For several years now, I've lived in a sort of financial sweet spot. After paying off my debt, I realized that Kris and I had everything we really wanted or needed, so we never had to buy much for the house (except when something broke). But now that I'm on my own, I'm finding all sorts of little things I need to buy again. And those little things add up.
Last Friday, for instance, I invited the neighbors across the hall to join me for a glass of wine. Great! Except that I apparently no longer own a corkscrew. Oops. Something else to add to my ever-growing list of things to acquire. (Other items on the list: slotted spoon, measuring cups, kitchen tongs, pill box, hangers, picture hooks, toilet brush, and so on.)
Some of these things can be obtained frugally. I'm happy to buy kitchen utensils — including a corkscrew — at local thrift stores. I don't need fancy stuff. But sometimes I end up spending more due to necessity, or because I make a spur-of-the-moment decision.
A Quick Bite to Eat
I'm a creature of habit. Because of this I tend to eat one of two meals for breakfast: chicken sausage or Bob's Red Mill organic high fiber hot cereal with flaxseed. I cook the chicken sausage on the stove, but I've always made the oatmeal in the microwave. I have a little two-minute routine that produces perfect oatmeal and makes me happy.
Well, the new apartment didn't include a microwave. And I was fine with that. Besides my oatmeal routine, I'm generally anti-microwave. I'm perfectly happy preparing food on the stove or in the oven. (It's my inner Luddite, I guess.) I resolved that I was going to live without a microwave, which seemed like a frugal choice.
That resolution lasted one week. During that week, I made oatmeal several times, and each time sucked. First of all, it took more than ten minutes to prepare each batch. (The electric range takes much longer to warm up than the gas range in the house.) Second, the quality of the oatmeal produced on the stovetop was awful: gummy, lumpy, and gross. ¡Que triste!
So, when I found myself in a local department store last weekend, I made an impulse purchase. I bought a microwave.
The Calculus of Convenience
The microwave I chose cost me $80. If I'd been in frugal mode, I would have done more research to find the best model at the best price. I probably would have used Consumer Reports as a tool. But I wasn't in frugal mode. I was in “I have a new apartment and need to buy things” mode. (This is a dangerous thing in and of itself, and a subject for another time.)
On a long walk yesterday, I ran the numbers through my head. Was buying a microwave a poor financial decision? Of course not. Let's make some rough assumptions:
- It takes ten minutes longer to make oatmeal on the stovetop than it does in the microwave.
- I eat oatmeal for breakfast twice a week — or about 100 times each year.
- Both devices use the same amount of power to make oatmeal. (I have no idea if this is true; this is just my way of saying let's leave this factor out of the equation for now.)
One way to look at the cost-effectiveness of the microwave is to look at the “price per use”. In this case, if the $80 microwave makes 100 bowls of oatmeal in a year, that's about 80 cents per bowl. (And the cost per bowl would continue to drop over time.)
Another way to look at this, however — and the way I prefer to look at it — is to see how much time I'm saving, and how that applies to the cost of the microwave. So, if I think I'll save 1000 minutes during the first year of owning the microwave, that's nearly 17 hours that I've recovered. And $80 divided by 17 gives us $4.71 per hour. If my time is worth more than $4.71 per hour — and it is! — then the microwave is a good deal. (Plus, the hourly cost will decrease the more the machine is used in the future.)
If I could quantify the quality of the oatmeal, I'd have a final way to compare costs. But I can't. All I know is I much prefer the perfect microwaved oatmeal to the gummy gunk I had been eating. That's worth a lot right there!
Obviously, I'm not fretting over this purchase. I can afford it, for one. For another, we all know how handy a microwave really is. I'm not about to lapse into “how much is my hot chocolate?” thinking. (I hope.)
There's a balance to be had. Sure, it's silly to spend on unnecessary (or unaffordable) appliances and gadgets. I wouldn't use a KitchenAid upright mixer, so it would be foolish to buy one. Kris, on the other hand, uses hers all the time. It's a valuable tool in her kitchen. And as much as I covet a $650 blender, that's outside my budget. (It might be in your budget, but it's not in mine.)
For me, it's fun — and motivating — to run the numbers on purchases like this from time to time, just to be sure they make sense. Now that oatmeal will taste even better because I know each batch saves me a little more money…or something like that.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.