The article touches on this with “don’t by a spatula from Craigslist”.
No matter your income, what you’re really doing is trading time for goods and services, the money is just a token.
When “doing your own work”, be mindful of the opportunity cost of your time. What’s your rate versus the handyman’s rate? If you fix the porch, are you less able to pick up that overtime shift?
This needs to be genuine trade off, not aspirational. For example, one lots of folks don’t consider: what’s the cost of your commute time, and if you could live significantly closer for a little more rent or mortgage, could you and would you put that time to a use with payback/upside? In a recent datascience article, the author analyzed rents and locations to save a few pounds, tolerating a 50 minute commute. What could they generate with an extra 40 hours of productive time a month, and would they do that or watch the telly?
Reframe as: what can you do with your tradeoffs on time that adds pay-it-forward energy to your financial flywheel?
The key is whether there is actually opportunity cost. Unless I would otherwise be earning money, the monetary value of my time is zero. Usually, I'd otherwise be screwing around with a hobby, playing video games, or other things that don't earn me money. Therefore, I aim to DIY as much as I can. Paying someone to fix my car or the drain under my sink seems like a ridiculous expense if I can do it myself for free.
If instead I were constantly working on $100/hr contracts/gigs, and fixing something would take actual time out of that work, then I would be more tempted to pay someone $60/hr to do something I could otherwise do myself.
> When “doing your own work”, be mindful of the opportunity cost of your time. What’s your rate versus the handyman’s rate? If you fix the porch, are you less able to pick up that overtime shift?
There's more to it than just the money though, although that's certainly a big factor[0].
There's having control over your environment, being self-reliant, shaping it the way you want it shaped. I don't know about other people but that's really good for my mental health - particularly at the moment.
Other benefits:
- You don't have to go into it with a fully realised vision upfront. I can't do that for interior design - I have to iterate towards something decent.
- Inevitably along the way you encounter unanticipated problems and complexities (much like software development). If you've paid someone a shit-ton of money to sort out your house your only options are to throw more money at the problem or compromise in a way you may not like. If you're doing the work you are generally able to consider more options.
- You don't have to compromise in the way you would if you got somebody to do it for you. If I get somebody to design my bathroom for me then, because I don't and can't know the answers to all the questions up-front, at the very least I'm going to have to live with some of their answers. Those answers might start to wear on me after I've lived with the new room for a time.
- If I screw something up myself or decide I'd prefer it to be different I have zero qualms about undoing my own work, partly because I know I can redo it in the way I want, but also because there's less risk of sunk cost fallacy clouding my thinking.
- On the odd piece of work for which I will need a tradesperson they're not going to be able to take me for a ride.
Working on your own house is a real confidence building exercise that I'd recommend to anyone, and especially those who feel like they have no practical skills, for reasons that go far beyond the financial.
[0] In theory I could afford contractors; in practice I'd have to make sacrifices in other areas where I'd rather not make sacrifices to do it.
At some point though time doesnt really equal money. For many we can find a way to make money with that time. But if you are working a low income job that does not allow for overtime pay and you don't have skills you can use to generate income on the side... money is money and time is time.
That’s the gist of my second to last paragraph. For this time value to be real, could you and would you be able to redeploy the time? This scenario was premised on having the skills to do your own repair work.
To be clear, I’m acknowledging your position, but hold that it is, by and large, a trap to believe that time cannot be leveraged. For instance, can you fix someone else’s porch for more than you’d save by fixing your own? Probably.
What works to low end income advantage here is that if you’re at the left end of the income bell curve, there are many more people to the right of you who can compensate you for your time to free up theirs, while those still lower than you can be leveraged to free up yours. Not saying it’s easy to find one’s ratchet, but odds are high a ratchet is there.
No matter your income, what you’re really doing is trading time for goods and services, the money is just a token.
When “doing your own work”, be mindful of the opportunity cost of your time. What’s your rate versus the handyman’s rate? If you fix the porch, are you less able to pick up that overtime shift?
This needs to be genuine trade off, not aspirational. For example, one lots of folks don’t consider: what’s the cost of your commute time, and if you could live significantly closer for a little more rent or mortgage, could you and would you put that time to a use with payback/upside? In a recent datascience article, the author analyzed rents and locations to save a few pounds, tolerating a 50 minute commute. What could they generate with an extra 40 hours of productive time a month, and would they do that or watch the telly?
Reframe as: what can you do with your tradeoffs on time that adds pay-it-forward energy to your financial flywheel?