Mustachians over $30/hour

[alaskacobalt]

I have seen a great deal of conversation about dropping this, removing that, and one thing that doesn't seem to come up enough is "opportunity cost" of giving up something.  I think this comes into greater perspective when we are referring to someone that is a higher earner, or someone taking home more than what it would cost to hire someone per hour to do certain services. 

While most ideas are great and I can really pull from them, I have taken deep thought and reflection when it comes to services.  I find that too often we just say, cut that service, you can do it yourself, but the reality is... at what cost are you doing it yourself?   For example, I cut my housekeeper/nanny, BUT realized that my ability to earn was dramatically reduced.  After breaking it down, I found that I pay her $10/hour, BUT the income lost equates to $50-$100 an hour as I am doing chores rather than using that time to work.

Does anyone else have a similar situation where they find they are trying to over Mustachian, when in reality some situations it is perfectly acceptable and responsible to be anti-mustachian?  Have you found a way to create a better balance here or ways to cut costs while still maintaining these services? 

BTW I chose $30/hour as a price point of comparison, because it felt like anything less, would equate to a net loss or virtualy breakeven scenario for most services.  I don't think you really start coming ahead until you are sacrificing a $30/hour income or greater.  And this is based purely on whether or not you truly forego income by doing this yourself... by say missing overtime that you would pick up if you didn't have to do these chores, etc.   

[Calvawt]

I think for many of us that make salaries the choice is more about what to do with our free time, outsourcing the lawn care, for example, does not affect my income only my expenses.  I might still choose it to be able to spend more time with my kids, though.  I currently do not hire anyone for lawn care, housecleaning, babysitting, etc, but my wife is not working, so that helps a lot.

If it directly affects your income, then I think the economics supersede the mustachian part of self reliance.  I would think if you are making a "margin" by outsourcing because you can earn at a higher level, go for it.

[Greystache]

A lot of us are salaried employees that are not necessarily going to get paid more if we work a few more hours a week.  I get paid the same whether I get my work done in 40 hours or 60 hours.  I make a little over $170k a year and I still do my own cleaning and yard work. Hell, I need the exercise.  I always thought it was silly for someone to hire a gardener and the pay to go to the gym.

[soontoberichteacher]

This is similar to a question that comes up when people are weighing whether they should bike to work or drive their car. And of course, if every minute of your day could be spent earning more money than you could save by being frugal, you should earn more money.

For most people, though, that isn't the reality.

[Ricky]

I personally think $30/hr is too low to start outsourcing simple tasks like cleaning or even basic stuff handyman stuff. Or even computer work. Outside of basic cleaning there are plenty of services that cost more than $30/hr.

This also depends on, "are you earning your income from a salaried job or a business in which every hour worked is a direct correlation to income?"

I think for most people, even if they make $30/hr through a business likely doing service work theirselves, all of their time cannot be used productively.

Sometimes, income isn't even the factor. Even for someone who only makes $25k a year, if they need major electric work done then it wouldn't make sense for them to quit their job and spend 6 months to a year learning everything they need to do in order to do it theirselves. Especially if the situation requires immediate attention. I think that the whole point though is learning to be self sufficient so that when situations like these arise, you'll be more likely to do some of it yourself. Even if you can't do it all, you'll have a much better idea of what anyone should be charging and whether or not it's a fair price or not.

[Janie]

Like previous posters I am salaried so I wouldn't gain from working additional hours to pay employees.

Apart from monetary considerations, I find there's value in avoiding outsourcing. When I do my own house or yard work I remain conscious of the burden of ownership. If my lawn was so huge that it took me hours to mow or my house was so vast that keeping it clean was onerous, then maybe I'd re-evaluate the need to have them. Beyond that, all family members can help with routine chores.   Even young children can be taught to contribute. They look after their possessions, make their beds, clean up after themselves, help with dishes, etc. IMO this is really beneficial to them. Cooking together or raking leaves can be a lot of fun, too. 

I'm healthy enough to take care of myself and my property. That's a fortunate position to be in. If/when I'm in a position of need and can't handle things, I'll get help. I don't want to rush that.

[DMoney]

We had a discussion along these lines in my house recently.  Thinking about buying a fixer-upper and feeling very inspired by MMM that we can do all sorts of fabulous things on our own, like build a fancy tiled shower.  Of course we have NO experience doing much of anything handy.  But I was already thinking about using lots of my vacation time to learn and work on such projects.  Sounds rewarding, right?

But then I REALLY started thinking it through.  I can moonlight and use my vacation days to pick up work, which normally pays $1100-1500/ 8 hr day.  Then use that money to hire someone who actually knows how to tile a shower, etc.

[MoneyCat]

If cutting a housekeeper greatly reduces your income, then you might want to reconsider your level of cleanliness and/or the size of your house.  People get ridiculous about it these days, even though we have technology that makes pretty much any housecleaning an absolute cinch.

[Ozstache]

Opportunity cost with such activities is not just about money. The self-satisfaction and humility you achieve by doing such activities yourself cannot be bought.

[Goldielocks]

If cutting a housekeeper greatly reduces your income, then you might want to reconsider your level of cleanliness and/or the size of your house.  People get ridiculous about it these days, even though we have technology that makes pretty much any housecleaning an absolute cinch.

Ha!  Love it.  This response surprised me, and I may also have too much house, but my tolerance has climbed a Lot in the past 8 years.

To OP, I actually find the opposite effect.  If I don't move around from time to time, I get less productive.  Mowing lawn or even weeding are particularly good for me, as is grocery shopping, etc.  I dislike housework, but it too is helpful in moderation to my focus and earning potential.

My best breakthroughs at solving work problems are when I am washing dishes or thinking about not much at all, while my hands are moving.  It also puts me in a good mood to get actual things done, so work stress about 'idiots' is reduced, too.

When I travel, in a hotel for a week, alone, without chores, it is pretty bad.  Losing the 'can do' feeling gained by tackling new chores or skills  really cuts down my ability to be the best at what I do.

Key exception:
In the past, having to stop work promptly to pick kids up from daycare WAS a big loss in bonus, as well as promotions.    I missed out on taking on the 'special projects' requiring after hours effort to see through.

[deborah]

Opportunity cost with such activities is not just about money. The self-satisfaction and humility you achieve by doing such activities yourself cannot be bought.

+1

Also, you can choose your activities, beginning with easy ones, and gradually becoming badass.

[Raay]

To be fair, from a purely economic perspective, you should also consider the transaction costs associated with outsourcing. If you have to arrange for someone else to perform some labor and then inspect the results (as you inevitably have to unless you're satisfied with getting ripped off), that's also something which costs your precious time.

Then there is the insurance and self-reliance aspect of it - being able to perform certain activities by yourself makes you more independent in case of emergency while not being able to perform them puts you at mercy of contractors (as with everything else, you lose your ability without training).

Variety is the spice of life. What seems like a chore to a professional may actually look like a pleasant diversion to a hobbyist (so you're spending money on entertainment and get bragging rights here in the forum rather than saving money - once you become pretentiously rich that it is which matters more).

Finally, money not spent generally goes somewhat further than money earned because of taxation. On top of that, when you hire a professional, you pay not just for the immediate labor, but also cover part of their fixed costs and of course profit.

All that said, doing those things which you both fail at and despise in the name of saving some money while paying higher opportunity costs, is obviously a loser's choice and most importantly it does not scale. This foundation of capitalist thought is apparently something which super-frugal people (unlike MMM) tend to miss a lot: income, unlike savings on expenses, can be scaled up infinitely (at least in theory). It's a shitty business which thinks only or primarily in terms of reducing expenses and confuses investments with expenses (this confusion can go in both directions, BTW).

[alaskacobalt]

Lots of awesome responses that got me thinking quite a bit.  I guess I never thought about the potential self satisfaction from doing things myself.  After thinking about it, I feel that I like the idea of hiring people as it is a basic symbol of my success.  I get pleasure in knowing that I have succeeded so much in life that I can hire other people.  This is a good feeling, especially when I cut out most every other luxury in life, such as cable.  It is a luxury that can be justified through greater productivity and thus income.

I never did consider that greater working means possibly lower productivity.  I work in a sales from home.  The more hours I work the less sales I make per hour on average.  The reason?  Burnout.  So I guess the best idea is to figure out where I am hitting my optimum performance and then figure out where I can possibly save from there.  Job burnout can only worsen over time, so I need to factor this into the equation. 

We are actually looking to build a house in a few years and wanted to do much of it myself, but the reality is that I lack even basic handyman skills so I would need to do considerable training/educating to get to where it is even plausible to do small portions of the project.  I would love to be able to say to my children that I built the house and pass it down as a "family" house.  So sometimes things like this have a greater emotional value than you can put an actual monetary value on.  Since I have four boys... just working with them and doing it together, allowing each of them to put their own imprint on the house could be an experience that you just can't put a cost/value on. 

[BlueMR2]

This also depends on, "are you earning your income from a salaried job or a business in which every hour worked is a direct correlation to income?"

This.  I do a lot of grunt work myself instead of outsourcing because it's a false opportunity cost.  If I'm not mowing the lawn and pay somebody else to do it, I won't come out ahead as my time really isn't worth anything when I'm not at work and on the clock.  At least if I mow my lawn myself my time has some value (saving $20) vs. paying someone $20 and not having an extra income...

Lots of lazy people like to make that excuse to outsource.  "My time is worth more than $X/I can make more than that".  Universally, they squander the time anways.  I do my best to facepunch with "so, exactly how much money did you make sitting on the couch watching the game while paying someone else to do your work...".

[sheepstache]

In addition to all the other excellent points made, one deserves a bit more fleshing out: people tend to overestimate their hourly rate. First, factor in taxes, then wardrobe/training/other costs, commuting costs, time spent commuting, meals eaten out you could have cooked at home, etc. You can check out the real hourly wage calculator here: http://mustachecalc.com/

[Dr. Doom]

Opportunity cost with such activities is not just about money. The self-satisfaction and humility you achieve by doing such activities yourself cannot be bought.

+1

Also, you can choose your activities, beginning with easy ones, and gradually becoming badass.

It can also improve your social skills because you'll be able to talk to people about a wider range of subjects.  Example:  Someone at work is talking about tiling a bathroom. 

Since I've done this kind of work, my level of engagement in the conversation is suddenly much higher because I have something to contribute.  It's an unexpected perk of learning new skills and doing things yourself.

On the other hand, if I haven't done this sort of thing (because I've outsourced it) I'm only mildly interested and probably am inching away from whoever is speaking so I can get back to my desk.

[happy]

The other issue seldom taken into account is  the lack of efficiency involved when you pay some one to do your chores.  When you grow herbs or leafy greens, its very efficient to just pick what you need: no wasting half a lettuce or most of a bunch of herbs. Same applies to paying for chores:  I used to have an ironing lady who was cheap and efficient, but ironed with a very hot iron which would leave iron prints on acrylics and  the bottom of the iron tended to go black. Try as I might I couldn't get her out of this, and since she was a fab ironer otherwise I would remove anything from her reach that she might damage before she came. By the time I timed the washing so there was stuff for her to iron, and removed fragile items and ironed them myself, it was fiddly and inefficient  and when I stopped using her services I barely noticed the difference.

Likewise I cancelled my lawn service when YNAB showed me really how much it was costing me. Again, I'm getting exactly the job I want without leaves being blown where they shouldn't, and actually I think the lawn is much better now its cut with a hand mower which leaves it longer, and not so often. Also I can mow it when I think it needs it, and not feel put out that they haven't come yet and its too long, or that they came when it was still short and wasn't really necessary.

[deborah]

In addition to all the other excellent points made, one deserves a bit more fleshing out: people tend to overestimate their hourly rate. First, factor in taxes, then wardrobe/training/other costs, commuting costs, time spent commuting, meals eaten out you could have cooked at home, etc. You can check out the real hourly wage calculator here: http://mustachecalc.com/

When did http://mustachecalc.com/ come about? I have missed it before in the forum. Nice stuff - pity the vehicle cost thing is only in miles and gallons rather than giving a choice of litres and kilometres as well. Apart from that - terrific!

[justajane]

Opportunity cost with such activities is not just about money. The self-satisfaction and humility you achieve by doing such activities yourself cannot be bought.

I love this sentiment. Thanks for expressing it. This is what I've felt but haven't been as able to articulate so succinctly as you do.

I've always felt this way about hiring a house cleaner. For me, I would feel like I would be saying that I'm above cleaning up my own mess, that other people are better suited to scrubbing my toilets. IMO it just reeks of social stratification, but I recognize that this perspective is controversial and assumes things about the thought processes of other people. I recognize that for other people it might be a satisfying exchange of labor and wages. And of course, I do grant that in public places this service is necessary, as it is in the case of those who physically can't do it themselves (the elderly, the disabled). But you really put your finger on  my own motivation for rejecting outsourcing, especially for things that are not skilled trades - humility.

[Albert]

I think some of us are a bit too concerned with efficiency. I personally haven't outsourced any tasks recently because I have little need for it (modest sized rental apartment, no garden or car), but would do so if there was a need for something I haven't done myself before. Nothing to do with money, I just value my free time and I'm fine on spending it as inefficiently as I wish.

[sheepstache]

In addition to all the other excellent points made, one deserves a bit more fleshing out: people tend to overestimate their hourly rate. First, factor in taxes, then wardrobe/training/other costs, commuting costs, time spent commuting, meals eaten out you could have cooked at home, etc. You can check out the real hourly wage calculator here: http://mustachecalc.com/

When did http://mustachecalc.com/ come about? I have missed it before in the forum. Nice stuff - pity the vehicle cost thing is only in miles and gallons rather than giving a choice of litres and kilometres as well. Apart from that - terrific!

Glad you like! It was made by one of the forum members, Destron. I'll go bump the thread.

[alaskacobalt]

Lots of good points.  For me, a lot doesn't apply simply because I work from home and only go to my main office maybe 1-2 times in a month for only a couple hours at a time.  So this means that I can do certain tasks while at work and do certain activities while working as well.  For example... I can day trade while working and do some freelance writing.  And unlike someone on a salary, my income is 100% depended upon how many hours I work and I can literally work as many hours as I want to make as much as I want.  Since I don't drive, I always eat at home, get to wear whatever junk clothes I want, and don't even have to shower daily, haha, I can save significantly on those costs usually associated with going to the office. 

I literally cut my food costs by working from home from $2k/month to around $500/month for a family of 6.  I had no idea that I was costing the family $1,500/month just by going to the office.  Add in the $200/month in fuel and the $400/month car payment... I now have $2200/month more just by working from home.  Crazy! 

[samburger]

In addition to all the other excellent points made, one deserves a bit more fleshing out: people tend to overestimate their hourly rate. First, factor in taxes, then wardrobe/training/other costs, commuting costs, time spent commuting, meals eaten out you could have cooked at home, etc. You can check out the real hourly wage calculator here: http://mustachecalc.com/

When did http://mustachecalc.com/ come about? I have missed it before in the forum. Nice stuff - pity the vehicle cost thing is only in miles and gallons rather than giving a choice of litres and kilometres as well. Apart from that - terrific!

Glad you like! It was made by one of the forum members, Destron. I'll go bump the thread.

Ooooh, I missed this, too. Thanks, Sheep!

[mxt0133]

I literally cut my food costs by working from home from $2k/month to around $500/month for a family of 6.  I had no idea that I was costing the family $1,500/month just by going to the office.  Add in the $200/month in fuel and the $400/month car payment... I now have $2200/month more just by working from home.  Crazy!

Any tips on how you cut $1500 from your food costs?  I have managed to cut down significantly on eating out, but I still feel that our food budget is high at $1000-$1200 a month. I know I can cut down on some things like snacks which my wife loves.  We don't buy juices or soda, other than adult juice (beer and wine).  Do about 2/3 of food shopping in bulk, but we live right next to a Whole Paycheck type grocery store for fruits and veggies, which I try to minimize by going once a week to a farmers market.

[tomk2]

Any tips on how you cut $1500 from your food costs?  I have managed to cut down significantly on eating out, but I still feel that our food budget is high at $1000-$1200 a month. I know I can cut down on some things like snacks which my wife loves.  We don't buy juices or soda, other than adult juice (beer and wine).  Do about 2/3 of food shopping in bulk, but we live right next to a Whole Paycheck type grocery store for fruits and veggies, which I try to minimize by going once a week to a farmers market.

#1 - Personally, I budget grocery shopping separate from eating out. It gives me a better idea of what food costs versus fun. It also leads me to believe that eating out is a luxury category that could be simply cut if necessary. Preparing a meal at home is probably 80% cheaper than eating out.
#2 - Know what a good price for things are, and only buy them at that price. Compare a few stores that are close by on a weekly basis. If it is all the same to you, buy pears instead of apples if that is what is cheaper this week.
#3 - Building off of number two, don't be afraid to buy something new if it is a crazy good price. For example, squash is probably on sale this time of year. Learn how to cook it.
#4 - If you're buying in bulk, cook in bulk too. If you find yourself eating out because you don't want to cook or don't know what to make, it's a lot easier to throw a frozen dish in the oven at 350F and have your meal ready in 30 minutes (in a lot of cases, you don't even need to preheat, since you are basically warming it up).
#5 - Cut bad eating habits. If you snack mindlessly, try and replace that with a different stimulating activity. Cut back on the "adult juice" if you can.

[gimp]

This totally makes sense - if you earn a lot more than it would cost you to do something, and doing that thing takes away from time spent earning, and it's a chore, then certainly pay to maximize your income. Alternatively, if you would otherwise use the time to recharge, spend time with family, etc - it's harder to quantify, but often makes sense to pay for. On the other hand, if it's not a chore but a pleasure, certainly do it yourself (eg, took me like two hours to learn to change my oil versus paying $15, but it was interesting.) The difficult question is when you don't actually make any more money by paying to have something done for you, and it doesn't really give you pride to do it yourself... it doesn't really affect you positively or negatively regardless, but you just pay for the convenience. I think that last thing is where it's a waste.