A while ago, I had the pleasure of doing a guest posting a website called Frugal Dad. I noticed that the article that ran just before mine was about Outsourcing – Frugal Dad nicely illustrated his own battle between convenience and cash with a task he finds particularly unpleasant because of allergies – lawn mowing.
In the ensuing comments section, there was some interesting discussion on both sides, including some that expressed the attitude “Oh, I love outsourcing everything! My life is so clean and simple now, and it’s the best $500 a month I could ever spend!” And you’ll find similar chitchat on nearly every personal finance site.
I threw a comment of my own into that stream at the time, but the topic seems to come up in real life so often, especially among financially struggling high-income people, that it is time to proclaim this blog’s Official Position on Outsourcing.
Mr. Money Mustache does not outsource ANYTHING*. He believes it is more fun to go through life as a producer rather than a consumer, and while the Monetary Implications of this are secondary to the Life Satisfaction Implications, the money part of it is still HUGE.
Let’s begin with a historical tale. When I moved to Colorado in 1999 at the age of 25, I bought my first house. I met a friendly coworker who had just moved to the state as well, and he bought a house at the same time, right in the same neighborhood.
We each had big dreams for our houses, since they both were in need of some maintenance and upgrades to their fading original parts. We both started by tearing down unnecessary partition walls to open up the kitchen areas of the main floor. We celebrated with beers as we overlooked the sawdust and crumbled drywall chunks that littered the soon-to-be-removed ugly carpeting in our living rooms.
But then our paths diverged. I bought some drywall compound and a $25 texture hopper for my air compressor and set about learning how to patch the holes in the ceiling and match the existing finish. My friend paid $1200 to hire a drywall contractor to accomplish the same thing in his house (he later complained that cleaning up the dust and oversprayed plaster from this contractor took as long as I took to do the whole job).
The next summer, we each built a deck behind our house. Afraid of messing up the job, he hired a contractor to do the basic post work and framing, then he put the surface boards on himself. I borrowed a library book to learn to do the whole job myself.
The same pattern was repeated with flooring, exterior painting, lawn care, electrical upgrades, and kitchen renovation. We both had an interest in home renovation, but he just leaned slightly more towards convenience while I leaned towards stubborn independence. In each case, his hired subcontractors were a source of irritation, making mistakes and overbilling occasionally.
My own laborer was also relentlessly slow and imperfect, but his slowness forced me to pace my spending on materials: “No, Self, you can’t spend $2000 on hardwood flooring, because you need to install the trim around these new windows before you are allowed to buy anything more.”
And all of my old mistakes are still burned permanently into my current mind in the form of Useful Home Construction Knowledge I Will Never Forget.
Fast forwarding to the present year, I went on to build and renovate several houses as well as retire in part from the resulting earnings and lower expenditures, and my friend ended up scraping heavily against bankruptcy last year as debt and job loss caught up with him. (I’m not sure if he ended up escaping or going fully under as we are no longer on speaking terms – the subject of a future article on my Greatest Financial Mistake)
Even to this day, with my retirement income being more than enough to start paying people to do my work around the house for me, I still do everything myself.
A local tree-treatment company taped a card to my door that said, “The Maple tree in your front yard has yellow leaves because of an iron deficiency. Call us and we can save it!”
I ALMOST outsourced this task, because I love my tree. I called the company, but it turned out to be a big operation with a receptionist’s voice prompting me through a voice menu, and I hung up immediately, imagining the bureaucratic and potentially expensive debacle that might follow if I hired them. So I looked up yellow leaves on silver maple trees (“Iron Chlorosis”), learned how to diagnose and treat both the soil and leaves, and spent an hour that weekend drilling out narrow core samples of soil with my son and pouring the treatment mixture down into the roots.
The new knowledge also helped me diagnose several other plants in my garden with a similar problem and treat them too. The net cost of this little bit of Gardening School was about $15, versus $800 to have the tree company do it, and I have new skills and knowledge that will be with me for life.
When a warning light comes on in my car, I read the code with a $22 bluetooth car adapter (connected to an app called Torque) and then consult the service manual and the Internet to learn about what needs fixing. It’s usually a part that costs only a few dollars, so find that on Amazon and follow the wonderfully detailed instructions that people share on Youtube these days. I remove a few screws and clamps, put in the part, and then vroom, another year of trouble-free driving has been earned.
I feel that every time you do something for yourself, even if it’s just washing your own car, you learn new things and build a more balanced personality that learns to love hard work even more. And you build diversity into your day, which allows you to work longer without realizing you are working.
If you’re a graphic designer who works at home, you might charge clients $100 per hour for your work. So why would you take a break to cut your own grass, which takes 40 minutes and “only” saves you $25?
It’s because you can’t productively do your graphic design job every day from 7AM until 11PM. If you try, you will burn out after some number of hours, then need to switch to a non-productive activity to recuperate.
On the other hand, if you begin a day with pulling some weeds in your own garden, then crank out 7-8 hours of fantastically focused design work, then bike out to pick up your own groceries, and spend the evening cooking your own food, working on your own fitness program, cleaning your own dishes and reading library books and preparing for your next day of work, you have a routine that is free from outsourcing, free from unnecessary costs, yet so healthy and varied that you can do it forever without burning out.
In other words, domestic “work” may pay less than your day job when measured by the hour, but after you measure the lifetime personal benefits and the overall savings in after-tax dollars added up over an entire week, you may be pleasantly surprised by the results.
Insourcing also provides a nice way to pace your spending. An outsourcer can quickly call a kitchen contractor, a landscaper, and an auto mechanic and get a whole fleet of workers on the job right away. But the outsourcer then racks up $20,000 in bills that need to be paid within a month.
A self-sufficient insourcer thinks about his kitchen design, his garden design, and his car project, and decides which is most important to him. He schedules his time and works through the projects one at a time, savoring the results as they are produced. To an outside observer, they both get to the same place in the end, but the Insourcer has the added benefits of a deep satisfaction and a broad Money Mustache, while the Outsourcer simply has a higher outstanding loan balance to his creditors.
All of this will seem obvious to the most Oldschool Mustachians among us. But I can see the Outsourcing bug growing among the general populace, as the habits of the rich continue to trickle down to the middle class. To me, it’s an easy decision for those seeking lifetime independence in both the mental and financial senses – you should broaden, rather than narrowing, the range of your daily work.
* OK, I do buy food from stores and let the public school help out with my child’s education, which are technically forms of outsourcing, but here we’re just talking about household chores and a general life philosophy.