When I think about bills, I annualize them. $30 a month? That's $360 a year. $5/mo? $60 a year.
I use this to help me grasp the long term cost of all my decisions, but nobody else I know does this.
For instance, my brother and I are moving soon into 2 separate apartments (we currently share a 2 bedroom) and the new complex doesn't have Google Fiber Internet. I complained to my brother that on top of everything else I'll have to pay $5/mo extra for Google extended storage I was getting for free.
He said it's only $5/mo, just get and don't worry about it. I was like, that's $60 a year which is basically a Costco membership. He said "oh hmm, good point yeah"
So I'll work on reducing my storage usage on Google to be able to stay on the free tier, but am I alone in thinking this way about everything I buy?
13 Comments
yenahmik@lemmy.world · 12 pts · 2y
The next level of this is to calculate the amount you would need to have saved to support the cost in retirement. E.g. if you have a $60 annual cost, you need to save $1500 just to cover it for the rest of your life (following the 25x rule for retirement savings).
electriccars@startrek.website · 2 pts · 2y
The time value of money crosses my mind similarly. The value of this $5 today if invested instead would be worth XX in X years. Lol
Rusky_900@reddthat.com · 1 pts · 2y
That's a great way to look at it.
PeepinGoodArgs@reddthat.com · 7 pts · 2y
IonAddis@lemmy.world · 5 pts · 2y
monkeytennis@lemmy.world · 4 pts · 2y
It's also cool to do this with savings pots. When people have a hard time saving, they'll say things like "what's the point in saving £10 a month towards X, that's nothing". I usually point out the annual figure, since a lot of people don't think that way.
That said, personally I do this too much, and it can make it hard to spend and too enticing to save. But that's a different topic..
mayo@lemmy.today · 4 pts · 2y
I'd guess this is normal for people who budget. Same as @vynlwombat I consider how many years I'll use it. I also amortize capital expenses which is useful for figuring out how affordable something is to me.
In the past I've put together a budget with all annualized services and amortized capital expenses to figure out what is the most spendy/find outliers.
Showroom7561@lemmy.ca · 3 pts · 2y
Since I use budgeting software, the monthly to yearly totals are always there in my face, so I don't have to "think" about applying this to bills.
But I like to use that way of thinking to illustrate how "small" purchases add up.
Some people, for example, get a coffee every day. "But it's only $2". OK, but would you want to pay $730 a year for bad coffee?
Apply that to smoking, drinking, eating out, etc., and you can see how these optional expenses can destroy your wallet over time.
Gigan@lemmy.world · 3 pts · 2y
Yes, I do this with savings too. If I reduced a monthly bill by $20 that's an extra $240 dollars I have per year.
AlecSadler@lemmy.ml · 3 pts · 2y
I'm...sort of inverse? I daily-ize them.
That way on a day to day basis I know if I'm trending up...or down...or what have you. If my "daily" cost to exist passes some threshold, it's cause for alarm.
EthicalDogMeat@lemmy.world · 3 pts · 2y
I calculate the yearly cost. Or at times, I'll calculate how many hours I need to work to "earn" it
vynlwombat@lemmy.world · 2 pts · 2y
I do this too but I also consider how many years I'll use something or subscribe to it.
GenericBob@lemmy.world · 2 pts · 2y
I also do this, I'm not entirely sure how much storage you were getting for free but if you look into Google 1 I am getting 200 gigs for $30 a year. But I have a Google "family" and it provides a separate 200 gb to each member
Orionza@lemmy.world · 1 pts · 2y
I do it all the time. I don't know when I started doing it. But it became really obvious after I stopped getting cable. Cut the cable = $100 a month saved = $1200 a year! = $3600 after 3 years Omigosh I've saved at least $10k now since I cut cable.
electriccars@startrek.website · 1 pts · 2y
Cable sucks! Great job!
Mister@lemmy.ca · 1 pts · 2y