The true cost of running a freezer

MillionaireAdventure's picture

Freezers are a great invention don’t get me wrong, but they are rather expensive to run. There is the obvious cost of purchasing a freezer along with possibly having somebody come around and fit it.

But that’s only the start of the costs as the electricity to keep my freezer running costs approximately £85 per year (assuming it uses 2 units per day at current rates) and then there is the hidden cost of maintaining your food inventory.

Most of us have kitchens stocked with food whether it be stored in your cupboards, fridge or freezer. I call this ‘food inventory’ as it is effectively the same as inventory that a company would hold to carry out its daily business. Clearly having this food in the house has it’s advantages as you don’t have to pop out to the shops every time you fancy something to eat.

I estimate that there is normally £100 of food inside my freezer waiting for my partner and myself to eat. This means that we always have £100 of our money invested in this food inventory, businesses would call this working capital. Now if we could reduce the amount of food in our freezer we would be able to increase our cashflow.

In non-accounting terms this basically means that for every £1’s worth of food we wouldn’t have stored in the house we can have an extra £1 in the bank. So if we could completely eliminate keeping any frozen food in the house opting instead to purchase it as and when we needed it we would always have an extra £100 in the bank, which could easily earn us an extra £5 per year in interest.

In addition many of us have freezer contents included in our insurance policies so we are paying for that too! Whilst it may not be shown as an additional premium it’s an extra risk that you insurer is including in their calculations of your overall premium.

However sometimes you can take advantage of special offers or bulk buying discounts. So the question is how much of a discount do you need to justify the cost of working capital?

Source: www.millionaireadventure.co.uk where I blog on all things related to money saving and making along as I attempt to become a millionaire!

Your Comments

I have a large chest freezer in my garage, which has an independant electricity meter to it. We use this electricity to run the lights in the garage (used very occasionally) and the freezer - nothing else. We have had our electricity bill in and it has cost us £130 approx for this quater - the preivous bill was the same. We have only just moved into this property in March and I am trying to see if this can possibly be correct - I cant believe the freezer could cost this much - obviously if it does I will be turningi it off! - as that eqates to approx. £520 per year!!! - just for 1 freezer.
Does anyone have any suggestions how I can find out if these bills are correct,
I am concerned someone or something else might be running off our electricity meter?

Also remember that a full freezer will be more efficient and so reducing the amount of food in there may actually not be that good an idea. The best thing to do is buy a really efficient freezer.

It never occurred to me before but when I think about it we do a big shop at Costco every month or so and spend around £160-£170 and we always have spill over from the previous month as well fully stocked cupboards which means we have over £200 pounds of working capital which could be put to good use elsewhere. Thanks for the tip.

I guess that living in a colder area has its advantages, right?

You need to take into account food inflation on the other side; next time you go back to the shop that frozen meat might have gone up, and in each such case you've saved yourself that increase... Food inflation is for many products outstripping your "easy" 5%, so perhaps you should rewrite the article to argue for getting as big a freezer as possible? :p