For years, I have valued my AA miles at 2 cents each, and I hoard or spend them accordingly. It's been a good framework that has worked well for me. For example, if a 25K-mile award ticket for a family member could instead be purchased for less than $500.00, I'll typically buy the ticket rather than spend the miles.

If it's a ticket for myself, the calculation is more complicated, because I look at the *net* cost. For example, consider a business-class trip to Europe (say, 12,000 miles round-trip), for which a coach ticket costs, say, $900. A one-way upgrade is 25K miles plus $300, or $800 including the cost of miles. So, with a round-trip upgrade, the net cost is $900 + $800 + $800, *minus* $480 (the value of the 24,000 miles I *earn* on the trip). So the net cost is $2020. Or, I can use a 90K-mile Business Class award and earn no miles for the trip, for a net cost of $1800, which is less.

Many factors can affect the calculation above, including higher/lower coach ticket cost, higher/lower assumed dollar value for miles, assumed value of business- or first-class seats, and need/desire to earn domestic upgrade miles/credits or status. But having this framework makes it easy for me to decide whether to hoard or spend.

Given that I have accumulated over two million miles "in the bank" over the past 6-7 years using this approach, it may be time for me to lower my assumed dollar value for miles. On the other hand, I keep telling myself that someday the award tickets for a big family trip with the three kids and their spouses and other hangers-on, in business or first class to Australia, is going to cost me upwards of 1.2M miles, so I better keep hoarding!