Cost Per Wear: The Cheap Coat Trap
Two winter coats hang side by side in a store, and the first one costs 40 dollars while the second costs 90 dollars. At first glance, the cheaper coat is obviously the better deal, but thoughtful spenders sometimes use a different measure called cost per wear.
Suppose the 40 dollar coat has thin seams and a zipper that sticks. It lasts one winter, and its owner wears it about 20 times. The 90 dollar coat has strong stitching and thick lining. It lasts three winters, and its owner wears it about 90 times. To find the cost per wear, divide the price by the number of wears. For the cheaper coat, 40 divided by 20 is 2 dollars per wear. For the costly coat, 90 divided by 90 is just 1 dollar per wear.
The costly coat is actually the better bargain, even though it takes more money on the first day, and the cheaper coat also has to be replaced sooner, which means paying all over again.
This idea has limits, though. A very costly coat that stays in the closet has a high cost per wear, because the number of wears stays small. And someone with only 40 dollars cannot spend 90, no matter what the math says. Cost per wear works best as one helpful question to ask, alongside the budget you really have.