The answer is:  it depends.

What is a Home Warranty?

First, let’s discuss what a home warranty is.  Simply put, it’s an insurance policy on your home, designed to compensate you if something breaks and needs fixing.  You pay an annual premium, and, if needed, a repair person comes to fix the problem, leaving you to pay only a small service call fee – usually less than $100.  Sounds great, doesn’t it?

Home Warranty Cost vs. Benefits

But what are you really getting for your trouble?  A typical home warranty will cost you $250-$600 per year.  If something expensive breaks in your home, and you have to pay only a few dollars to fix it because of your home warranty, it’s a great deal.  But it’s important to review the warranty contract to find out what types of repairs are and are not covered.  A common complaint of homeowners is that they had to fight with the warranty company to convince them a repair was necessary.  They may also have had to argue that the fix of a broken heater, air conditioner, plumbing, etc., was, in fact, covered under the warranty contract.  Like any insurance company, a home warranty company will take a strict interpretation of the contract and will try hard to avoid any claim they deem unnecessary.  Beware contracts that are loaded with contradictions and exclusions, and know that most will refuse to cover “pre-existing” conditions in older homes.

Choosing Your Repairman

Another common complaint about home warranties involves getting service when you have a problem.  When you use a home warranty company, you don’t get to choose who comes to your house to make a repair.  Instead, the warranty company contracts with local vendors, and will select the one to come take care of your problem.  Home warranty companies may delay sending a repair person, and that repair person may claim that a repair is in order, even though you think replacement of the problem appliance is a better idea.

Choosing a Home Warranty

To determine whether a home warranty is right for you, consider the likelihood that you’ll need major repairs.  If your home is newly constructed, the odds are that you’re not going to have any big-time repairs for a few years to come.  By contrast, if you’re buying an older home, the chance of costly repairs is much higher.  If your home and its major appliances are pushing the ten-year mark, significant repairs are more likely, and more costly.  But also consider the maximum cost of repairs if something goes wrong with them – in other words, how much will it cost to replace your major appliances?  If your combined home warranty premium and deductible isn’t much less than the cost of replacing an appliance with something brand new, there’s little reason to bother.

Like any insurance policy, buying a home warranty is a bit of a crap shoot, because there’s always the risk that it won’t help if you need it, or you’ll pay for coverage you won’t need at all.  Even the best home warranties won’t reduce your repair costs to zero should you need something.  Consider your true liability and place your bet.

Do It On Your Own. While getting out of debt faster is always a good idea, you don’t have to pay your lender for the right to do this.  You can add a few extra dollars to each mortgage payment, or send in an extra mortgage payment every year, and accomplish the same thing without the setup and monthly processing fee.  Check out our free debt calculator to see just how much you can save on your debts by prepaying. Just make sure that the bank is applying those extra payments correctly (you want it to go to principal, not interest), that they won’t charge you a processing fee for extra payments you make during the year, and that there isn’t a prepayment penalty on your loan.  The good news is that most fixed-rate mortgage loans don’t have prepayment penalties.  Adjustable-rate loans (ARMs), however, have them more often.  And one other caveat:  An additional principal payment on your mortgage does not reduce next month’s payment, so you will still need to stick to the payment schedule.

Does it Make Sense? You should also consider whether putting the extra money to your mortgage makes economic sense.  Even a small amount of additional principal can reduce your total interest cost by hundreds, even thousands, of dollars over the life of your mortgage.  That’s great, but could the money be better used elsewhere?

If your overall goal is to get out of debt entirely, you’re probably better off to first attack high-interest debt, such as credit cards or an auto loan.  It doesn’t make sense to put an extra $50 or $100 toward a six percent mortgage loan if you’re carrying plastic with interest rates in the double digits.  Remember also that home mortgage interest is tax-deductible, whereas credit card or auto loan interest is not.

But once you’ve paid off those credit cards, don’t max them out again.  If you’re doing that, you should be worrying less about prepaying your mortgage and more about controlling your spending habits.

If you don’t have other debt, consider putting the money in savings.  Yes, it’s true that you probably won’t – at least in the current economic environment – earn a return higher than the interest you’re paying on the mortgage.  If you don’t currently have any type of rainy day fund, however, this is a better idea than paying off the mortgage early – after all, an emergency you can’t afford might lead you back to the credit cards, and your next month’s mortgage payment will still be there waiting for you, no matter what you’ve prepaid.

So, in most cases, a mortgage prepayment plan is really just a marketing gimmick to get more money from you. The only advantage is that it will force you into the prepayment schedule, which might be good if you lack the discipline to do it yourself.  But that’s some expensive discipline.

It was in 4 boxes, each one being a little heavier than the last. When we opened the box, what I saw was a whole lot of metal. It was thick, heavy, bulky, and the keyboard made a really loud clicking sound every time a button was pushed. I can still feel the crisp, clickety sensation of that old IBM model M keyboard.

Things have changed

Things are much different now. A computer less than a half inch thick can do many times the amount of work in a fraction of the time. Computer prices continue to fall and, according to analysts, it is only a matter of time before we see computers priced at less than $100.

Like all purchases, we are always looking to get the most for our money. If you’re in the market for a new computer, you know that there are a multitude of options, brands, and styles. How do you find what’s right for you?

Choosing the right computer

First, have no fear. It is a little known fact that many computer companies outsource the parts. Often the raw materials that are used to make it run are from the same company regardless of the brand that you buy. That’s good news because you can feel good about the fact that if you stay with a brand name computer, it is probably going to do just fine so don’t get too caught up in which of the brand names to choose.

Like all electronics, the fastest and biggest doesn’t always equal value. Unless you are doing specialized work, somewhere in the middle of the bells and whistles spectrum is going to work well for you.

Specialized needs are something different. If you are a graphic designer, architect, engineer, or have another profession that relies on large scale software, you should talk to somebody in your industry but you will most likely need a higher powered computer.

“It was so last year” is ok for the average user. Don’t pay for the latest and greatest technology. Often software is not written for the newest, most advanced computers so don’t waste your money. Let the price come down before buying. Also take a look at discontinued models for even more savings.

Don’t buy a bunch of accessories you’re not sure you need right away. You may find a printer on sale right now, but your child may end up using the computer lab exclusively for printing, and in these tight times, none of us need to be spending money on things that end up not being used.

Impulse buying is alive and well with computers. Designer laptop bags, and top of the line software can be purchased later, after you know for sure that you’re child will need it. In fact, there are free alternatives to most software in nearly every genre, you just have to know where to look.

Like anything else. Do your research. Look at consumer reports, size up the deals, and go try out the different models.

Still, I can normally get my hands on a pair of tickets a couple of times per year but there’s one thing I’ve noticed about baseball games and really, all sporting events I have attended: They cost a lot of money. Not only are the tickets expensive, but everything else is too.

Maybe you’re not looking to be rich but I bet you’re looking to either become or remain financially secure. In order to do that, you have to learn to be a cheapskate. I’m not saying that you should lie, cheat, or steal. Far from it, but what I do want you to do is not overspend. With that in mind, here are a few ideas to save money at the ballpark this year.

Take your own food

Go to the grocery store and get a bag of peanuts and throw them in your purse or pocket. If you know that they don’t check bags at the park, have your wife take a big purse and throw some soft drinks and water in there. Maybe a few packs of candy. Snack on what you brought and if you want to get that ballpark feeling, pick up something at the concessions. You can still feel good that you saved a lot of money. The 50 cent can of coke sure does beat the $3 coke, half of which is ice.

Eat before you arrive

Go out for a nice dinner before the game. Just like at a grocery store, an empty stomach will mean big dollars spent at the concession stand. That little pizza at the park isn’t much less expensive than the giant pizza that you can get elsewhere.

Don’t buy tickets online

Sometimes you can but places like Ticketmaster will charge you the full ticket price plus a convenience fee and a delivery charge. Things seem much less convenient when you’re shelling out $10 in fees on a $30 ticket. Many people work at their jobs for $10 per hour so why are those same people upset about standing in a line at the stadium to buy a ticket? Save the $10 and stand in line for 15 minutes. (Use that money for the $5 pretzel that gives you that ballpark experience)

No official hats and shirts

$20 for a hat? No reason to buy at the stadium when you could wait until the end of the season when things are half off or more. You may not look like a die-hard fan for this year but if you buy your hats and shirts at the end of this season, you’ll have everything you need for next year.

Don’t like being a penny pincher at the game? Take a little bit of time and add up how much money you’ll save by using these for ideas. It won’t take long before you see the dollars add up fast. Being a penny pincher won’t look nearly as bad once the calculations are done.

It’s as easy as asking the right questions

It’s so simple, most people don’t even think about it. Next time you’re out shopping for something, try asking if you can get it for less. What you’re shopping for really determines how you ask, so let me give you an example so simple I almost forgot to do it myself.

I was at Best Buy yesterday to pick up a pair of headphones to replace my 5-year-old ear buds that I just couldn’t bring myself to scrap, that is until they completely died. I listen to music when I run, and I run everyday, so to me, headphones are essential. I swung by Best Buy to see if they had the particular model I was looking for and they did…for $35 more than I saw them online earlier in the day. As I stood there pondering whether or not to spend a relatively large chunk of change on these brand new wireless Bluetooth headphones, with the Best Buy associate standing over my shoulder like some evil version of myself trying to convince me to do it, it suddenly dawned on me that I could just ask if they’d match the price online. I asked and the associate said “yes”. Great, $35 saved and all I had to do was ask for it.

Just ask for the discount

While my example may seem brain-dead simple, a lot of people don’t even try it, and there’s some serious money to be saved. Alternatively, you may be able to find savings even if the merchant doesn’t have a price-matching policy in place just by making an offer. You’re likely to have more success with this strategy at smaller retailers because it’s more likely that someone with some real authority is in the building at that moment. Next time you’re about to buy something, stop, tell the nearest employee that you want to purchase this [insert item here], but you think it’s a bit over what you’re looking to spend. Then ask him or her who you could speak with about working out a small discount.

It can’t hurt to try, and it may save you some cash. I’ve personally saved well over $500 in the past 6 months just by asking. Take charge of your finances and start negotiating…merchants need the sales and you need the merchandise…it’s a win-win.