Comments on: Frugality and the Idea of Work

By: Riki

Riki — Wed, 21 Sep 2011 13:54:44 +0000

kristine — I agree that buying non-Tide laundry detergent on sale is much more time and cost effective than making your own detergent.

I have 8 bottles of detergent purchased for $3 (or less) each. Based on current usage, I estimate they will last for 2.67 years. That’s:

Current usage = 1 bottle every 4 months, or 3 bottles per year. My bottles will last 2.67 years.

3 loads per week * 52 weeks * 2.67 years = 416.52 loads

$24/417 loads = 5.8 cents per load.

I’m ok with that. Using Trent’s estimation of 2.25 cents per load with his homemade detergent, I’m spending 3.55 cents more per load. Over 2.67 years, that’s a total increase of $14.80.

Granted, I haven’t priced making my own detergent. But I think I’ll continue buying.

By: getagrip

getagrip — Wed, 21 Sep 2011 12:12:08 +0000

I think the original point Phil made was that going out of your way to do frugal things that could seem extreme to some to save a few bucks takes away time from “having fun” or “living life”. I think the point Trent made was a good one in that he doesn’t so much go out of his way to do something frugal, he makes it part of doing something else he’s going to do anyway and works it in without much effort. So specifically driving ten miles out of your way to go to a gas station that has gas at 5 cents less a gallon to save $1 a tank or so may technically be “frugal” but seems like overkill from a time/effort perspective. However, if that same gas station were ten miles away and on the way to work, getting your gas there is still frugal but now is not such a time or effort sink. Looking for those types of opportunities in your life and lifestyle makes more sense to me.

By: kristine

kristine — Wed, 21 Sep 2011 03:34:18 +0000

Kerry,

I never pay more than 2.49 for laundry detergent for 32 loads. Arm and Hammer on sale, or Purex, of Great Value. Sometimes I pa only $2. When it is on sale, I buy enough for about 3 months, till it goes on sale again. So when I looked at the figures from long ago, I believe I would break even by making my own laundry soap!

By: Becca

Becca — Tue, 20 Sep 2011 20:30:11 +0000

The idea about calculating the hourly value of a frugal task is really just meant to illustrate which tasks are most worth your time to do. It happens that some frugal ideas have high social acceptance, but actually save very little per hour. An example of this is driving slower to save on gas. If I’m doing an eight hour drive, I can save by driving slower, but it takes me way longer to get to my destination. I might save just a dollar or two for the extra hour it takes for the trip. Conversely, some frugal ideas are routinely pooh-poohed because the savings is small each time you do that particular task. If it saves a dollar, then why bother? Well if the task saves a dollar and takes just a minute, then in theory that task is worth $60 per hour. Eventually you will do that task 60 times. Or, over the course of a day you might do many small tasks that each save you just a dollar and take just a minute.
As for the things not factored in, such as learning time… when you figure how much you earn per year, do you figure in how much time and money it took you to go to college, and then reduce your hourly worth accordingly. Nope. Of course there is some learning time. But usually about ten times you do a task, you have figured out how to do it quickly.
I contend that there is also time not figured into purchasing goods and services. In a prior post I wrote that it took me about ten minutes or less to make two quarts of fat-free yogurt. Many stores do not carry fat-free plain yogurt, and so I have often spent several minutes in the dairy section in a fruitless hunt for it. I live in a rural area, and so many frugal things I do are simply to save me a trip to buy something. Even if I combine errands, each errand takes time.
Another factor not considered is that when you do a task to save money, you aren’t getting taxed for the savings. I don’t get taxed on the value of food I grow in my garden. But if I had to earn the money to buy those same vegetables. I might have to earn $130 to buy $100 worth of vegetables. This tax factor more than makes up for variables one might not think to figure in the the valuation of a frugal task.

By: lurker carl

lurker carl — Tue, 20 Sep 2011 20:18:19 +0000

By repairing and rebuilding stuff around the house myself, I save on labor charges and material markups. I’m not earning $80 per hour by replacing the sump pump or repairing a string trimmer, I’m just not spending $80 per hour for someone else to do it for me.

Frugality isn’t about making money, it’s about not spending your money needlessly.

By: Courtney20

Courtney20 — Tue, 20 Sep 2011 19:45:00 +0000

Des – let me say this again: the $558 has already been extrapolated out to retirement. You would actually have the equivalent of $558 in today’s dollars to spend when you retired. Not $56K or $101K or anything like that. $558 dollars. Hence me saying I could retire two days early because I “wouldn’t need” to work those last two days to earn that $558.

By: Des

Des — Tue, 20 Sep 2011 18:46:10 +0000

Getting nitpicky – If you take out vacation time and weekends, $558 for two days is just under $70k per year, which also had to include medical/dental/vision/disability/life insurances. Accounting for those with my family’s numbers (assuming the kids are grown by retirement), that would leave about $56k pre-tax income (in today’s dollars). Sounds like a very reasonable goal retirement income to me.

By: Telephus44

Telephus44 — Tue, 20 Sep 2011 18:45:47 +0000

I agree that the hourly savings is often misleading when presented. The only value I find in using the hourly savings calculation is in comparing two frugal tasks – if I can save $5/hr making my own laundry soap, but $20/hr hanging my laundry to dry, then it makes more sense to hang my laundry than make my soap.

But other than that, the hours “savings” is kind of useless. It’s not putting any real money in the bank account (I could make laundry soap for 10 hours a day, every day, but it wouldn’t pay my mortgage!). Also, most items DON’T take an hour. I rememer reading a ridiculously high “hourly savings” for washing ziploc baggies – like $100/hour – but I am never going to spend an entire hour washing ziplocs. I might spend all of 30 seconds. Trent only spends 15 minutes making laundry soap.

I agree with the calculation, but I think it’s often misapplied. It’s like looking at the grocery receipt and seeing that I “saved” $50. It’s not what you “save,” it’s what you spend!

I definitely want to give props to the “can it be part of family time” suggestion. One of the spending items we’re trying to cut down on is eating out, and I don’t particularly like cooking. However, when my 5 year old son “helps” out it makes it more enjoyable, I get to teach him about measuring things and healthy foods, sets a good example etc.

By: Tom

Tom — Tue, 20 Sep 2011 18:18:06 +0000

The hourly figure always confuses me, often because it’s presented by “skipping steps” in the math. But I also believe it’s misleading on its face. Trent didn’t “earn” $20 an hour nor did he save $20 an hour. He saved $5 making the soap and probably does it on some infrequent basis (going back to his post, he guess about $60/year). That, to me is a much better descriptor of what is going on – I spend x amount of time to save (ie, not spend) y amount of dollars.

By: JS

JS — Tue, 20 Sep 2011 18:09:28 +0000

Like most metrics, it doesn’t necessarily matter that hourly rate calculations don’t mean a lot in real life. It still provides you with information, especially if you’re using it for comparison purposes. But it only works provided you understand the underlying assumptions and flaws in the method and the data.

By: Kerry D.

Kerry D. — Tue, 20 Sep 2011 17:58:58 +0000

@8 and beyond–I couldn’t find Trent’s calculations of saving $12 per year. Given the cost of laundry soap, and the amount of dirty clothes that a family with several children generates, I imagine that the savings must be quite a bit higher.

The ingredients to make laundry soap are inexpensive, the amount of soap used is usually less, and that’s comparing to something like $6-7 for a box/bottle of commercial laundry soap that runs 32 loads. (About a month’s worth of dirty clothes in our family, where we have about a load a day.)

Savings of perhaps $50 a year in after tax dollars might not be earthshaking, but still adds up.

By: Angie

Angie — Tue, 20 Sep 2011 17:56:59 +0000

Amy Dacyczyn of Tightwad Gazette fame claims that in fewer than 7 years her family saved almost $50,000, made purchases of almost $40,000, all on an income of under $30,000, all the while remaining debt-free.

In fact, most of her books are comprised of ways to save on the small stuff!

I’m SURE someone will want to nitpick I mean point out adjustments for inflation, etc. but I personally believe these small ventures are worthwhile.

By: Courtney20

Courtney20 — Tue, 20 Sep 2011 17:51:59 +0000

(Also – I don’t make that much money anyways, because you included weekends in your multiplication.)

By: Courtney20

Courtney20 — Tue, 20 Sep 2011 17:46:03 +0000

Jonathan – but it DOESN’T equal $101K in annual income. It equals $558 in today’s dollars for a lifetime of making your own soap. The extrapolation has already been done. You can’t extrapolate it again to annual income unless you spend the entire year making soap and ‘saving’ the money (and you’d have to be using a heck of a lot of soap).

By: Other Jonathan

Other Jonathan — Tue, 20 Sep 2011 17:23:08 +0000

Johanna: I’m not saying we deprive ourselves – not by a long shot. We spend a fair amount on entertainment, travel, leisure, etc. But it’s targeted to the things that we know bring us the most joy for the cost. We don’t tend to buy “stuff” (at least, not on a whim) because it doesn’t bring us much joy beyond the first few days.
All I’m saying is that rather than setting a “saving target” for a month and then spending what’s left, we simply spend as reasonably little as possible and save what’s left. I think this relationship with our finances helps us save and invest far more than we would otherwise, and with FAR less stress month to month.

By: valleycat1

valleycat1 — Tue, 20 Sep 2011 17:17:26 +0000

#11 Other Jonathan – I agree with your position. My point is that few people who find some way to save a pittance on a given item are actually going to be putting that $ into savings. And they’re definitely NOT actually ‘earning’ $5 by doing so. The reduction in expenses or addition to savings is going to be indirect, at best, as someone above mentioned small savings can add up over time.

By: Jonathan

Jonathan — Tue, 20 Sep 2011 17:17:13 +0000

Courntney20, thanks for doing the calculations for us. If $558 in today’s dollars would only equal 2 days worth of retirement income for you, then that would equal $101k/annual income (again, in today’s dollars). For anyone planning to retire on significantly less the benefit is greater, of course. For someone planning to retire on 1/3 of that amount ($34k in today’s dollars) saving $12/year would allow them to retire 6 days early. Still not a lot, but increase that to $5 or $10 per month and the benefits start to become more apparent.

By: Johanna

Johanna — Tue, 20 Sep 2011 17:14:54 +0000

@Other Jonathan: “We don’t have a savings goal – our goal is to minimize spending.”

I’m not going to go so far as to tell you not to do this – you can do whatever you want with your own money, for all I care – but it’s just not rational.

I really do think there’s a tendency for people (including me, sometimes) to start thinking that frugality is inherently virtuous, and spending is inherently sinful, but it’s just not true. Frugality is a means to an end, a tool to help you get things that you want (where “things” here is used generally – they could be material things, experiences, abstract things like security or flexibility, or something like a big gift to a charity). It’s not an end in itself.

By: Other Jonathan

Other Jonathan — Tue, 20 Sep 2011 16:41:30 +0000

In response to Jonathan and valleycat1:
For my wife and I, our general focus is to keep our expenses as low as possible all the time. We don’t have a savings goal – our goal is to minimize spending. Therefore, every extra dollar we earn goes directly to savings and then to investment.

By: Katie

Katie — Tue, 20 Sep 2011 16:26:27 +0000

I always find the hourly cost calculations for these things kind of misleading (for me) since they don’t factor in things like task-switching/transition time, shopping for the materials, and learning how to do actually do the stuff. All that stuff takes up time and mental energy beyond the time specifically devoted to making whatever-it-is. Not that that’s necessarily bad, if you’re enjoying the process, but it does change the pure cost to time ratio.