A good way of looking at making a logo is to map out the key points:
1) The design has to be clear and concise (if there are words, it must be readable, if it's an animal you have to know what animal it is)
2) It has to reflect your brand correctly (such as gaming channels using controllers or minecraft styled characters)
3) It has to be memorable and eye catching (a very dark picture with muted colours isn't going to catch someone's eye)
I commissioned a friend to draw my avatar (the one you see now) and I love it; she captured my likeness really well and incorporated my favourite colours, too!
If you've got some design experience and can whip something up that you're happy with and you feel promotes your brand in a way you want - go for it! A lot of people started out by making the best of what little they had to work with, so there's no shame if you can't afford to pay for certain services right now.
It's only worth paying if you need something you're unable to get done for free. We had a couple homemade logos but I wanted something more iconic and clean, and I found a commercial artist whose work I really liked, so I hired him.
I paid my buddy who owns a graphic design side business because I want to help support him. Granted he charged me way less than he charges his normal clients so I threw in a case of beer as well. Going to outside folks can get pricey quick, but you can get high quality stuff. All depends on what you want to do or are willing to do.