We're having a Christmas sort of day here in our household. We're finally replacing our old refrigerator, the one we purchased more years ago than I care to think about, with a new model.

Our reasons for replacing the old appliance with the new have almost nothing to do with the cost savings we will realize by upgrading to a more efficient appliance. But I happened to be reading an article recently about the true cost of an appliance and in the interest of all things money I thought I would have a look at the real dollar savings we'll be seeing.

The chart you see here is about as simple as they come. I simply took the purchase price of our new refrigerator and divided it by the life expectancy in months. Is this a reliable life expectancy for a refrigerator? I can't say for sure, but based on our old model's life, this one is as good as it gets.

A simple division of the life expectancy of the new appliance into the purchase cost yields the monthly cost. Had I been doing this analysis for tax purposes (say, if I were purchasing this appliance for my business) I would have calculated this using some other method besides a simple straight line method. For a quick analysis of non-tax related expenditures, the straight line method is fine. So much for acquisition cost. Now what about the energy costs?

For the monthly price to operate this appliance, I checked the Internet for energy ratings on the two units - old and new. Those figures are given in Kilowatt-Hours per Year. My electric company's bill tells me I pay about $0.075 per KwH. Multiplying KwH/Yr by $/KwH and dividing the result by 12 yields Dollars per month in operating costs.

I was pretty surprised at how much less the monthly cost to own a new appliance - in this case a refrigerator - can be. In the grand scheme of things, the savings won't add up to more than the price of a nice meal at a decent restaurant, but we'll enjoy that dinner out all the same. And we'll also feel better about wasting less energy.

Not to mention the decreased noise level, much nicer aesthetics, convenience and usability.