Saving Pennies or Dollars is a new semi-regular series on Money360, inspired by a concerning frugal tactics that might not really save that much money. I’m going to take some of the scenarios described by the readers there and try to break down the numbers to see if the savings is really worth the time invested.
Liora said, I made my own soy yogurt for a little while, but a lot of batches failed, which was a waste of money and the batches did not come out consistently. While it looked like an easy process that would save us a lot of money (my husband eats this at least once a day), it was not worth my time and it got more expensive then the store-bought.
Liora’s experience matches my own with regards to some of the challenge of making things at home for the primary purpose of saving money. Almost anything you make at home is fraught with some degree of risk, particularly when the process of making that item is a new one.
For example, I’ve made my own laundry soap in the past. The batch that you see in the post was quite successful. Two earlier trial runs failed, mostly because I didn’t really understand what I was doing. In fact, part of my motivation for writing that post was to try to make sure that others who try to make their own laundry soap don’t fail in doing so due to the simple things that I erred on.
In the case of the laundry soap, messing up a few batches wasn’t a big deal. Since my cost per load with my homemade soap was only about 10% of the cost of Tide, I could mess up quite a few batches while learning and still be able to save money overall.
On the other hand, if you’re making homemade yogurt as Liora is, if you mess up a few batches, you’re going to quickly be on the losing side of the equation. The closer the cost of your ingredients is to the cost of just buying the end product at the store, the smaller your margin of error is.
This comes from experience as well – we’ve made our own homemade yogurt. Homemade yogurt is really one of my wife’s pet projects – I’ve merely served as assistant on a few batches. However, although we’ve had many successful batches, we had several failed batches early on. Again, it mostly boiled down to figuring out the best procedure.
It took a lot of batches of yogurt to get back to a situation where we’re saving money on the yogurt after those failed batches. In fact, depending on the equipment calculations, we might not even be there at this point.
It’s because of these experiences that I would suggest two specific guidelines for deciding whether or not you should make things for yourself.
First, do you use this item frequently and consistently? We live in a house with five people, so we certainly use the laundry soap in sufficient quantitites.
On the other hand, yogurt is not necessarily something we use in great quantitites. We certainly eat it if it’s available, but it’s not something we have a need (or near-need) to use again and again.
Second, is there a large gap between the price of making it and the price of simply buying it? With laundry soap, there’s a large gap between the price of making it and the price of simply buying it. With yogurt, that gap doesn’t really exist.
If you have a large gap, then it’s not a big deal if a batch doesn’t turn out as you would like. If the gap is small, however, an errant batch can result in a net loss.
There’s also something of a third factor: do you enjoy the process of making whatever it is you’re making? I personally enjoy making new things, particularly during the learning phase. The simple act of figuring out how to do something new brings additional joy into my life, so I consider this an added value when making something with the theoretical purpose of saving money.
Making stuff yourself usually saves dollars, but when you’re learning, you can easily knock it down to pennies or even to a loss. Is it worth it to get over that learning curve hump? It depends on you, your situation, and what you value.