Wednesday, August 24, 2005

Rule #9: D.I.Y. vs P.A.Y.

Okay, this may be the wishy-washiest rule ever. But I guess I think of my rules more as philosophical cattle-prods than actual strict instructions.

  • Don't pay someone else to do what you can easily do yourself
The thing that comes to mind first when I think of this rule is salad dressing. Who needs $5 more, Paul Newman or me? Why would I buy someone else's bottled salad dressing when I can make my own delicious concoction in about 30 seconds with simple, inexpensive ingredients? (Recipe: one clove crushed garlic, big pinch salt, a few grinds of pepper, dash of balsamic vinegar, about 2 tbsp red wine vinegar, about 6 tbsp olive oil. Shake in a jar and then pour on.)
Here's a few other things where this part of the rule applies:
Do my own nails vs. going to a salon
Walk or take the subway instead of taking a taxi
Clean my own home instead of hiring someone else
Paint my own walls instead of hiring a professional
Buy unfinished furniture and stain & varnish it myself
All of these are things I don't mind doing and can do well.

But that brings up the flip side to this issue:
  • Pay others to do anything that you might really f**k up!
When I lived with my ex-, we had a toilet that was constantly running, wasting lots of water. We read our various books and decided it was easily fixable. Well, 3 hardware store visits later, at 9pm on a Sunday night, I was in tears in front of a dismantled toilet and wishing we'd just called a plumber. We did eventually manage to fix the toilet before either of us had to pee in a bucket, but with the extra money we'd spent on non-returnable parts that didn't fit, I think it would have been worth it to call a professional.
Obviously, different people have different skills. If you are good at household renovations, of course you'll save lots of money doing them yourself. But if you're not so good, you may end up incurring extra costs, not to mention the potential for personal injury!
This relates to a recent post at The Happy Capitalist about garage doors and financial planning as do-it-yourself endeavors. He makes the great point that money management is an area where many people don't seek out professional help but probably should. I am an example of this, I think. I (hopefully) have enough basic financial knowledge not to do anything rampagingly stupid with my money, but I could probably get higher returns from my investments. Years ago I told myself I should see a financial planner, but the one whose name was given to me apparently worked on commissions rather than a fee, and the friend who used her felt like she'd been steered towards particular funds for biased reasons. I do pay an accountant to do my taxes--I started doing it when I owned a co-op and my deductions were more complicated. Now that I am renting, I could manage to do them myself, but I trust my accountant to do them better. I'm sure she's found me enough extra deductions over the years to more than repay her fees.

One other factor comes into this rule: time.
  • If you can really make better use of the time, pay someone to do things that take up time
For me, it's laundry. I don't have laundry facilities in my building. I have a busy life. Do I want to be running back and forth to the laundromat down the block and waiting around all weekend when I could be doing other things that actually enrich my life? No. So I put all my stuff in a bag, drop it off, and pick it up when it's done, all clean and folded and smelling nice. It costs more, but not all that much more. I used to do my own laundry when I had machines in the basement, and I'll go back to doing it myself if I have that convenience again. But for now, it's worth it to pay someone else.

When do you DIY instead of PAY? Let's hear it, readers...


thc said...

Madame X: Great post and thanks for the kind mention.

Mrs. THC and I just had professionals wash our windows inside and out. It would have taken me an entire Saturday and wouldn't have had the same result. $300 to free up a Saturday? You bet!

Jose Anes said...

I agree with your post, but would like to offer some extra perspectives:

The convenience factor has to be treated carefully. Things like having to wait for contractors at home. (and the time lost from work or other ventures).

Also, how much longer will you have to work for giving the job to a contractor instead of doing it yourself.

Pay $500 to a contractor to free up your day. $500 in todays money means $11,446.15 30 years later if invested in SP500 (11% Rate of Return). That means that after 33% in capital gain taxes (overflated), and adjusted by an anual 4% inflation, you lost $2,175 of todays money.

I do not know about you... but I make less than $500 a day. So giving $500 to someone to do a job today not only spends a day of the work I did, but increases the ammount of time I have to work before retirement by around 3 weeks!!!! (as I spend around $700 a week in all living expenses).

Money and Investing

thc said...

Jose: We all value our free time differently and I tend to place a fairly high value on mine. After all, if I don't have to spend my weekend cutting the grass and changing the oil in cars, I can be that much more productive at my job during the week and earn more money.

BTW: The maximum capital gains tax rate is 15%, not 33%.

Caitlin said...

We definitely have done all our own painting (we're not done, don't tell) and as many home repairs and improvements that we can feel we can handle (and some we can't handle that remain partially and sadly unfinished)

Hired a contractor to completely re-do the kitchen was in horrendous condition and needed to go down to the studs. This was way beyond our skill level given the necessity of a short turn around time.

We do stuff like our own cleaning (but it is oh so tempting), laundry (in basement) and yardwork (pushmower, very long hedge, flowerbeds) but pay for car maintenance, car wash and window washing ($15 a window...tote worth it to me)

We do our own grocery shopping rather than pay the overhead service fees of a peapod type thing (which may sound extreme in this context, but several of our friends use grocery shopping services now)

I really would like to do more of my own auto maintenance and do plan on learning more about that, but the newer cars are much more complicated so there's only so much i can do there.

Anonymous said...

We're much more of the DIY variety. Hence, why I've taken a week's worth of vacation time to paint our house. ;-)

Oh, and I have the vacation time to burn, so that's not an issue.

Anonymous said...

i think that you should hire a professional to do painting for these reasons: particularly if you own, they do a better job. If you cause any damage to your apartment while painting, you have to pay for it, while a professional painter is insured. Lastly, any injury you suffer while painting, (ex. falling from a ladder, slipping in paint, hurting your back) may cause loss of income.

of course, if you are adept at painting, go for it. However, if you have little time on your hands, as do I, I leave it to trusted professionals.

Anonymous said...

Generally this sounds like good advice, but I'd like to comment on the Paul Newman thing. He donates 100% of profits to charity (check out the labels on his products or his website). I like that I can contribute just by buying a particular brand of an item I was going to consume anyway. So if you're choosing b/w hommemade and Kraft, sure go hommemade, but buying PN may be preferable even to that if you like the charity angle.

Anonymous said...

I love your blog. I just found it and have been reading like crazy, going "yeah!". I've always loved saving money and watching it grow - something my mom ingrained in me at birth.

On this topic, I agree with you on the time issue. If you've got better things to do with your time then definitely pay someone else. However, I believe it's always beneficial to learn new skills so if you've got the time and energy that's needed to go into acquiring a useful skill that could be put to use again in the future then go that route.

great blog. keep it up!!

Anonymous said...

Great blog, by the way. :)

My general rule is that things that could possibly kill me (or someone else) if messed up go to a professional. Mostly, car repairs fall in this category.

I do my own cooking, cleaning, laundry, and most minor repairs (because I have the tools on hand and it takes less time than waiting for apartment maintenance to figure it out!). I make most of my own clothes. My husband will let me alter his clothes, but he'd kill me if I tried to get him into a homemade suit.

Anonymous said...

I wash my own car. The $3-5 car washes that are on tracks can ruin your alignment, according to my car-obsessed boyfriend, and the hand washes run $20-30. Great way to save money and spend a little time outside.

I also learned how to change my own car filters. You can see pictures and get instructions in your car manual or search online. The filters ran me about $25-30 for both of them, but would have cost $50-70 to get changed at the shop.

Anonymous said...

I totally agree with you. I do a lot of DIY. I buy fabric and sew my own curtains. I made a duvet cover for my oversized queen duvet by buying two high quality king sized flat sheets at Marshall's for less than $20. Sewed them together with a little piping and buttons and voila, custom made duvet cover. I tried looking for one to purchase but oversized covers are hard to find and the ones I found were over $100!

I also try to do some of my own car repairs. I changed my spark plugs last night. I found a DIY online with instructions and pictures. All I had to pay for were the plugs ($50 for four platinum plugs, which last 30K miles) and it only took about an hour. I did have to get my roommate to run me to the store halfway through to get a longer ratchet extension, so that was an extra $7. But next time I won't need to buy that and since I've done it once I'll be better/faster at it.

My Half Of said...

I pretty much always do it myself because I love to learn. The limiting factor in car repair is the complexity of diagnosis and if the tools can do the job are less expensive than it would be to pay someone else. For instance, having my fuel pump go out that is in the inside of the gas tank is beyond me because I don't have anywhere to put the gas that I must take out of the gas tank, so I pay dearly for that.

Since information gathering is the limiting factor, I have many friends who do interesting things for a living and know where to find meaningful information.

I did know a New Yorker who lived on the sixth floor and installed a second-hand washing machine in his bathroom that emptied into his bath tub to avoid having to carry his laundry up and down the stairs. I thought that was brilliant.

Anonymous said...

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Unknown said...

I made the bridesmaids a lot happier by making bridesmaid sashes from fabric rather than making them buy them at $25. I had never operated a sewing machine before and I had a lot of experimenting. I take pride in pointing the picture and say: I made that.

Anonymous said...

I love your blog! Just discovered it and going "Yeah!"
I'm not a DIY person myself: but wait, I do all my cooking and cleaning, and most of my beauty and repairs stuff. But I just don't do some things: plumbing, autorepairs, etc. One reason is that I agree with your rule about not going somewhere you seriously stuff up. But in the future, if I earn a bit more, I'd gladly outsource some of the household stuff I hate: though it'd cost me more, it'd leave me with more time in my life. And time is more precious than money. I won't be earning money by freeing up a weekend, but my life would definitely be more enriched.

Anonymous said...

I cook and clean myself. I almost never take cabs, even to/from the airport (it's a long subway ride, but worth the $40 saved each way!).

Like you, I also outsource laundry, because the time saved is worth it. I think the closest laundry is a bit on the expensive side (although I do not live in an expensive neighborhood), so I'm planning to see if there's a cheaper one -- and when I'm up for the extra block or two, will take it there instead.

Just Doo Itt said...

If you can DIY, you also get the personal satisfaction from doing it. And if you have children, it is a good lesson for them that not everything has go be bought.

Ma Francis De Guzman said...

Hi myopenwallet,

I completely agree. I usually wash my clothes, cook bfast,lunch and dinner and iron clothes . It eats up few hours of my time during the weekends and after office hours.

Then I started evaluating myself. How I manage my time. Now, we have a housemaid to help us in doing household chores. Yes that cost something but the result is extremely good.

I get to spend more time to do my usual habit like going to the gym, trekking , doing my online business and spend quality time with my family and friends.


Ma. Francis De Guzman

Anonymous said...

Nice blog, btw...

Ever since my husband and I bought our first home, we slowly got into the DIY world. From painting, yard work, minor fixes around the house, it saves us money to DIY (as long as we know how to do it right). Also gives us the satisfaction when we see good results (especially when I see the garden we planted everyday) and know that we did it ourselves. Doing auto repairs is still left to the professionals. Major work, like building a patio on the back, are among the things we don't want to mess up and willing to pay money for.