Sites around the web, including this one, are always pushing free or DIY alternatives to lots of things. And, in most cases, I think that they (and I) am right. There are so many things that we pay other people to do that we can just as easily do ourselves. Just about a year and a half ago, I built my own deck. It wasn’t necessarily easy, and it certainly wasn’t quicker than hiring someone to do it for me, but boy did it save me some money.
I truly believe that there is little that you and I cannot do ourselves. With a quick search on Youtube for the DIY project, and a few quick web searches, we can have some pretty detailed instructions on how to do anything. Well, OK. Probably not something like brain surgery. There’s probably a bit more of a skill/knowledge gap there. But, certainly, most everything else.
Occasionally, I find a service that I decide I’d rather outsource to someone else. Oil Changes are an excellent example. Can I change my own oil? Absolutely. But, for $30, I get someone else to do it for me. I don’t have to mess around with getting the filter loose, disposing of the waste oil, and I certainly don’t have to crawl around under the car doing it. For me, it’s well worth the $20 or so difference to have someone else do it. That’s more of a choice of convenience. Meaning, for me, that it is just more convenient to have someone else do it and save me the time and effort.
There are, however, some services that have less to do with convenience, and more to do with some other factors.
Saving Time
In the case of my DIY deck, I could have saved a whole lot of time by having someone else do it for me. For a professional with a crew of a couple of guys, it probably would have only taken 3-4 days. Maybe less. It took me several weeks. Obviously, it saved me a lot of money to do it myself, but if I had been crunched for time, it would have made a lot of sense to factor the time it would save into my choice. I had the time, so it wasn’t that big of a deal. (note: I say that now. At the end of the project, I was seriously wondering why I did it myself) The choice to have someone else change my oil isn’t weighted so heavily on saving time, but that is a factor. I can have someone else do the work, and all I have to do is drop the car off.
Motivational
I think this is one that many people discount too often. In many of those cases, people choose to do something themselves strictly to save themselves some money and then fail at it. In my case, I’ve tried, for many years, to control my weight. I used to be an athlete, so I’ve always thought that I had the tools to lose the weight myself. I’d start by finding some calorie counter that was free and start tracking calories. But, what inevitably happens is that I forget to count for a day or two and then it stretches to a couple of weeks. If I had lost any weight, it goes right back on. Sometimes, paying for a service that has free or DIY alternatives can be motivational. You’re paying for it, so you better get the most out of it. I recently joined Weight Watchers Online and that factor has helped a lot. There are other factors, but you better believe that the fact that I’m paying for the service is playing into it as well and keeping me working at it.
Hate/Fear
How could I write this post without adding this factor. There are just some things that you hate to do. For one reason or another, you just hate doing them. To you, not doing that task is worth the money to have someone else do. Maybe it’s mowing the lawn. Maybe it’s changing the oil in your car. Maybe it’s losing weight. Wait, maybe not that one. But, how cool would that be! For me, I tend to avoid major electrical work. There’s just something about the possibility of electrocuting myself that I don’t like… Another would be doing anything very high off the ground. Can’t do it.
Impossible
As much as I (and you), would like to think that there isn’t anything outside of our realm of possibility, we always seem to find something that we just aren’t capable of doing. While I truly believe that you can learn to do many of the things that you think are impossible, I recognize that sometimes there are things that are physically impossible. It doesn’t happen very often, but it does happen.
Saving money by doing things ourselves is a good trait to have. It helps us keep our budgets from overrunning. It keeps us learning new things. It gives us a sense of self worth by developing new skills and knowledge. But, sometimes, there are other factors at work and we make the choice to have someone else do the work for us. Maybe the cost difference isn’t worth the time you’d put into it. Maybe the extra time you’d spend on it isn’t worth the savings. Or, maybe you need some monetary motivation. Whatever it is, we develop our own factors that go into the decision, and make a choice over whether to do something ourselves, or to hire someone to do it for us.
What are your factors in deciding whether you DIY or not?
I think we can all agree that most debt is bad. Some of us might even agree that all debt is bad. Nearly all of us will also agree that nearly all of us have debt. It’s not a comfortable thing to have usually, and, since you’re reading this, I can only assume that you’re dedicated to paying it off like I am.
Like the debt conquistadors before us, we’ve learned that knowing your debt is key to besting your debt. You can’t win a race without knowing where it starts and where it ends. But, somehow, you’ve also got to be able to track yourself along the way. You’ve got to track your debt, and track your progress in paying it off.
Many of my indebted blogging friends have gone so far as to track their debt on their blog. Many of them have even gone so far as to create a nice progress bar that we can easily see how far they’ve made it. I don’t do that. Not because I’m embarrassed by the debt, or the progress we’ve made, but because I decided years ago that I wanted to keep it private. You don’t need to know how much debt I have any more than I need to know how much you have. We aren’t in a race against each other, and I surely don’t want anyone feeling badly about how much debt I have and trying to catch up. 😉
No matter how you go about it, keeping track of your progress as you pay off your debt is important. If you’ve been reading Beating Broke for long, you’ve probably gathered that I’m a fan of budgets. I think they’re a useful tool to help people like me keep track of what they spend and where they spend it. Budgets have helped me get control of my finances and move them in the right direction. So, it’s only natural that I use my budgeting software (YNAB) to keep track of how much I owe and where.
There are tools all over the place to help you track your debt. One of the sponsors of the Debt Movement, Ready for Zero, is a great tool to not only help you keep track of what you owe, but to also help you plan how you’ll pay it off. Tools like Mint also do a really good job of giving you an online tool to track your debt (and other accounts). I don’t use any of them. Mostly because I haven’t come across one that actually connects to all of my accounts. My local accounts at a credit union that is small enough to not be fully integrated (I guess) with the services that those sites and apps use to update accounts.
If you want to go really frugal, a simple spreadsheet can do the trick. Just list out all of your accounts, how much you owe on them and then update it as you make payments. Want to make it fancier? Track them monthly, then make a colorful line graph of your progress.
It doesn’t matter what tool you use. The point is that you track your debt. Know where you started with your debt, and then track your progress as you make your payments and pay it down. Even if you aren’t paying off accounts every month, it helps with motivation to keep going.
Any good anti-debt blogger (like me!) will be able to tell you all kinds of ways to pay off your debt. There’s methods, and tips, and even a certain way to hold your nose. Ok, maybe I’m kidding about that tips bit. Or is it the nose part? I’m confused. Seriously though. There’s a debt snowball, made famous by Dave Ramsey, then a debt avalanche, then a debt blizzard, and so on.
But, the one key thing that you absolutely have to have if you want to pay off your debt is knowing your debt. You’ve got to know the number, the type, and even the method of your debt. If you want to overcome your debt, you’ve got to know it inside and out, upside and down.
How Much Debt
Just how much debt do you really have? If you’ve do a budget regularly, (if not, start) take the time to write down how much you owe to everything you make a payment to. Keep in in a spreadsheet and update it periodically. Put a big bold total across the bottom. Is it a high number? Use that as motivation to pay it down. Is it a low number? Use that as motivation to finally get rid of it all! Watch the total get smaller and smaller. (If you’re an spreadsheet junkie, create a line graph for the total!)
What Kind of Debt
There’s a common argument over whether there is any such thing as good debt, or if it’s all bad debt. I happen to think that argument is a little too black and white and that it really depends on your situation. If you know how much debt you have (see above), now you can categorize it. This really isn’t as hard or as complicated as it sounds. We’re talking simple categorization here. Is the debt on a credit card? It’s credit card debt. A mortgage? Mortgage debt. Car loan? Car debt. Put them all in a category, and total the categories.
How Did you Get Your Debt
This is going to sound silly, but now take a hard look at your debt and decide how you got it. Some of it will be obvious. You got that mortgage debt by buying a house. The car loan by buying a car. But, I also want you to go a bit further. Did you buy that car (or the house) because you absolutely needed a car? Or did you buy it because you had gotten bored with the old one? Categorizing your credit cards this way will be a little harder. It might be easiest to go through old statements and look at purchases. What are those purchases? If you’re buying groceries and other small priced consumables on your credit card, but not paying those charges off right away, that’s a good sign that you have a problem. Determine why you’re spending the way you are, then find a way to fix it.
Now, Get Rid of Your Debt
Now you know how much debt you have, what kind of debt it is, and how you got it. Let’s get rid of it. If you’re comfortable sharing your totals (even anonymously), joining something like the debt movement can be a great help. There’s tools out there that can help you, like Ready for Zero. If you want to go it alone, here’s a simple method for starting. Go back to the list of categorized debt. Start with the category(-ies) that are un-secured (that means they have no asset like a car or house tied to them) and start paying those off with every spare penny you have. You can sort them largest interest rate to lowest interest rate, or smallest balance to largest, or however you want, really. Just start paying them off. Get them taken care of, then start on the smallest of the secured (tied to assests) debts. Rinse, recycle, reuse, repeat.
If you feel like sharing, tell us in the comments below how much debt you have. How much have you paid off?
