One suggestion people make to spend less money is to do the work yourself. Whether it is cooking, fixing your house or car, or getting housework done, people will tell you stories of the huge amounts of money that can be saved by doing it yourself. But is this effort really worth it? Do you save enough money to make the work worthwhile? To determine this, you need to understand both the benefits and liabilities of doing-it-yourself (DIY).
Benefits of DIY
To determine how much money is really being saved, you need to price out what it would cost to hire someone to do the work and how much it would cost to doing it yourself. Let us say we want to change the oil in our car. How much would it cost to get someone to get someone to do it for us, say at a car repair shop? A quick perusal of ads would indicate that the cost could range from $ 13 to $ 30, so let’s say $ 20. Now, how much would it cost to buy the oil ourselves? Given a car that uses 4 quarts of oil, and getting the oil for $ 2.50 a quart, we can see it would cost $ 10. So, we can see a direct savings of $ 10 in this situation. This calculation is what should be done to determine how much money can be saved anytime we are thinking of doing it ourselves.
Accomplishment and Ownership
However, DIY has more benefits than just money. By doing your own work, you can gain a sense of accomplishment, simply because you know how to do something that other people need to pay to get done. How much is that worth to you? Not only have you accomplished something, you also are a better owner of the work you have done. It’s yours through and through, not someone else’s results that you have bought. There is a justifiable pride in doing your own work, and there is a growing sense that you are an independent person, more in control of your life. Heady stuff, that feeling.
Finally, by doing the work yourself, you have increased your understanding of your world. You get a better sense of what is involved in your life, and this understanding can improve both your activity and your decisions. By increasing your knowledge of your world, you have a firmer grasp of where you fit and what you can provide, which can lead to more opportunities in a self-feeding cycle. So, not only do we save money in the short term, we can take those results and generate income in the long run. Potential income can be a large reward, particularly when multiple activities interact with each other.
Liabilities of DIY
However, recognize that you did spend something when doing-it-yourself: time. You spent the time doing the work rather than doing something else. In the financial world, this is called opportunity cost. What else could you have been doing in the same time? Specifically, could you have been doing something that paid you more than what you would have spent having someone else do the work? For example, if you mow your own lawn, let’s say it took you an hour. Could you have paid someone (a local teenager) to mow your lawn, say for $ 20, and spend that same hour writing an article worth $ 50? Working on a client’s account, for which you could charge $ 60? That means that mowing your lawn did not save you $ 20, it cost you $ 40.
Less than Best Results
Let us go back to the oil changing. If you do it yourself, did you do it right? Did you do all the extra checks that the car repair shop does whenever they change your oil? If you are repairing something in your house, could a professional have done a better job? How likely is it that your repair will not hold, and now you MUST hire someone to not only do the original repair but also fix the mess you caused. This is not a pleasant thought.
A Personal Note
What it comes down to is how much is the repair worth to you? I admit, I am not a good person for doing my own repairs. My repairs tend to break (often spectacularly), and then the repair bill is even higher. But I have many friends and colleagues that swear by DIY, and they tell me not only of the money they save but of the great feelings they get by doing their own work.
Whether you do your own repairs is your decision, but make sure you understand both sides of the issue. With a little bit of forethought, you can arrive at a decision that works very well for you, and, if that decision is to do the work yourself, then go for it. You are in excellent company either way.
John Steely has been a financial planner for over 5 years, with an emphasis on helping individuals and families becoming financially free. He has a free website, http://www.learningmoneybasics.com Visit his site to learn more about making money work and to get free personalized advice. There are also free courses on budgeting and other topics available at his web site.