The Institute (協会)

I don't know if you want to include other benefits in your cost analysis, but many (like myself) find washing my car to be relaxing. It is probably minimally cheaper, definitely takes more time, but there is also a greater satisfaction when the car is all nice and clean.

I think it comes down to what the time spent doing the project comes out of. If it comes out of the "time on couch watching reality tv" account, then it probably is truly cheaper. But, if it comes out of the "finishing my dissertation" or "quality time with my family" accounts, then it probably isn't cheaper.

My dad taught me to change the oil in my car when I was 15. Last year I started taking my car to the "instant oil change" place just down the road. I won't be going back to changing it myself. After driving to Meijers to buy oil and filters, getting home, clucking around under the car, cursing up a blue streak when I drop the plug into the pan of hot oil, then can't get the filter off.. Not to mention the hassle of oil disposal. . NO MORE!! Now I pay something like $40 to get the same thing done in 10 minutes. I bill my work time out at $80 an hour, so the economics of the instant oil change definitely applies here.

Unless, of course, you actually ENJOY changing oil yourself...

I'm one who definitely enjoys changing my own oil. I've done it so many times on my own car that I can get it done in 15 minutes now. For me, I cringe whenever somebody I don't know touches my car, especially when it is something as vital as the lifeblood of the engine (oil). I find it disturbing that they ask you to wait in the waiting area, from which, coincidently, you cannot see the service bay.

To me, there's a great satisfaction in doing it yourself. It may take longer, but I enjoy the opportunity to get my hands dirty, and learn a new skill. It's a stress reliever, something to take my mind off things.

If you are self-employed, then you sometimes can make more money in the hours you would have spent doing the task than the amount you are paying out for someone else to do it. If you are salaried and have fixed hours, then it doesn't necessarily make economic sense to have someone else do it for you.

At the oil change place we use, there is also a car wash. If you get your oil changed, you can take your receipt next door and get the car washed for free. This offer is good for thirty days. That seems to be a good deal.

I think the cost per your hour's worth is the key.

There are some things for which I value my time too much to do it myself.

Changing the oil is one of them. I'm not proficient, so the time invested is huge and the money saved is negligible.

I can get more money, I cannot generate more time.

Paul, yeah other benefits should be included as well. Tell us more. . .

Matthew, said "If you are salaried and have fixed hours, then it doesn't necessarily make economic sense to have someone else do it for you."

Why not exactly? I'm curious.

"Economic sense?" Why doesn't it make economic sense? What difference does salary make in a system of trade offs? Time spent doing "Y" is time spent that you're not doing "X"? Wouldn't the economic sense depend on what the "X" and "Y" are instead of focusing on self-employment vs. salary?

For most of us time is more valuable than money. For example, paying someone to paint your house for you so that you can take a vacation and spend time with your kids makes economic sense in the long-run. Right?

Gunny said, "There are some things for which I value my time too much to do it myself."

Great point! I don't think a lot of guys are taught to make that distinction.

interesting. I really started paying people to do stuff for me when I realized what clients pay for my time. Not that that's directly related to my salary, mind you, but it is indirectly (though imperfectly) related.

So, in that sense, I disagree with Matthew; you *could* just work your 40, and go home, and so a salary isn't going to change...but to succeed and create great things, sometimes more than 40 is necessary, and that means less time to do other things.

One advantage for me in having someone else change my oil is that the mechanics often find something ELSE they need to fix--something that generally I wouldn't know needed to be fixed. The money I spend for getting my oil changed has probably paid for itself a few times in things like "headgaskets that didn't need to be replaced because they got the thermostat and water pump in time."

Interesting counterpoint of Adam Smith's pinmaker analogy and the income tax--the virtues of specialization are somewhat overcome by the fact that Uncle Sam (and Uncle whoever in your state/county) tend to take the first 40% of your income--after tithe, a nickel saved can be a dime earned.

I'm not an economist, and I don't know much (read: "anything") about economic theory, so tell me how my thinking is off in the following scenario.

Let's say I take my car to an oil change place and they charge me $45 and it takes 15 minutes. I won't count the time it takes me to get there and back, because maybe I can combine it with another trip I'm already making (like on my way to or from work).

Now, if I change the oil myself, it would probably take me about 45 minutes, because I'm not very mechanically inclined. I can buy 5 quarts of oil for about $15 and let's say an oil filter costs $10.

So, for a difference of 30 minutes in my day/week, I can either spend or save $20 (depending on how you look at it). Spending the $20 seems like a high price to pay.

For the last year, I've been working 3 jobs (in preparation to start my own business). At my full-time job, I work 35 hours/week and make $10/hour. At another job, I work about 10 hours/week and make $12/hour. At a third job I work anywhere from 5-15 hours/week and make about $12/hour.

The way I see it, I have to work an extra 2 hours just to pay for that 30 minutes I "saved" by going to the speedy oil-change place. How am I looking at this wrong. (And I'm not asking this to be a smart-ass. It wouldn't surprise me at all that I need to be corrected.)

The bigger the ticket, the worse it seems to me. If a painter charges me $2500 to paint my house and it takes him 1 day, but I can do it for myself in even 5 days spending $500 dollars. I don't see how it is in my benefit to pay someone $500/day to save four days when I barely make $100 per day. Maybe I would have 4 days to spend on vacation with my family, but we would be vacationing in a tent in the back yard because I spent all the vacation money getting the house painted.

I just spent 30 minutes crafting that post! Ha! I told you I was no economist.

Sorry Anthony, I should have been more clear. A self-employed person can work more hours to make more money. Most salaried employees have to clock out; working an hour longer doesn't have the direct economic impact that it can for a self-employed person because they are making money for their boss, not for themselves.

I wasn't trying to make an overarching point, just one scenario where this comes into play.

I think there are all sorts of other benefits that one might put into the equation. A couple have already been mentioned (enjoying the work it takes to wash a car or change its oil, being able to ensure it's done properly), but what I had in mind is that it the Bible seems to convey the idea that we are made to do work and we're not made to simply work hard now to be vegetables later.

But I think this might be what you had in mind in your original post, so I don't know how helpful it is. I assume when someone says "worth your time" you mean something like "you could be doing something else more valuable with that time". I think "valuable" doesn't have to be spelled out in purely financial terms though. If changing your oil only saves $5 (and takes half an hour), but you do that instead of being a mindless slob, then I'd say it's worth it. But, saving $5 by changing your own means you're also not able to finish a work project or spend quality time with your family, then I'd say it's not worth it.

So I guess the value of doing it yourself just depends on what it prevents you from doing during that same time. And when we do the cost/benefit analysis, we shouldn't just calculate "time spent" as "time spent making money" because many of us have a lot of wasted time on our hands that we could use to work around our house (and save money in doing so). I hope that's helpful in some way.

When it comes to painting your house, some variables come into play; region of country is one. Where we live, paint doesn't last as long on the outside, so you have to paint more often. Also, if you do it yourself, you usually have to invest in special ladders to reach all the high angles that newer houses have. Do you have the $ and the storage space for that equipment? Can you finish the project in time to get the equipment back if you rent it instead? How are you going to transport the rental equipment if you don't own a truck. Painting the inside of the house should be an affordable DYI project. Investment in equipment, and it's storage is managable. The projects usually take just a few days. We do the inside (unless there is drywall repair, then we hire professionals), leave the outside to the pros. The cost is worth it.

You know, I always bristle when someone says "Time is money," and just leaves it at that, as if money is the final definer of all things of value.

I was trying to think of a clever way to make a point about saving time not always being the best choice, especially when family economics comes into play, when my RSS gave me this:

http://thedeliberateagrarian.blogspot.com/2008/04/backyard-sugarin-part-1.html

This is the thought pattern we must develop when considering the economics of the family, over and above the economics of a dollar.

In other words, what is more valuable: teaching your son how to change the oil in his car?

Teaching your son how to go to Jiffy Lube and pay them to change your oil for you?

PFH

soooo...opportunity cost, then, paul?

is the opportunity cost of your time different than mine? If I had a son, would it always be better for me to teach him how to change the oil in his car, or might it be better to show him how to economize on his time, and develop criterion of when it is more valuable to have someone else do a task for you, and utilize your comparative advantage doing something you're better at, thereby producing more between the two of you?

Ok, how about this then:

Is it better to give my son a fish?

Is it better to teach my son to fish?

If all you've taught your offspring always has a dollar-cost value to it, then when you're dead and gone, what, if anything have you really taught them.

Even Tony Soprano taught his son how to change a tire.

Goodness.

straw man: you keep settin' 'em up, you keep knockin' 'em down.

who's saying you should never teach him? who's saying that "dollars" is all that's worth thinking about?

opportunity cost.
comparative advantage.

I recently paid a contractor $1900 to do some brick work for me. No matter the cost savings of trying it as a DIY project, I didn't have the time or know-how to 1) do it quicker or 2) do it better. On top of that, I would have hated the demolition. On the other hand, a few years ago I tackled laying a hardwood floor and saved significant dollars. Was the time it took me worth the savings...meh, today I might have made a different decision...but I know that if I need a room painted I can do it cheaper and just as good as hiring a professional. Plus, I don't have to spend time getting bids and I still rather enjoy doing it. However, in the future this very well might change depending on my circumstances.

The 'opportunity cost/comparative advantage' point is well taken, but I think that the line between when you should hire out and when to do-it-yourself is really an individual determination based multiple factors: current job, economic resources/savings, skill-set, confidence/determination, satisfaction/disdain, time commitments, family/life stage, availability of skilled labor, market conditions, etc.

...and all of that [current job...market conditions] is included in comparative advantage/opportunity cost.

scott; we're saying the same thing.

@shawn: good to know (kinda wondered if we were on the same page)...just one of the shortcomings here of delayed/one-way communication. :)