Love this: “In the time I’ve saved by not pinching pennies, I’ve been able to put more energy into acquiring income-producing skills.” —Darius Foroux
Can frugality itself be an income-producing skill? I think so -- I saved $300 on a repair this week.
This week my washing machine broke down.
More specifically, I broke it.
In a good-natured attempted to wash cat pee out of a chair cushion, I ended up carting out 100 pounds of soaking wet feathers by hand.
Then it took me two days of work to finish repairing the machine.
The project took me directly away from building income-producing skills.
After reading Darius Foroux’s article, I was left wondering if it was worth it.
The good news:
Now it works great, and I didn’t need a $300 service!
The bad news:
I spent two whole days learning, not earning.
Why I think it was worth it
- After taxes, spending $300 may have required me to earn $400 as an employee or $500 in an independent contractor role. In that sense I earned $250/day for the repair.
- Since I could fix it myself, I saved laundromat time— as an Airbnb host I couldn’t just wait a week for the repair.
- I’m prepared to tackle a similar repair if it ever happens again.
- Finally I got a mental break from other work, other tasks. Even unplanned, I got to the other side of the project with a renewed outlook and a burst of positivity. Apparently nothing makes you want to write like cleaning feathers out of a washing machine for two days!
Are there times frugality doesn’t pay?
I LOVED the story of the friend who spent days saving money on a used car.
I can relate, having recently made a trip to buy a used motorcycle that similarly required immediate repairs.
$1500 changed to $2500 in a hurry after the tow and repair, plus the entire two days of my time.
Buying a motorcycle (especially as a second vehicle) is one of the ultimate not-worth-it frugality decisions. Sure 60mpg is twice 30mpg, but safety gear is mandatory to reduce the risk of any savings being cut by a hospital stay. Usually the motorcycle is bought as a second vehicle, relegating it to the realm of a luxury expense.
Speaking from experience, a motorcycle often does not get ridden in inclement weather when a car is available. So the marginal savings
However, since I’ve made that mistake before and previously owned a motorcycle, riding a motorcycle is now a pretty frugal decision for me.
Because I already learned the skill of riding and have $2500 in safety gear, including an airbag vest, I can keep a reliable vehicle with minimum burden costs.
My personal property tax is $50 a year, my insurance is $100 a year, and I get 60 miles to the gallon. Including repairs, I spent $2500 on it. There are not many reliable used cars at that price point. So, compared to a $5000 car that would cost $200 a year in property tax and $400 a year in insurance, while getting only 30 mpg, I’m coming out ahead by about $600 annually.
It works for me because I only need to have access to a 100% reliable ride, but I don’t actually need to ride it more than once or twice a week.
When I had a motorcycle as a second vehicle, any gas savings were eaten up by additional property tax and insurance, let alone the initial costs of the bike and safety gear. I think this is exactly the type of “frugality” Darius Foroux was talking about as not being worth it.
But now that I usually work from home but need to be able to travel 20-45 miles for work occasionally, having only a motorcycle works great for me.
That’s why I think everyone should look at penny-pinching and their individual situation, and compare the savings being frugal to the potential (lifetime!) earnings of building income-producing skills.
Driving with one headlight: the moral of the story
Returning to the quote I loved, here it is one more time:
“In the time I’ve saved by not pinching pennies, I’ve been able to put more energy into acquiring income-producing skills.” Darius Foroux
This is really awesome advice! Frugality entirely depends on the worth of the activity, and otherwise frugal energy would be better spent on producing additional income.
For example, making your own clothes is not worth it, but repairing your own appliance might be. (Hello, YouTube!)
The trade-off also depends on how much free time you have. It’s a lot easier for a frugal person in early retirement to perform renovations on their own home than for someone working full-time who is trying to decide between a frugal project and a side hustle.
Hosting on Airbnb is a great example — the time it takes to clean it yourself is worth it compared to hiring a maid. That’s because every turnover is a separate cleaning service.
Similarly, writing on Medium gives us a chance to conveniently turn off-hours into earnings, while possibly building up your skills. That can give a big boost to your other endeavors, much more than driving Uber or Lyft in your free time can.
Meanwhile, is it worth it to me to stitch a hole in a t-shirt when I own 40 other ones? No, it’s a great time to practice letting go and tidy that shirt KonMari style by thanking it for its service!
The takeaway is that frugality can pay, penny-pinching usually doesn’t, and income-producing skills are valuable!
As they say, don’t be “Penny wise and pound foolish”!
Keep learning and earning!