How to calculate the cost of fun

Compare “fun units” when you spend money

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From the February/March 2016 issue of the magazine.

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Disposable income—we love spending it, but have you ever thought to calculate how much fun you’re actually getting in return? New York Times personal finance columnist Carl Richards has come up with a simple—albeit completely subjective—formula in which you add up your total spending on something and divide it by a self-prescribed “fun unit” based on a scale from one to 10. It works best when you compare similar activities.

So let’s say you take the family to a sporting event: Between the cost of tickets and overpriced concessions (about $350 total), not to mention the hassle of parking and the drunk guy two rows back cursing a blue streak in front of your kids, you score this experience a lowly 4. What you have, then, is $350 divided by 4 units of fun, which means you paid $87.50 per unit of fun. Now, let’s say you instead decide to watch the game in sumptuous 4K within the relaxing confines of your home, and order in pizzas for $60. This turns out to be way more enjoyable, meriting a score of 8, meaning your cost per unit of fun ($60/8) is a mere $7.50. The cost difference: a whopping $80 per unit of fun.

One comment on “How to calculate the cost of fun

  1. But you’ve neglect the calculate the value of the live experience vs. the passive TV viewing. Not the mention the negative health impact associated with sitting and TV viewing.

    To be happy, they all say, spend it on experience. The experience of the drunk guy 2 rows back might give your family laughs for years to come. Versus, “I watched a lot of TV when I was a kid.”

    You just can’t calculate the cost benefit when it is impossible to quantify the value.


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