Wednesday, April 29, 2015

Homemaking Tip - CPW

In her book, Tightwad Gazette III, Amy Dacyczyn states, “It is important to examine the ‘cost per wow’ or CPW when making purchase decisions. The point should always be to get the most wow for the smallest expenditure of money.”

For example, by evaluating the satisfaction on a 1-10 wow scale between a $50 fancy restaurant meal and a $5 homemade meal the best deal can be calculated. Let's say the $5 homemade meal rates 5 wows and the restaurant meal rates 10 wows. The restaurant meal has double the wow power, but the cost per wow is where the real value is measured. The homemade meal has a $1 CPW while the restaurant meal has a $5 CPW. While it is true that the restaurant meal would be enjoyed more than twice as much, it is still worth only one-fifth of the value. In addition, if the $5 homemade meal is chosen there is still additional money available for other activities which add their own CPW to the same $50.

I often think of Mrs. Dacyczyn's CPW concept for it has a nearly universal application.  Like today.  I was out picking a bouquet of lilacs for the kitchen table.  Lilacs rate a full-blown 10 on my WOW scale.  They are vibrant and beautiful, and for two weeks our house smells like heaven inside and out.  But, they are also a lot of work.  It takes me two good days to rake all the blown leaves, tumble weeds, and willow branches out from under them to keep them looking nice.  While smelling and seeing lilacs is a 10, raking under the lilac bushes is also a 10 on the I-hate-this-job scale. Using the CPW formula:  14 days of wonderful versus 2 days of I-hate-this-job equates to a 7 to 1 ratio.  Lilacs have a great cost per wow and therefore worth the effort to me.

Calculating the CPW is valuable in living simply and frugally. Mrs. Dacyczyn says that when confronted with two choices most buyers simply choose on the basis of “Which do I like best?” and “Can I afford it?” She notes that these two questions alone don’t calculate whether there is adequate value for the money spent, but using the CPW scale allows the buyer to make more precise decisions which saves income and assets.

An added benefit of calculating CPW is deprivation prevention. A negative side-effect of living frugally can be a “We’re deprived” feeling: "We don’t have this," "We don’t have that;" "We can’t do this," "We can’t do that."  Advertisements are designed to make us feel the need to have a product whether it's something we need or not.  Calculating the Cost Per Wow empowers our decisions. We can truthfully look at the brightly advertised widgets and gadgets and say, “There just isn’t enough wow in that to tempt me.”

Cost Per Wow.  It's a really good thing.

1 comment:

Marie said...

Okay, loved that. Funnily though, when I read it through, I read, "cost per COW" the first time, which really confused me. ha!

My tulips are in full bloom right now, and today I discovered that a half a dozen of them in a mason jar, (because I had been too lazy to put the jar away in the garage) is quite charming. Lilacs are still a couple of weeks away, but I agree, they are wonderful!!!