Justify Tech Splurges with a Cost-Per-Use Method

Justify Tech Splurges with a Cost-Per-Use Method

Taryn Williford
Oct 27, 2010

Many personal finance gurus agree that it's OK to splurge on fun tech goodies—even up to as much as 30 percent of your paycheck. But before you go crazy on monthly shopping sprees, you might want to apply another personal finance theory to your spending: calculating cost-per-use.

On some level, you're probably already thinking with the cost-per-use method.

Throwing down $1000 is serious cash for most of us. But the splurge seems worth it when you're considering spending that $1K on a new 52" LCD TV. It's because you know you'll get your money's worth: If you watched that TV for 3 hours each day for 7 years, that brings your cost per use down to only 13¢ per 1-hour show.

On the other hand, a video game that costs $50 and is only played five times has a cost-per-use of around $10 an hour for us.

So the next time you're considering a big tech splurge, use your lifestyle to calculate the cost-per-use. The more financially sound buy might not be the more inexpensive one.

(Images: Flickr user massdistraction under license from Creative Commons, Flickr user rashdan under license from Creative Commons)

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