Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
Ever since I purchased my condominium in the Summer of 2010, one of my ‘grand plans’ was to upgrade the place by installing a stacked washer/dryer combination unit in to one of closets in the living room. I figured that this would be a nice convenience to have while living there during graduate school, as well as boost the value of the property when I looked to sell in a few years down the road.
Having decided to take on this upgrade, I made saving for the eventual project one of my financial goals and figured I would start accumulating the money after I had saved up the 1% home value cash fund for home maintenance costs that is generally recommended to have. I calculated that the upgrade would cost $1000 for the washer/dryer and an additional $1000 for labor/installation (since installing the unit in the closet would involve drilling holes and placing pipes).
However, after I had completed saving for my 1% home value maintenance account, I decided to cancel the financial goal of installing the washer/dryer unit because my girlfriend was going to move in to my place, and we knew we would desperately be needing the storage space that the target closet represented!
While I definitely still feel that reserving the extra closet for miscellaneous storage was the correct decision, the process got me thinking – are the operating expenses actually cheaper if you install your own washer/dryer in your home versus using the the coin-operated laundry that our condo community provides?
Trying to find an answer to this question is the purpose of this post. Let’s get started!
As always, when we start with an analysis, it’s important to list out the assumptions that we’ll use so that everyone is on the same page. These are listed below:
- In my condo complex, the only relevant utility that I have to pay separate from the fixed Homeowner’s Association fee is electricity. So, that’s the only operating cost that will be considered in this analysis for figuring the cost of having my own washer/dryer.
- Cost of my time to walk down the row of condos to the community washer/dryers is negligible, so not included.
- I get quarters to operate the coin-laundry from my bank on the way to work, so there is no added cost to obtain those.
- Maintenance costs are negligible for keeping up the washer/dryer installed in my condo (which might actually be considerable in real life) .
- Assume that I will be doing 2 loads of laundry each week and that the washer/dryer installed in my condo has the same capacity as the community laundry.
- Inflation is not taken in to consideration for cost increases for doing coin laundry (which might actually be considerable in real life).
Cost to Operate Coin-Laundry
Washing and drying clothes at my condo’s community laundry facility costs $1.50 each. Of course, this equates to $3.00 total for each load of clothes washed.
Applying the washing frequency of 2 loads per week, this equates to $6.00 per week, or $24.00 per month.
Cost to Operate Washer/Dryer Installed in My Condo
As I mentioned previously, the total purchase and installation cost I estimated for the stacked washer/dryer combination was $2000.
Aside from this initial cash outlay, the only other operating cost we need to tabulate is the electricity cost per month. When I started searching for an estimate for this value, I soon discovered that there was a great deal of variability in how much people/companies think that washer/dryers cost to operate each year. Below are some of the various figures I found:
- According to a washer/dryer calculator I found, the total cost to wash and dry my laundry in cold water would be $68 per year.
- According to EnergyStar, their energy-efficient washer/dryers cost $60 per year in electricity.
- According to NPR, a washer/dryer cost a total of $10 to operate each month in electricity, or $120 per year.
- According to the yellow energy tags listed on several washer/dryer combos on Lowe’s website (1, 2, 3, 4), the electricity cost ranges from $19-$32 per year.
As you can see from my findings above, the electricity cost to operate washer/dryers can vary from $19 to over $100 per year (it’s interesting that the yellow tags attached to the washers and dryers when they are out on the showroom floor are most likely underestimated, haha).
Breakeven Analysis & Conclusions – Coin-Operated Washer and Dryer vs. Installed in Home
Using the specifics mentioned above, I calculated that it would take 143 months, or almost 12 years of doing coin-operated laundry in order to spend as much as it would to purchase and subsequently operate a washer/dryer that is installed in my condo. If you’re interested in viewing the spreadsheet that I used to calculate this breakeven time period, click on the Google Docs link below:
To me, this is quite an amazing realization! I guess I always figured that it would take several years of doing coin laundry to breakeven on the cost of a washer/dryer, but I definitely didn’t think that it would be >10 years for my specific situation! I figured that it would be more like 3-5 years max!
I think that the aspects of my personal situation that tilted the numbers to heavily favor coin laundry being the cheaper option in (at least) the short-term are as follows:
- 1) Only doing 2 loads per week maximum (whereas a family of 4 might be doing 7-8 loads per week or so), and
- 2) The fact that my condo unit is not currently drilled to handle a washer/dryer, and I would need to spend another $1000 for the labor and materials to make that happen.
In fact, if I had been doing 8 loads of laundry per week and my house was already hard-wired with outlets for a washer/dryer (i.e. the initial cash outlay was only $1000 to purchase the machine), it would have only taken about 12 months for me to breakeven with the cost of installing a washer/dryer. This really highlights to importance of doing your own analysis for your specific situation to determine whether or not installing a washer/dryer or just doing coin-laundry is better for you financially.
In addition, it is also worthwhile to note that installing a washer/dryer in your home can sometimes substantially increase the resale value of your home. I can’t remember how many people (girls, in particular), who have told me that they would not EVEN THINK about buying a house or condo unless it had it’s own washer/dryer in it already. By installing this set of appliances in your home, I could see the resale value easily being increased by anywhere up to $5,000, just stemming from the fact that it would be on more people’s ‘list of qualifying homes’ since it has the requisite washer/dryer that they are looking for.
From this analysis, I feel that several important conclusions can be drawn about whether coin laundry or installing your own washer/dryer is cheaper:
- Doing coin-operated laundry will be cheaper and probably a better idea for you if….
- You only do 1-2 loads of laundry a week (or less).
- Installing a washer/dryer in your home would require a substantial capital investment up-front.
- The Time Value of Money (TVM) is of great importance for you, and you don’t want to tie up big chunks of your money for several years that could have been invested elsewhere.
- Installing a washer/dryer in your own home is a good idea for you if….
- You and your family do A LOT of laundry each week (4 loads or more).
- You especially value your time and need the convenience of doing laundry in your own home while you do other things.
- Your home is already equipped with hook-ups for a washer and dryer, and all you have to do is go down to your local home-improvement store to pick one out.
A Spreadsheet Template to Conduct Your Own Washer/Dryer Breakeven Analysis
When I started this analysis, I did not intend to create a general spreadsheet that could be used as a template for conducting someone’s own breakeven.
However, when I saw how sensitive the decision of whether or not it is cheaper to do coin laundry or install your own washer/dryer is to each person’s laundry-going frequency and home set-up, I felt it would add a lot of value to create a tool that could be adjusted by each person to conduct their own analysis.
As such, I added 4 fields highlighted in orange to the Google Docs spreadsheet shown at the link below:
The 4 fields include:
- Cost to Purchase and Install a Washer/Dyer in Your Home
- Utility Cost Per Month to Operate a Washer/Dryer Installed in Your Home
- Loads Per Week of Laundry You Will be Doing
- Cost Per Load to Wash + Dry Your Clothes (Total for both washing and drying)
To conduct your own breakeven analysis and help determine which option is cheaper for you in the long-term, simply download a copy of the Google Docs Spreadsheet, input your specific answers to each of these items in the orange cells, and then look in Columns B and C to see how many months it takes for the columns to display similar values (your breakeven point).
The answer may surprise you, like it did me! Give it a shot and let me know how it goes!
How about you all? Do you currently do your laundry using coin machines, or do you have a washer/dryer installed in your home? Have you ever calculated which is cheaper for your specific clothes washing habits?
Is cost even a factor in deciding which route you take with washing your clothes, or is convenience the main deciding point?
Share your experiences by commenting below!
PS – Isn’t the English language fascinating? Drier and dryer sound exactly the same, but one is used as a noun, and one is used as an adjective. Apparently, I may have used the word, dryer, too much today! haha
***Photo courtesy of http://www.flickr.com/photos/xand83/5510923960/sizes/o/in/photostream/