Author Box
Articles Categories
All Categories
Articles Resources

Opportunity Cost on Home Improvements

June 07, 2012 | Comments: 0 | Views: 93

Everyone enjoys a good weekend project. There's nothing like the exhilaration of taking on a particular do-it-yourself project around the house to make it newer, nicer, and more appealing. It gives us a chance to build our skills and improve our house all in one shot. And, to make our projects even better, we are saving money. Why pay a landscaper to take out redo our front yard's landscape? That outdated bathroom; no problem, anyone can replace a toilet, sink and cabinets. All these projects cost us is a trip to the local hardware megastore.

But is it really that simple? Are these home improvement projects actually saving us money?

When improving our homes, we always look at the dreaded labor charges found at the bottom of the bill. Each of us convince ourselves that number is simply too high for the work that was completed. We explain to our families that "I" could do the same job as good as the repairman -- no, I can do it better than the repairman.

I had a former co-worker who was an extremely intelligent, technical man. His clients loved him, and his co-workers always approached him when they were in a jam. He had a young family and a strong ambition to complete anything that was placed in front him. This diligent man decided to redo a bathroom in his house. He was smart and capable. He certainly could do it. And why not, at the end of his bathroom remodel, he would have a great bathroom for a very reasonable price. I know he was working on this project on his weekends, and after some time, I actually forgot he was doing it. I was reminded when he came to work with a bandage on his hand. He was in the emergency room all night because he cut is hand during the remodel.

I don't think this was a home improvement that went wrong; it simply illustrates that all there are other costs to these projects that we try to hide from. Let's look at the career of my former coworker while he was doing his bathroom remodel. More importantly, let's look at what he wasn't doing because he was dedicating himself to his remodel. He wasn't staying at work improving his client skills. All that extra work could have paid off in an earlier promotion or even an increase in salary. That's a huge opportunity cost, or the cost of passing up the second best choice. Let's forget about that promotion, but think about his hourly salary. Think about how much time he spent working on that bathroom and pretend he was spending that at work. That time at work and working towards a new promotion.

Opportunity costs are so easy to forget. They are the costs of the next best option that we never took. However, what we pass up should be examined when making choices. Labor costs are expensive, however we are actually paying an expert in that field to do a job we are probably poorly trained to complete. If the do-it-yourself project was given to an expert repairman, each of us could focus on our individual areas of expertise to move ahead our particular career path.

Before you start that next project on your house, spend some time thinking about your second best option. What are you actually giving up by doing it yourself? Examine those costs versus the do-it-yourself savings, and I can almost promise you that you will think very differently about hiring an expert.

Greg is currently an MBA student enrolled at West Chester University.

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Home Improvement


Opportunity Costs


Extra Work


Next Project

Teenage rebellion is easier to tolerate in book or film form. Take a look back at some of the most well known and loved "coming of age" stories set in boarding schools.

By: Harvey McEwan l Arts & Entertainment l July 10, 2012 lViews: 445

An important thing you have to consider before working out is having a pair of great training shoes. You cannot immediately undergo any physical training wearing inappropriate footwear. If you do so,

By: Steve Hill l Recreation & Sports l July 10, 2012 lViews: 349

Granite is one natural stone that is used for several purposes from dimension stone to countertops to sculptures. The use of granite for building the temples and monuments was initiated millions

By: Steve L Patterson l Arts & Entertainment l July 10, 2012 lViews: 298

Up to 65,000 H-1B visas for new employment may be issued each fiscal year (FY) for professional workers, including medical providers. In general, a person who already has an H-1B and applies for

By: Ann Badmus l Arts & Entertainment l July 10, 2012 lViews: 309

Beside coin shooting, gold detecting or the many other things you can do with your metal detector. There is a large group of people who take their metal detector out looking for old stuff. Not just

By: Candy L Lindsey l Recreation & Sports l July 07, 2012 lViews: 293

Many people want to be writers and you may be one of them. In order to make your dream occupation a reality, you need to have a plan. You also need to work on this plan constantly. These tips from a

By: Harriet Hodgson l Writing & Speaking l July 06, 2012 lViews: 440

HVAC repair service are provided by a reputable company who hires licensed and well-trained contactors. Find out what you should look for.

By: Antoinette Ayanal Home Improvementl June 14, 2012 lViews: 152

A board up service may be something you will find is necessary. Consider who to call when this needs to happen.

By: Andrew Strattonl Home Improvementl June 14, 2012 lViews: 161

There are many different types of water damage. Some are more harmful than other and some are easily avoidable with some forethought.

By: Antoinette Ayanal Home Improvementl June 13, 2012 lViews: 206

One of the most challenging things to come back from as a homeowner is water damage. The insidious thing is how many ways in which you can become a victim. Here are some things you can do to begin

By: Ace Abbeyl Home Improvementl June 13, 2012 lViews: 176

Home renovation before moving in can help make the new place more inviting. Consider some of these to make the transition easier.

By: Alfred Ardisl Home Improvementl June 13, 2012 lViews: 146

Service for heat pumps can sometimes be a challenge. Know who to call to get the work done you need.

By: Alfred Ardisl Home Improvementl June 13, 2012 lViews: 157

Discuss this Article

comments powered by Disqus