’d find that the cost-per-day of the new, expensive sweater is far higher than the cost-per-day of the older thrift sweater — and then what?

Finally, there’s a straightforward argument to absurdity that shows how this process doesn’t work: If you find that something’s cost per day is too high, then the only rational response is to *keep* that something — because the longer you keep it, the less it costs you per day!

Calculating cost per day of expected life of a potential purchase makes sense, but that’s as far as sense takes you. But that’s not what’s being proposed here: it’s a different number being calculated, that number doesn’t mean anything, and even a meaningful amortization figure isn’t sufficient to decide whether or not something is better kept or thrown away.

That $2000 wedding dress may be sunk costs and it may not matter whether you calculate the costs per day or not… But doing so across the duration of your first marriage may influence your choice of dress for wedding #2.

Mindfulness is an excellent tool to reduce spending, and cost-per-day expense chart is a sort of forced mindfulness: by doing the exercise, you’re forced to see just how much things cost you. For example, I ran the numbers on the various computers I’ve purchased over the years, and results were rather startling. Even accounting for “grey areas” such as how much I prefer certain machines, one came out dirt cheap and another came out very, very expensive. I hadn’t thought of this before.

This is actually very powerful when applied to thinks like clothing, in my opinion. I recently treated myself to a very expensive sweater. When I calculate how many times I expect to wear that sweater and compare it to the thrift-store sweater I’m wearing at this moment, there’s a startling difference. Obviously I’m aware that my frugal tendencies mean thrift store clothing is going to be much cheaper, but I hadn’t realized the difference was this pronounced. (The expensive sweater is on the order of 100x more expensive per use than the thrift-store sweater.)

So while I understand that this may seem pointless in some ways, I do think it can be a powerful tool, especially to those who’ve yet to practice some of this in their own lives.

Take the wedding dress as an example. You spend $2000 on a wedding dress which you wear once. If you hold onto it for twenty years, then it cost you $2000 — if you get rid of it a month after the wedding, it cost you $2000. How does calling it $2000-per-day for the wedding or $0.27-per-day for holding onto it for twenty years change anything? It doesn’t change how much you have, how much you spend, or how much you save, so any value other than a single $2000 expense is meaningless.

Even following through the instructions shows that there’s nothing to it: After doing all that math and spreadsheets and amortization, the instructions on how to decide what to keep come down to recurring expenses, gray areas and sentimental value, which is exactly how you’d decide things if you hadn’t gone through this whole process.

The math error is that all of the math involved here is unnecessary.

Here’s a better one.