Daily Archives: August 27, 2010

Saving 1,700€ with a hair clipper

Often, after I have cut my hair, it is raised within a conversation the issue of the hair clipper and me cutting it by myself… Last time this happened was couple of weeks ago, and then I decided to reflect on it, make some numbers and write a small post about it.

I bought a Philips hair clipper machine at sometime around 2000-2002 (say 2001). It cost around 20€, though I remember we paid for it in pesetas (1 euro = ~166 pesetas). Since I had started losing some hair, the haircut I was already having was pretty simple: shaving it down to around 9-12mm. Beginning 2002 barber shops were charging about 8.5€ (I do not know how much do they charge now… assuming the price increased with inflation now it should be about 10-10.5€). That was the main driver behind the purchase: the payback time would be extremely quick, between 2 and 3 hair cuts.

In the last 10 years I may have had around 120-130 hair cuts (every 3-4 weeks). These, at the market price would have cost ~1,210€. However, there are some more aspects to take into consideration.

Time. When I used to go to a barber shop, the whole process (home door to home door) would take around 1 hour and a half (90′ – transport, waiting, cutting, transport), while now it takes no more than 20′ (maximum). Then and now, I take a shower afterwards, so I will keep it out of the comparison. This means that now I am saving 70′ each time I have a hair cut… counting the 130 cuts of the last ten years, these amount to 150 hours (about 15 hours / year). I will value these hours on the cheap side, since half of this time I was a student, so let us say 5€/hour. The time savings amount to another ~750€.

This time was my time. However, in about 2/3 of the cuts I counted with the help of either my mum or my partner. They contribute less time as preparation and clean up is done by myself, so let me say they spent about 10′ (~60 hours of their time in 10 years). Let me value their time as 3 times as expensive as mine (this way I am conservative in the business case comparison). This would be an extra cost of 215€ (no matter that it never implied a cash outflow… thanks!).

The price of the electricity of the couple of light bulbs and the clipper used when cutting hair at home (when at the barber’s it is included in the price) is almost negligible (at ~0.1kW/h). I started the calculations, but they amount to less than 1€. The water used in cleaning up is also quite cheap (at about 0.0013€/liter). Assuming each time I used 10 liters in cleaning up (maximum), this makes another ~1.7€.

Finally, I am not including in the calculation the cost of transportation to the barber shop and environmentally aspects of that transportation. We could think that in the 70′ free time that I am given due to cutting it at home I can engage in an equally transport-intensive activity with the same environmentally unfriendly consequences.

If we add up all the savings and costs… -20€ (clipper) +1,210€ (cut price) + 750€ (my time) -215€ (family time) -1€ (electricity) -1.7€ (water) = ~1,722€. After 10 years, the cumulative positive cash flow of that tiny 20€ investment back in 2001 is over 1,700 euros. Ah, and it never required any maintenance.

Do you still want to go to the barber shop?


Filed under Investing