Where I concluded that our monthly expenses is around $3115.
This is just an estimate. I don't track my expenses extremely closely.
I started thinking a bit differently recently about my monthly expense.
You see, my stand up vacuum cleaner, you know those battery charged ones, well, it's getting a bit old and the battery is quite messed up. Don't buy Electrolux stand up vacuum cleaners. After the first year, the battery charge becomes bad, so each charge doesn't last as long as it used to.
Anyway, it's quite troublesome to use now cos the battery doesn't last long enough to run around the whole house, so I was considering getting a new one. I've been using this vacuum for 2 years already and I bought it for $169 or around that amount. As I was thinking about buying a new one, I thought... hey... how much is the depreciation on this vacuum?
And it comes up to around $7 per month, or $0.23 per day. ($169/24 months)
If we look at it another way, the question becomes, would you like to rent a vacuum cleaner at 23 cents per day everyday?
To me, I think that's a bit expensive. I think I would rent a vacuum cleaner for around 10-15 cents a day. Some people might be ok with 20 cents, to me I'd prefer 10-15 cents per day.
I'll use 12 cents just for calculation. To get a depreciation of 12 cents per day, I'll need to use this vacuum cleaner for around 3 years and 10 months. (3.85 years)
So where am I going with this post?
Well, you see, in my previous expense post, I calculated my depreciation of my car to be $1200 per month. This comes from $650 depreciation and $550 of running costs.
Most people depreciate their cars, cos they can calculate it. Basically, we all know that in SG the cars need to be scrapped. So we can depreciate it very accurately.
So I thought, hey, shouldn't we also depreciate all our other stuff in our house as well? It's harder to do cos we don't know when they will break down. But regardless, most of the stuff will be worthless when we decide to replace it. So technically, it counts as an daily/monthly expense.
Also, it's quite interesting to think about it from a daily perspective.
Like, would you rent whatever item for $xxx daily?
Let's start. I'm just going to divide everything by 2 years, cos I've used them for 2 years already. Nothing has been replaced yet and I hope I don't need to replace anything anytime soon.
Total renovation expense is approximately $18000.
This includes kitchen cabinets, TV, fridge everything...
This works out to be $750 per month or $25 per day. (18000/24 months)
Now, paying $25 per day just for existing in my house sounds really expensive. It's not even including running costs. This is just purely depreciation. Ok, the number will drop cos it's likely that the items will need to be replaced at around year 5.
So the number would be closer to $300/mth or $10 per day (18000/60 months).
I'm using these numbers as a change in perspective. Cos no one really knows when we're going to need to replace the items.
So if I look at it another way, would I rent everything in my house for $25 per day? This means all my conveniences like a washing machine, cupboard space, being able to cook daily, etc... Personally, I think it is quite expensive, but yet I consider most of my stuff are necessities.
Let's break them down further.
I'll be dividing them all by 24 months for the monthly expense, and by another 30 for daily.
Ok so I've 2 sections.
The first section is the current depreciation if things need replacement immediately.
Then the 2nd section I've estimated the expected lifespan of the items and the expected monthly/daily depreciation I would likely be facing.
The vacuum cleaner needs replacement but I'm still going to use it for a bit longer.
And the misc stuff is all the smaller stuff like my kettle and frying pan, etc which can be replaced at any time so I've just set those to 2 years expected lifespan.
My tables and chairs are the cheaper ones so they may need replacement sooner than other stuff. Some of the fabric of the chair is already falling off.
Anyway these are all estimates so... whatever.
The expected daily depreciation which I'm likely to face is $7 per day.
Anyway, today's post isn't about trying to see how low I can bring my daily depreciation down to. But rather to look at things differently.
For example, would I be willing to pay $0.21 to sleep on my bed and mattress daily?
Another way to look at it is, would I rent a bed and mattress for $0.21 per day everyday?
Or would I be willing to spend less? I can always sleep on a futon like in a Japanese ryokan.
How about my daily hot water bath? 7 cents per day. That's pretty cheap for the ability to have hot water on demand for my bath. That's not counting the water cost.
Or $1.04 per day for the aircon. And that's not even the power cost to have a cool night's sleep.
Today's post is just about a different perspective. It's not to say what is more expensive or whatever.
It's rather, since all these items will be worthless when replaced. We usually don't sell them when we replace them, it is the same as, how much would we be willing to rent these items for per day or per month.
Also, since companies depreciate their furniture and fittings, if we want to have a more accurate picture of our expense, it would be more accurate for us to depreciate it monthly as well. Most of the time we would just put the full cost of the purchase at the start of the budget. ie, If I bought a mattress this month, I'll just allocate the spending to this month's budget.
But if we look at it from a depreciation point of view, then my expense this month would be $750 more. Or $220 more, depending on which number we use.
So next time we want to buy something new, or replace something which still can be used, maybe it would be good to think about how much this item has already been used and whether we have made the purchase worth it.
For example, my hair dryer was bought at $10, vs a Dyson hair dryer at $600.
How much more are you willing to pay per day for a more powerful hair dryer to dry your hair faster?
Using 2 years for calculation, we are looking at $0.014 vs $0.822 on a daily basis.
PS: I will be travelling again so my next few posts may have more typos and no backlinks, etc.
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