There is a cost that most people don’t take into account. Most people look at how much items cost, how long it will take to pay them off (or save up), and possibly how long they are going to use them for. Apart from more expensive purchases such as a house or a car, once they purchase an item that’s it for costs. If they manage to sell it afterwards, that’s a bonus.

The cost I’m talking about can make a big impact on your purchasing decisions and even more on your pocket over the long term. It’s the cost of depreciation. And no, I’m not talking about depreciation on big expensive purchases, but on everyday items.

You see, everything depreciates with time. Your clothes, your furniture, tools, etc. Wear and tear is part of life and just the nature of things, so after a while you need to buy it all again. But there are ways to buy smarter and save money.

Consider the disposal value

This one will not necessarily minimize depreciation, but it will make you aware of its costs over time. You can do this by considering the resale value of an item after you’ve used it for as long as you need. You can do this for a number of items you purchase. Even if you don’t actually sell them in the end, it will still give you a good idea of depreciation and you can consider if it’s worth it.

So let’s say you want to purchase a new winter jacket that costs $200. It will last you a good 10 years, but after 5 you can probably sell it for $50. In this case, this jacket cost you $40 per year. If the resale value is $100 dollars, it will have cost you only $20 per year.

Purchase second hand

Another way to minimize depreciation costs is to buy second hand items in the first place. You see, most of the depreciation happens in the first few years of owning an item. If you buy something semi-new, it will likely have had most of its depreciation already.

This is especially true for cars, but it works for most items as well. Of course you don’t have to buy everything second hand, but you can often find great items for great items if you put in some effort. It is also much more sustainable.

Buy excellent quality

Excellent quality items usually don’t depreciate as much as the regular stuff you buy at the mall. This is because they are generally more valued and last much longer.

It’s often worth paying a premium for those items that not only will last much more but you can also resell a higher percentage of what you paid for them. This is especially true for kitchen items and tools, but also works for excellent quality clothing.

Look after your items

Because depreciation is higher in the first years of ownership, the best way to minimise the average depreciation cost over time is to make your items last longer. The longer you keep something, the cheaper an item costs per year.

Look at our previous example, that jacket that we bought for $200 and sold after 5 years for $50. If we had kept this jacket for 10 years instead and thrown it away, then it would have cost us $20 per year.

Look after your items, handle them with care and store them properly. Buy quality items in classic styles that you can use for a long time. This is not only great for your pocket, but more sustainable as well.

Do you consider depreciation when you buy everyday items? How do you minimize those costs? Let me know in the comments.