Hedging My Bets Doing The Math

“In the good old days” of the previous century and longer ago than I will admit to, you could purchase electric appliances – toaster oven, refrigerator, calculator, washer and dryer, even gas furnaces and they would last 20 years and much more. My mother once had a refrigerator that just wouldn’t die. It was 45 years old and still working when she sold her home and bought another. My upright freezer is still going perfectly strong and it’s about 35 years old.

Unfortunately, that’s not the case with today’s new and “improved” products. It seems that all of them are preprogrammed to self-destruct or become obsolete in a much shorter period of time. If you read the “warranties” on various items it’s likely you might also buy a separate insurance policy for it as well. You would spend a lot of money over the years paying for these policies, especially if every major appliance is covered.

My family tends not to purchase the insurance, although we have occasionally purchased items that should have come packaged with pictures of big lemons. We basically get our money’s worth on purchases without the extra insurance. It’s a gambler’s risk. And this is where I gamble. Mostly, however, I win.

My philosophy on purchasing anything for our home, especially any item with a large ticket, is never to pay full price. If you search, it is on sale somewhere, or it will be if you can wait. Our busy lives make it painful to spend time searching for the best item at the best price. It’s a penny pincher’s life.

We normally also duck delivery costs by imposing on a busy relative or friend with a truck if we can’t haul it home ourselves. Since we will repay favors when they are in need, we just have to coordinate everyone’s time to get it done.

Calculate your savings on the sale price, delivery cost and insurance. If you are financially able, establish a separate bank account and save what you would have spent. Then add to this account the additional cost of insurance over the term that the policy will cover. The total of these amounts (for all your purchases) plus a little interest can be surprising.

If your refrigerator or other item doesn’t quite live to an expected self-destruct date, you still have the money you put away to help get something you want. It’s also possible that you might not use or need it until you want something new. In any event, you are in control of your cash. That’s the important factor here.

Always read the warranty information, get full information on the price of the policy and what it covers, consider the alternatives and what ifs. Do the math and make informed decisions about how you will spend your money – or not.