18 September 2012
Do the math: Does D.I.Y. pantry stocking pay off?
At the risk of boring everyone with blueberries again, I wanted to crunch some more numbers around the topic of D.I.Y. pantry stocking. You'll recall that Rowhouse Livin' went to New Jersey in July and U-Picked 12 pounds of blueberries, then made pie, muffins, jam, syrup, and a few other things with the produce. The cost for the 12 pounds of blueberries, plus gas and tolls, was $26.00. But reader Ray wanted me to "calculate in the cost of [my] time." Here goes.
Round-trip drive to the U-Pick farm: 60 min.
Blueberry picking: 100 min.
Jam: 120 min.
Pie: 5 min.
Cobbler: 10 min.
Muffins: 5 min.
Syrup: 15 min.
Brandied blueberries: 45 min.
Consumed fresh: 1 min.
Frozen: 1 min.
TOTAL: 362 minutes (6.00 hours).
If I had obtained all these finished products from the supermarket, I would have used time thus:
Round-trip walk to store: 30 min.
Shopping: 15 min.
Unpackaging: 2 min.
TOTAL: 47 minutes (0.75 hours).
Recall that the D.I.Y. outlay was $32.76, and the estimated supermarket cost was $100.49. Now, what to do with these numbers? If I multiply my hourly rate by the time used, then I get what someone would pay me for lawyering. That's not completely apt, because a cook at my level of kitchen skills would make less than what I charge my clients. But arguably I should use my rate, because the money that I earn at that rate is the money that I use to pay my household expenses. So I'll use my attorney rate, multiply it by the time, and get a Rowhouse Livin' labor cost. Then if I subtract the actual dollars spent, it looks as though I'll get a "real" comparison of outlay.
Or do I? Let's call my hourly rate $100.00/hr. and see what happens.
D.I.Y.: (6.00 x $100.00) - 32.76 = $567.24
Supermarket: (0.75 x $100.00) - 100.49 = -$25.49
What? If I'd gone to the supermarket I would have made $25.49, but because I made everything myself I spent $567.24? I'm no economist, but something tells me that even though the arithmetic works, I'm not asking the right questions of the math.
What if I put it this way? In The Complete Tightwad Gazette, author Amy Dacyczyn suggests looking at a particular task, figuring out how many times you can do it in an hour, and then multiplying that number by the cost of buying the item or not doing the task yourself. By Dacyczyn's logic, that gives you a truer "hourly wage" yardstick by which to measure whether you should D.I.Y or go shopping. For example, it takes me 15 seconds to wash and rinse a coffee mug. One disposable coffee cup, at $54.00 for 500 paper cups, costs $0.11. So this 15-second task saves me $0.11 every time I do it. Theoretically, I can wash and rinse 3600 coffee mugs per hour; 3600 x $0.11 gives me a Tightwad Gazette hourly wage of $396.00 when it comes to choosing what kind of vessel I use for my morning coffee.
Should I re-think my law office's billing practices?
But how can we bake the Tightwad Gazette math into a blueberry cobbler? Well, it took me 10 minutes to make the biscuit topping and mix the blueberry filling; I won't count the baking time, because that required no work or attention from me. A cobbler from the supermarket would have cost me $8.23 in ingredients; my recipe cost $4.01 in ingredients and cooking gas, for a savings of $4.22. Theoretically, I could prepare six blueberry cobblers per hour. Multiplying my net figure of $4.22 times six cobblers gives me an hourly wage of $25.32.
That's not an awesome wage for a lawyer. But in return I get to use the freshest of ingredients, avoid high-fructose corn syrup, and get some face-to-face time in with my daughter, helping her work on her kitchen skills.
Finally, notice how I get the most bang for my buck on the "littler" thing, the coffee mug vs. disposable paper cup comparison. As Dacyczyn points out elsewhere in The Complete Tightwad Gazette, people tend to deliberate for hours and hours and hours on the big financial decisions -- house, car, elective surgery -- but they tend to not think much at all about the little financial decisions that they make many times per day -- paper cup vs. coffee mug, convenience foods vs. from-scratch cooking, food cart lunch vs. sack lunch. Over time, though, how many houses will you buy compared to how many cups of coffee will you drink? You can pay the down payment with the money you save on your daily coffee, your groceries, and your lunches. And the practice you get from doing this math on all the little decisions, all the time, prime you for the best thinking when it comes to the big financial decisions.