Best Free Depreciation Calculator for Excel to Download 2024

So first things first...what really is depreciation? According to The Street...

"When something depreciates, it reduces in value."

It really is as simple as that. You buy something, you have it for a while, and you're forced to sell it for less than you paid for it because it has depreciated in value. So what are some of the top things that you buy that depreciate in value? And, how much is this impacting your overall net worth?

Continue reading below and be sure to fill out the depreciation calculator(click the link to download the Excel file, open up the download, and fill out the Excel sheet!) to see how much you're losing to depreciation!

This is the one everyone thinks of when the word "depreciation" is uttered - and it's because it's one of the biggest purchases that you'll ever make that goes down in value. According to Trusted Choice (source), if you buy a new car...

• It will depreciate by 11% immediately once you drive it off the lot

• You'll lose 20-25% by the end of year 1

• It's value will dive by 46% by the end of year 3

• And, after 5 years, your new car will have depreciated by 63%

Ouch! Buy a car for $30,000 and it will only be worth $11,000 after just 5 years. That's a loss of $19,000 due to depreciation!

Ahh electronics. We all love them for the entertainment they offer us...but we should loath them for how much they cost us over time. You may not realize it, but computers and electronics attack your wallet from two different angles:

1. First, the industry finds better and better ways to put these machines together each year, which translates into a cheaper product

2. Just like anything else, a used computer or TV will be worth far less than a new one

Because of the double-hit to your electronics' value, instead of seeing depreciation of 15%-20% like on your car, you'll experience a depreciation rate of 50% every year. Buy a computer for $1,000... one year later you can probably sell it for $500, the year after that $250...etc. etc.

Have you recently purchased a timeshare? I'm sorry to tell you, but your timeshare is depreciating as well... It's not because the building you own a portion of is going down in value, it's because the resale market is flooded with them and there aren't nearly as many buyers as there are sellers.

Plus, maintenance costs on timeshares notoriously skyrocket with each passing year, making them less and less desirable for a second-hand buyer.

All these guy toys have motors in them...which means they pretty much depreciate like cars. Here's the recap on that:

• 11% depreciation minutes after the purchase

• Lose 20-25% by the end of year 1

• The value dives by 46% after just 3 years

• After 5 years, depreciation goes down 63%

As a general rule of thumb, these toys will go down in value by 20% in the first year and then 15% every year after that until the 10 year mark.

My wife thinks video games are a waste of time. For the most part, she's right. But on top of that, they're a waste of money too. The popular site, "Which", discovered this quite a few years ago when they conducted an experiment of their own. They bought a brand new Xbox game for $60, opened it, and then tried to sell it soon after as a pre-owned game.

Guess how much money they recouped? $22. They basically lost $38 overnight just by tearing off some cellophane. On average, video games will lose 70% of their value immediately after purchase. Then, they'll depreciate about 10% each year after that.

A diamond ring might be a great investment...but as an investment in your future spouse and certainly not the ring itself. Most people don't realize it, but the mark-up on jewelry is tremendous - often 100%-200%.

This of course means that if you ever try to sell your engagement ring, necklace, or diamond earrings, you'll likely only get a small fraction of your initial purchase price back. Believe it or not, but the initial depreciation rate is much like a video game -- at 70%.

Buy a ring for $1,000 today, walk out of the store, then try to sell it back to them...they might give you $300 for it. Each year after that, assume it's worth 5% less than the year before.

Dang, it just seems like everything drops in value like a rock doesn't it?? That's why you've got to be careful what you buy and how much of it you get on a monthly basis. Books, DVD's, and CD's - they are no exception to this depreciation game.

While I couldn't find any exact depreciation percentages online, I've read quite a few comments like, "I've spent thousands of dollars...and my collection is probably only worth a couple hundred at this point." Let's face it, nobody wants a bunch of books, DVD's or CD's crowding up their houses anymore.

They can instead buy whatever they want online, get it instantly, and avoid the mess. For that reason, your media purchases are worth 75% of what you paid for them immediately after you walk out of the store. And, every year after that, they drop another 50% a year.

I really hope you like your clothes, and that you end up wearing them for a long time, because they're basically worthless the moment you leave the store with them.

I mean think about it:

• You have a specific design style, others may not

• You wear a specific size, many others wear a different size

• What's in style today is completely out of style two years from now. Even if it fits, no one is going to want to wear your stuff.

So after filling out the spreadsheet, how much are you losing to depreciation this year? $1,000? $5,000? $10,000??? Did your loss make you throw up in your mouth a little?Mine did, and it's probably small in comparison to most!

What is your depreciation amount in comparison to your income? As a rule of thumb, I'd like to see your depreciation total less than 5% of your yearly earnings.

So if you earn $100,000 a year, you should target losing less than $5,000 to depreciation.

• If you're losing less than 5% a year, then I wouldn't sweat your number at all. Maybe your loss is $50,000 but you earn $1,000,000 a year...then you're still fine!

• If, however, you're losing more than 5%, then it'll be pretty tough for you to get ahead financially.