A Jack (or Jane) of all trades can do a lot of things that others pay professionals to do. They don't need a mechanic to change the oil, a tailor to hem their pants, or a plumber to fix a leak. While there's a lot of money to be saved by going the do-it-yourself (DIY) route, contrary to popular belief, it's not always a wise money-saving strategy.
For example, a construction project might cost a lot more if it takes you several weeks to complete it and you have to buy or rent expensive equipment. It might cost even more if you're learning new skills as you go, since you're bound to make some mistakes during the process.
If your goal is to keep more cash in your checking account, there are several factors to consider before committing to a DIY project.
- What is your time worth? Calculate your hourly wage to figure out how much you make doing whatever it is that you do. This is especially important if you have a second job, own your own company, run a side business, or have a lucrative hobby.
- What is a realistic time frame? We tend to underestimate how long a project will take. (This is why construction jobs are notoriously behind schedule!) If you've done similar work in the past, you probably have an accurate idea of how long it will take. If you're new to it, multiply your estimate by three to account for the time it will take to learn new skills and fix errors.
- What do the numbers say? Let's say you can earn $30 per hour with a money-making hobby. The DIY project you're considering takes three hours and costs $50 in supplies, but saves $100 (the cost of hiring a pro). In this case, the math favors hiring the professional. The cost is $90 of your time and $50 in supplies, or $140 total--you'd save $40 by hiring the professional, freeing up your time for your money-making hobby.
- Is it a long-term investment? Crunching the numbers is only part of the equation. Is it a project that will take longer and cost more initially, but will save you money over time? Once you've bought equipment, it will be less expensive to DIY again.
After you've done the math, you should know which course of action will be the least expensive. If you're considering DIY solely to keep more cash in your saving account, you can simply go with whichever option the math favors. If there are other considerations, such as a personal interest in learning the new skills, consider the math one factor and your desire to learn another factor, and weigh the pros and cons.