A number of my friends have been posting summaries of the different services they subscribe to, which I find a fascinating practice I’ve been doing and analyzing in private for years, now.
In the hopes that it well help people make better financial decisions, I’ll walk you through the process of how I decide to allocate my money.
week dates, my beloved
I’ve written before on ISO week dates, a system for tracking the date via weekly rhythms without involving months. Since writing that, I’ve transitioned almost all of my personal systems to week dates, and been far better for it. My life is built around weekly rhythms, and using week dates helps me better visualize how numbers fit into that routine.
In this post, I have done the math to convert my subscriptions into cost in USD per week, for these reasons:
- A standard unit of measurement means we don’t have to get confused by comparing monthly and annual costs
- Thinking in terms of months or years is too abstract for our minds to really compare costs to how much we use the services in question.
- Because this is the way I do it in my personal calculus, and after all that’s what this article is about.
a brief aside: costs covered by donations
As I’ve written, I have started accepting donations for a few of my projects, and people have been so overwhelmingly generous that I’ve broken even on most of my hobby projects. Before I get into the meat of this post, I’ll break down the recurring costs I pay from donated funds:
- Server Hosting - $4.90/week
- Remote Backups - $0.46/week
- Domain names - $0.99/week (this only includes domains from these projects; I’ll list personal ones later)
In total, $6.35 per week. I currently receive $20.21 per week in donations from my incredibly-generous patrons, so there is definitely a surplus I’ve been deciding how to spend on a case-by-case basis.
Costs listed from this point on will all be from my personal discretionary funds.
personal subscriptions
Without further ado, let’s enumerate costs.
essentials
I will not be canceling any of these, as they’re central to everything I do.
- Email - $0.24/week
- FOSS donations - $1.14/week
- Domain names - $1.66/week
All together, that’s $3.04/week, which isn’t bad at all considering the previously-mentioned surplus from donations to my projects.
entertainment
I only have one entertainment subscription, in the literal sense:
- Clarkesworld Magazine - $0.92/week
I used to also subscribe to Forever Magazine, but have paused my subscription until I catch up on my backlog.
As I begin to allocate more time to pursuing my writing career, I expect I will subscribe to more magazines and develop a better process/routine for keeping up with them, but that is a topic for another time.
Unlike many people, I don’t pay for any streaming services, either film or music.
While I’ve technically listed all my subscriptions at this point, I have a number of de facto subscriptions in the form of budgeting.
budgets vs subscriptions
Instead of traditional subscriptions, I tend to favor buying entertainment outright in budgeted recurring amounts.
For example, I maintain my own digital music library, so I put the cost I might have paid toward a Spotify subscription towards buying music.
Similarly, instead of a subscription service for video games, I buy DRM-free games, usually on sale.
As opposed to, say, a subscription to a magazine, the clearest benefit here is that I get to choose exactly what I get with my money.
For example, let’s take my friend Joel’s article on this topic. In it, he describes his decision to buy Humble Choice, a subscription which regularly gives curated games, chosen for you.
As I pointed out to him, knowing his gaming habits, he owns far more games than he actually has time to play. If instead of a subscription like this, he saved the money for specific games he knows he will like, then waits to buy more games until he’s made satisfying progress on what he has, he will both enjoy his time gaming more and spend less money on games, without needing to cut back on his time spent gaming.
In short, a budget instead of a subscription gets him more value with less money, even though technically speaking he’s receiving less content per unit of money he spends.
When budgeting for entertainment, my general rule of thumb is to spend $0.50-$1.00 per hour I spend on a category of entertainment. By spending $0.92 on Clarkesworld, for example, I should expect to spend 1-2 hours per week reading it to get my money’s worth. When I buy a video game for $5, I expect to play it for at least ten hours.
Music is a little harder to gauge, since I listen to so much music and have listened to everything in my collection many times. Instead, I try to gauge how much novelty I want in my music listening experience: I tend to desire at least 1-2 new albums to listen through and savor each month, so I budget accordingly, with the occasional spree of buying used CDs on clearance to add some bulk to the collection.
The rule of thumb in all of this is to compare the money spent per unit of time. For subscriptions, this can be measured in money per week. For budgets, looking at how much time you spend versus the money you spend is valuable.
I would list what my budgets for entertainment currently are, but I’m actually in the middle of updating them and don’t know yet how things will stabilize. I currently expect to spend less on games and stationery while spending more on music and literary magazines.
a useful formula
This is by no means a complete formula, but this is a work-in-progress bit of quick math I’ve been using to measure the time value of purchases, specifically of video games (though it can be applied to other areas).
First, you’ll need to work out these variables for the purchase in question:
- Rating - If evaluating something you already own, use your personal rating. Otherwise, use the average rating of reviews for the item.
1is the best rating,0is the worst. You can easily swap in a fraction like5/5or3/5to emulate a rating out of five stars. - Time spent - Again, if you own it, use the time you spent. Otherwise, resources like How Long to Beat can provide a good estimate.
- Cost - This is typically the total cost for buying something outright. If you’re evaluating a subscription, use the weekly cost and fill in “time spent” in terms of average time per week.
With that figured out, plug it into a calculator:
cost / (time * rating)
In this formula, a lower result is better. To summarize, the result represents “cost per amount of time” (so lower cost is better), weighted by how much you enjoyed the result. For example, take a $7.50 game that took 7.6 hours to beat.
- If it was an amazing game,
5/5, the score is 0.98. You spent about a dollar per hour; the rating in this case doesn’t affect the equation. - If the game was mediocre,
3/5, the score is1.64, significantly worse. Because the game was not as enjoyable, in a sense it costed you more. If I do the math, you would’ve had to get a good deal on the game and have paid only $4.47, for the value to have worked out the same way. - If it was a terrible game,
1/5, the score is a terrible4.93. Only if the game was on sale for a low $1.49 would it have been worth it. (The math breaks down a bit here; personally, I’d have given up on the game long before finishing if it were this terrible, and I would ideally not have bought it in the first place.)
I aim for entertainment I buy to fall into the 0.50 to 1.00 range. Of course, if it’s lower, even better—that means you’re getting more value for less money—but in general 0.50 to 1.00 means the creators were fairly paid, without ripping me off in the process.
So far, I’ve used this formula to compare games I’ve considered buying by plugging in the average play time and rating people end up with and comparing to the cost of the game. With this, I can generally estimate how valuable games will be and make wise decisions on how to distribute my limited money for the best return.
conclusion
This has been a very technical and number-driven post, which isn’t my norm. If you enjoyed this or found it useful, I’d love to hear from you! Similarly, I’m very open to suggestions on how to improve my methodology or calculations.
