how much does foo cost?

January 1, 2006 10:24 PM

How much money do you save by doing it yourself?

For example I need a foo. It costs me 3 dollars and 1 hour to make a homemade foo, however it costs me 10 dollars to buy a storebrand foo. What is the actual cost of the store bought foo?

posted by the giant pill to work & money (17 comments total)

It depends how much you value your time. Is your time worth 1 dollar an hour? ten dollars? if your time is worth a hundred bucks an hour (as you value it yourself, or what someone else would pay you for your time) then the homemade foo costs $103 but if your time is worth two bucks an hour then the homemade foo costs $5. Everyone values their time differently. Would you rather spend that hour on something else, or do you derive pleasure from making the foo?
posted by cushie at 10:27 PM on January 1, 2006

DIY generally is, for me at least, about the act of doing rather than any savings.
posted by joshgray at 10:29 PM on January 1, 2006

The answer to your question depends entirely on the value assigned to "foo." Sometimes it's worth doing yourself. Sometimes it ain't. You figure cost, balance time spent against the necessity of experience and expertise, and chalk the remaining variables to personal quirk and prerogative.
posted by cribcage at 10:53 PM on January 1, 2006

For a means of evaluating what your time is worth, check out the economic concept of opportunity cost.
posted by charmston at 10:55 PM on January 1, 2006

I recently replaced the water level switch on my washing machine. The part was around $20. It took me around 20 minutes to make the switch. If that. To have a repairman come out to do it would've been a $70 minimum fee, plus parts.
I think I came out way ahead. YMMV.
posted by Thorzdad at 11:30 PM on January 1, 2006

OK, going with your logic, the storebrand foo cost maybe $2.50 to make over one hours time for the manufacturer (I'm guessing you paid retail for the raw materials, i.e. yarn). The manufacturer then sold and shipped it to your store and made a little profit by selling it for five dollars.

Your retail store will now double the price to cover their costs and make a profit. If foos are very popular this season, they may sell millions of foos for that amount.

However, if foos are out this year, the store will begin to run sales on foos. First, maybe 20% off, then maybe 25% off, etc. If this is a really bad year for foos, the store will sell them for 50% off (at cost) or less just to get them off the shelves to sell something more profitable.

Otherwise, I agree with cushie... I could not possibly make my own pair of shoes, so I will gladly pay someone else to make them for me. However, I enjoy baking and cooking my own food, so that is very worth my time. Maybe if I were into knitting (I'm not), that might be worth the effort because I would also enjoy doing it.

Hope this helps.
posted by jerryg99 at 11:40 PM on January 1, 2006

Consider how long it takes to get to the store, how much gas you use, and, potentially, the lack of health or exercise benefits from going there.

For example, if you need something that'd take physical exertion to make, perhaps it'd be "cheaper" to spend valuable time doing it, and skip the gym that day, thus causing no time loss at all. There are always a lot more layers to questions like this than you can see at the time.
posted by wackybrit at 12:40 AM on January 2, 2006

Datapoint: I just built (er ... am in the process of building) a house, where I basically acted as the general contractor. I was told that I'd save around $30k doing it myself. Because I took longer to do it than a real GC would (I've already got a full-time job), because I didn't know how to best evaluate the estimates and quotes my subcontractors gave me, and for a few other smaller reasons, I've probably come out around $15k ahead. That's a complete guess, though.

On the other hand, building the house has been an incredible learning process and has developed me in many different ways. (At my in-laws' house at Christmas, I didn't hesitate to take on an easy plumbing task that I might have balked at a year ago.) There are intangibles to doing it yourself — the personal development, the pride in what you've accomplished, the knowledge of how to fix your foo when it breaks, etc.
posted by Alt F4 at 2:50 AM on January 2, 2006

It all goes back to "opportunity cost," like charmston said. Weigh the savings in dollars vs. the time that the project will occupy during which you could be doing something else vs. the benefits you'll get beyond the direct uses of the finished product (new skills, satisfaction/confidence, conversation starters, fame, riches, etc.)

For example, here's a conversation I had with a friend of mine after he finished building his own vacuum tube headphone amplifier.

Friend: I finished my headphone amp.
Me: Yay!
Friend: It took 1-2 months and $150-200.
Me: Yay!
Friend: Now I see why people buy things.

My friend is an audiophile, so the direct benefit to him was a crystal-clear amplifier. The indirect benefit was learning circuit design/building skills. The monetary savings were neglible, given his inexperience at the time, which led to a number of mistakes during construction. However, he now has the experience to do something similar much faster and cheaper.

About a week after he started using it, the amp ended up frying itself into a little puddle. Was he any worse off for the loss? I think not.
posted by bargex at 2:52 AM on January 2, 2006

I think it also is a matter of whether or not the 'foo' you need exists in the right form. Sometimes a 'foo' exists, but it's either too much or not enough for your needs and the barrier to making that foo might be sufficiently low to make it worthwhile.
posted by plinth at 6:08 AM on January 2, 2006

The instinct of doing things is a common one, and can be made a source of pleasure, healthy discipline, and usefulness, even when the work is taken up as recreation...

When one has made with his own hands any object of use or ornament there is a sense of personal pride and satisfaction in the result, that no expenditure of money can buy, and this very fact serves to dignify the task and stamp it with individuality. - Gustaf Stikley

Generally, it's not about how much you save as it is how much you enjoy the work and your pride in it.
posted by unixrat at 6:23 AM on January 2, 2006

Beyond personal satisfaction, opportunity cost, etc, you also have to factor the suitability of the various foos. The stuff you buy in a store isn't custom. I can, for example, buy reasonably decent deli lasagna at the grocery store for about $20 a pan. Or I can buy the ingredients for my just like mama used to make lasagna for about $35 a pan. It then takes me about 3 hours to make it, though only one of those hours is spent actively cooking it.

Ignoring the fact that I enjoy cooking, and thus consider those three hours well spent, there's simply the fact that my lasagna is better than even the best store bought ones. To get better lasagna than mine made by someone who isn't me requires going to restaurants, where the same pan of lasagna costs $70 - $100 as take-out.

The logic is similar for other things that I do for myself rather than purchasing - knitting sweaters, for example. But when it comes to stuff I could likely do, but not particularly well, say, building bookcases, the math works out different, because mass market stuff that works is better than slightly mis-cut stuff I could make, and so I buy them at IKEA. If I couldn't find shelves at IKEA that fit some particular nook of my house, though, I'd have to consider building myself v. paying someone for custom work, where the economics tend to swing much more in favour of DIY.

You also have to, to some extent, factor your background costs, as well. If you're talking woodworking, the upfront tools cost to get into building things could well dwarf the actual costs directly related to your first few projects. Even in the kitchen, I have expensive pans, knives, mixing bowls, etc, to support my cooking projects.
posted by jacquilynne at 7:43 AM on January 2, 2006

People say "My time is worth more than that", but if they weren't building whatever, would they really be on the clock earning money? I mean, if you would otherwise be sitting on the couch watching tv, I don't think you are out anything.
That Stickley quote is great, it's much more elegant than what I say when someone asks why I build hotrods from scratch "Because I like to feel pride in what I drive. And how can you feel pride in something you bought, any idiot can write a check (or get a 10 year loan for a car that last 5 years)".
posted by 445supermag at 7:53 AM on January 2, 2006

'worth' doesn't have to be money. If you want to spend your free time with family or friends, and value that more than money, spending time on a project may not be worth it.
posted by devilsbrigade at 10:36 AM on January 2, 2006

The objective, in life, is to be happy.

As such, any solutions based solely around 'value of your time' versus 'cost of purchase' are unlikely to hold true. These maximize your financial earning power, which is only one factor in determining happiness.

If you were solving this mathematically, you'd determine a utility function with all the variables that matter to you: potential savings, potential risks, personal net worth, expected future net worth, enjoyment of doing the task, enjoyment of the finished product, acquisition of new skills, non-monetary costs of doing the task (time away from family/friends, etc), non-monetary costs of not doing the task (supporting businesses with objectionable policies, etc), and innumerable other factors.

Having done so with great accuracy, you then would've spent so much time building this utility function, and evaluating the task in that context, that you'd regret that you ever came up with this silly idea of strictly applying economic theory to every facet of your life.

You'd then revert to making a budget, and only doing things yourself if they saved you significant expense (whatever that means to you), or if you enjoyed the work.
posted by I Love Tacos at 11:31 AM on January 2, 2006

bargex your friend's headphone amp sounds pretty neat. One of my hobbies is building vacuum tube amplifiers and I'm currently working on a stereo amp; my previous have been guitar amps.

For me, I like building amps both as a hobby and for cost savings. I am at the point where I can build an amp for much less than I could purchase a commercial amp. Also, I have at least one amp that I couldn't buy outside of a custom job. It's a 20 W version of a 72 Orange with a later master volume. The amp is probably unique in the world. Real Oranges were rated 80+W and typically sell for over $1000 for a head. Mine is a nice low wattage combo with a 12" speaker. I have about $250 in it.

People say "My time is worth more than that", but if they weren't building whatever, would they really be on the clock earning money? I mean, if you would otherwise be sitting on the couch watching tv, I don't think you are out anything.

I agree with 445supermag here. Auto repair is another are where I save money and get my off the couch. For example a I had a water pump go out on my Blazer so I got a remanfuctured one for $15 from Autozone and replaced the old one. This repair would likely have been at least $200 between parts and labor at a shop.
posted by 6550 at 1:14 PM on January 2, 2006

My 2 cents....

My time is much more valuable to me than a couple of bucks. I derive little pleasure and often much frustration from trying to do things myself. If I can afford to hire someone or buy the product, that is a much better option for me.

It allows my to maximize my time doing the things I want to do, even if that means just watching tv.
posted by szg8 at 1:19 PM on January 2, 2006