Which purchases should you depreciate and which ones should you expense in the context of personal bookkeeping (and not for tax purposes)?
My personal goal for bookkeeping is mainly keeping track of my (1) net worth, (2) income/expenses and for (3) budgeting. Guides I could find seem to base recommendations around tracking your net worth.
To elaborate on my difficulties with this advice based on a few examples:
- A car should clearly be depreciated as it is important to your net worth and you want to have a good overview of its monthly/yearly costs.
- Clothing doesn't really contribute to your net worth and is usually bought yearly, so expensing purchases doesn't cloud your overview of expenses.
- But e.g. furniture, laptops and bicycles are expensive enough to distort your overview of expenses (you don't buy some every year), so you want to depreciate them linearly over the time they are used for the purpose of (2) and (3), but depreciate so quickly that you would want to expense them immediately for the purposes of (1).
So should you simply depreciate even these (unsellable) assets and ignore these when estimating your net worth, or is there some other approach if you still want to accurately track your expenses?