Tightening the Belt in 2010

Here are a few examples of how calculating a cost per use can help. Be warned, though, that cost per use doesn't work for everything. For example, you use life insurance only once, making its cost incalculable.

Daily-use items: Items you use daily do well in a cost-per-use analysis. Mattresses, coffee makers and computer monitors are examples. If you buy a bigger, better computer monitor that costs $100 more and use it daily for four years, your additional cost per day is 7 cents. On the other hand, infrequently used items get expensive. A $1,000 snowblower you use three times a year for 10 years costs about $33 per use.

Big-ticket items: Consider homes. Many four-person families buy a four-bedroom house, using one bedroom as a guest room. Assume a four-bedroom house costs $75,000 more than a comparable three-bedroom house. And assume the guest room is occupied for 20 days a year. If you own the house for a decade, you essentially paid $375 a night for guests to stay with you. You could have put up your guests in a posh hotel for that. That ignores some factors — four-bedroom homes might appreciate more, and maybe the extra bedroom is worth it for non-monetary reasons. But the point is to know the cost.

The same is true for buying a seven-seat SUV when a four-seat sedan will do most of the time.