WifeAdvice.com

Making your wife count

All of us husbands can do a better job by showing appreciation for our wives. But did you know you can appreciate your wife through depreciation? This is a crazy concept, but I think I figured it out. Let me explain what I learned at a recent accounting seminar and how it helps demonstrate how much you might appreciate your wife.

At this conference we discussed the fact that companies have to depreciate some of their assets over what’s termed the useful life. For example, a company might purchase a large machine used to manufacture a product. Several numbers are needed to figure out how much to depreciate this machine on a yearly basis. Here are the needed numbers:

• $100,000 initial cost
• $10,000 installation
• $5,000 salvage value (amount the machine can be sold after its useful life is over)
• Useful life of 10 years

In the above example, the company would depreciate the machine $10,500 each year until the 10^th year. [Equation: (($100k + $10k -$5k) / 10 years)] At that point it could be sold for the estimated amount of $5,000. Another fact about accounting is that companies don’t record the value of their employees on their books even though human capital is probably the most valuable thing a company owns.

In honor of my accounting class and wives everywhere, I decided to provide a way for husbands out there to estimate the value of the typical wife and then how to depreciate her on the balance sheet used for the household. (The instructor strongly suggests that families manage finances similar to the way businesses do.) The numbers you need are provided below:

• $936,000 initial cost – I first tried to calculate the cost of acquiring a wife. These costs included attracting the wife (dating, wedding, ring, etc), training the wife (mistakes made learning to cook, clean, do the laundry, take care of you and your kids, etc.), and maintaining the wife (clothing, phone bills, additional gas spent on wrong turns, gossip magazines, etc.). This proved too difficult, so I figured out how much it would cost to employ a wife. I determined I could hire a wife for $15/hr** and would have her work 10 hours a day, 6 days a week. This would continue for 20 years. At that point her useful life would end, and I would need to work with what’s left or trade in for a new one.
• -$500,000 salvage value – That’s right, this is a negative number. This is somewhat normal in business. For example, a company may want to dispose of a nuclear facility, but there will be millions of dollars of clean up to remove nuclear waste. The result is a loss. If you decide to part with your wife at the end of her useful life, you will not receive any money. In fact, you will likely incur quite an expense.
• Useful life of 20 years – It seems to me that a wife can handle her husband and her kids for 20 years. That should be enough time to get the kids out of the house and on their own.

With this information we discover that the typical wife should depreciated $71,800 each year. That’s quite an amount! I hope this exercise taught you two things: 1) You can determine the value of a person; 2) The wife is a valuable asset and should be recognized in your financial documentation. With this newly accounted for asset, I believe you might be able to secure a larger loan for your next house since your net worth will be higher.

**I determined $15/hr based on the $5/hr I pay my babysitter and the $10/hr I paid a lady to clean my house once. If you disagree with this number, simply change the amount and run the calculation again.