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would it be a better use of my cash to save it to buy the crafted items I need rather than try to work up the skills? Is there really a functional part of the game found in crafting or is it a time sink for the most part?
I didn't really craft myself, but I would gather mats from one area then sell them on the auction. I had a few friends if I gathered the mats they would make for free.
I can't answer if crafting is a time sink. I just would rather enjoy questing and fighting and harvest a node here and there on the way to the quest.
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Depending on which crafting skills you have, you can make some nice armor/weapons/jewellery from the crafting guilds. You can also make second and third age legendary items.
Some of the player crafted items are better that a lot of the items that drop from mobs. Also, some of the items can be sold for a big profit.
You can also harvest materials and sell them on the AH for people that either can't collect them or don't want to.
Crafting is certainly worth having in LOTRO. I'd recommend making an alternate character to cover just about every profession yourself. This will make it easier for you to make sure you have all the components you need to make whatever you want. The equipment made through crafting is easily equal, if not better, then most items you can find throughout the course of your adventures. Except once you reach the level cap. Then it falls a bit, but still is useful.
If you are playing your first character through the game, I would certainly recommend gathering your own resources instead of buying them. It can get very expensive if you try leveling your crafting only through auction house purchases. It may be more time consuming gathering them yourself, but it will save you a TON of cash. Also, I often recommend for the very first character that you start out as an Explorer profession. Gather all the ore and wood you can and sell it on the auction house, while working on the tailor side with hides. This will get you one crafting profession mastered from the start, but also get you an immediate source of income from the Ore and Wood sales.
Stick it out and get those Crafting skills mastered and your future alternate characters will have a much easier time of things.