When Is The Payback Period Worth It?

Say you have a leaky faucet.  You replace the washers and do all the standard stuff that normally fixes leaks, but this one doesn’t go away.

You measure the leak as costing $0.10 per day in wasted water.  You check around and estimate (and for the sake of this post, say the estimate is fact) the cost to fix this is $100

That means, barring any increase in water rates, you would have 1,000 days, or roughly three years, before this repair would pay for itself.This is the concept known as the payback period.

To put more succinctly, the payback period is the length of time required for an investment or expense to pay for itself in terms of cost savings.

A three year cost savings is kind of rough.  Something else could break.  You could decide to remodel and toss the old fixture anyways. On the other hand, it might be worth more to avoid hearing the constant drip, drip, drip every time you’re in the room.

What would you do in this particular situation?  Do you have any ‘thresholds’ when it comes to whether undertaking a repair is worth it or you just live with the somewhat working thing?

 

 

10 thoughts on “When Is The Payback Period Worth It?”

  1. I’d repair it. But that’s more about being eco friendly – I hate wasting water. Plus the sound of dripping drives me crazy.

  2. In addition to the financial threshold, you have to consider the annoyance factor. Is it going to drive you crazy every time you look at the faucet or hear that dripping sound? For $100, I’d probably just swap in a whole new faucet and be happy.

    • It annoys me when I walk in and see it dripping (my wife often forgets to adjust it and I’m sure I do every now and then as well) so that definitely is pushing me to possibly replace it.

  3. But if I wait 50 days and then repair it, cost as gone up to $105. I guess that’s my thing- if I am going to have to replace it anyway, why not do it now and get it done?
    The only time I wouldn’t replace something like that right away was if there was a plan (with timelines) in place that had me knowing that it was going to be fixed in x amount of time anyway, and there’s no point doing something now that I’m going to be undoing.
    I really think, though, that $100 doesn’t hit my threshold for thinking of this. I think under $250, it’s just not worth the annoyance.

    • It’s probably a few pennies a day, if that, so in reality it might take years to pay back. Always stuff to consider…

  4. Most of the time I choose to repair it, because at the end of the day I enjoy having everything work in the house even if the payback period is unreasonably long.

    • That has a lot to do with it, and it goes back to the ‘Broken Windows’ theory. If you let something little slip, you’ll be more apt to let bigger things slip down the road

  5. Over the last year, my mom’s water bill went down by 1/3. I always thought that she used more water than us because she had a garden. Well, come to find out, we just renovated her two bathrooms. Between a leaky toilet and a hole in one of the steam pipes in floor, she was losing way more water than we thought.

    I think the sooner the better on those things. We have this thing in town where if you don’t have a water meter in your house, you get a $110/quarter water bill, but it was about $600 to install the water meter. Well, it took about 7 years before we did it and now our bills are $20-$30…and I’m like, why did I pay out all that money for all those years instead of doing it immediately? It was just a time thing for us, but I still kick myself for not doing it sooner.

    • That’s crazy. I’d actually be happy with a $110/quarter bill, though, LOL. Our water rates are pretty high in our city as we have a lot of hills and such which I guess makes it more costly to deliver water.

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