“14+ money saving computer user ideas” has some useful advice for saving money on technology. I am proud to say that I have recently done a few of things on the list, including 1) ditching our local phone line (although we got cell phones rather than VOIP) and 4) building a MythTV box. I was most impressed by how I resisted buying new hardware for my MythTV box as well. I was originally going to buy a new 250GB hard drive so I would have 120 hours of recording time. Instead I opted to stick with an old 10GB hard drive with only 6-7GB free (so 3 hours of recording time). Somehow I resisted spending that extra money on a bigger hard drive. Initially I thought that my MythTV box hadn’t saved me any money as the TV tuner card I bought cost $175. But when our main DVD player had to be given back to a friend I realized that the MythTV box could be used as a DVD player as well, rather than buying a brand new system. I hooked up a DVD-ROM drive I had laying around and so that saved some money. I also recently 11) bought an eBook rather than print. I paid about half the price (when you include shipping for the book) and only printed the chapters I needed using a laser printer fueled by dirt cheap toner refills from eBay. One thing I have not done is backed up my data recently! As mentioned in 14), you never know when something might happen.
I just got back from The Source by Circuit City (aka Radio Shack Canada) and had to share this story. I bought a simple 20′ stereo extension cable for $19.99. I couldn’t believe my ears when the clerk asked me if I wanted to buy an extended warranty for the cable! He said that for something like $2 I could get an extended warranty and that should anything happen to the cable over the next 3 years I could get a replacement. The day they start selling extended warranties for cables is the day that extended warranties are exposed for being the scams that they are. I should have left the store right then but the whole reason I went there is because it is within walking distance from where I lived and I didn’t feel like shopping around, even though $20 was expensive for this cable. One of the reasons I went to The Source is because I don’t like to shop at Future Shop (because I hate their commission sales people and their rebates and extended warranty rackets). It looks like everyone (not just Future Shop) is selling extended warranties these days, to squeeze out every last penny they can. I bought a Palm device for my wife this Christmas at Staples (specifically to avoid Future Shop) and was propositioned with an extended warranty there as well.
I have never bought and extended warranty and never will. It only takes a little bit of common sense to realize that extended warranties are never a good idea. This CBC Marketplace article, “Extended Warranties: Deal or Dud?” examines extended warranties in detail. The final conclusion is pretty unanimous:
As a general rule, extended warranties aren’t considered a good investment. Consumer Reports, the Better Business Bureau, Canadian consumer organizations, and the Federal Trade Commission as well as the chartered accountant we spoke with, all caution consumers against purchasing extended warranties.
The nail in the coffin for me was this data:
Consumer Reports says only 12 – 20 per cent of the money paid for extended warranties is ever used to pay for repairs or claims. The other 80 to 88 per cent of money goes into the profit margin of the third-party/manufacturer.
And some final useful advice,
Our expert, Tod Marks, advises people thinking about an extended warranty to save the money and put it into a repair fund — just in case. “An extended warranty is good for the retailer. It’s not good for the consumer.”
This is the time of year when everyone is setting their goals for 2006, and I am no exception. 2006 will be a year with a lot of change for us, completing the switchover to a new bank, a switch to a new full-service broker, and our first year filling out our tax return as a married couple. It’s also a year where I expect the value of our RRSPs to grow 69% from contributions alone, to make a small dent in our line of credit while still saving up for the things we want, like vacations.
- Contribute to our maximum allowable RRSP room (18% of income in 2005) by the end of 2006.
- Transfer my RRSP from TD Canada Trust to Clearsight in February.
- Invest in value-oriented investments or ETFs at lowest cost wherever possible.
- Be invested in 25% fixed income and 75% equities by the end of 2006.
- Personal finance-related:
- Switch all our automatic deposits and withdrawals to PC Financial from BMO.
- Limit our daily expense for food, dining, gifts, gas, bus, entertainment, recreation, etc . . . to $300-400/week (this will be regulated by having a second chequing account linked to our bank cards which only contains that much per week).
- Contribute the rest to ING Direct Savings accounts for vacations and other “wants.”
- Try to get at least one salary raise this year.
- Get rid of AMEX Gold and carry only one credit card (BMO Mastercard). Don’t get any additional cards in 2006.
- Eliminate all credit card spending except for online purchases (only when necessary and which will be paid off immediately) and dental appointments (which I get reimbursed for later).
- Pay down federal student loan using our lower-rate student line of credit.
- Pay at least $700/month to student line of credit.
- Apply all of our tax refund to student line of credit.
- Try to publish at least one post daily.
Some of these goals are things that we’ve just started doing in 2005, but would like to continue doing in 2006. I have no doubt that we will achieve all of these goals, which is why I’ve called them goals and not “resolutions.”
Finally went and set up a PC Financial account last Sunday. This involved finding the nearest Great Canadian Superstore (equivalent of Loblaws/Zehrs for those of you in Ontario) which isn’t so nearby to where we are. It was all pretty painless. We did it on a Sunday at 5:30pm and the lady who helped us out was really nice, and even stayed a bit after their closing time of 6pm to help finish everything up. I really like the fact that they are open on weekends at all the locations in the Vancouver area that I looked at. They are also open late on Thursday and Friday night. I don’t expect to go into the PC Financial “Pavilion” much, but at least the hours are a lot better than the big banks. We set up two no-fee chequing accounts (I’ll describe in a future post why I like 2 chequing accounts). This gives us unlimited Interac transactions, transfers, bill payments, direct deposits, and withdrawals at any CIBC or PC Financial ATM. We are getting free cheques mailed to us for both accounts. I’ve called the 1-866 number twice so far and both times the people I talked to were very friendly and I never waited more than 2 minutes to get through to someone. We don’t need the PC high-interest savings accounts because we use ING Direct (my wife and I can each have up to 4 Canadian dollar accounts at ING making it easy to save up for many different “things” at once) and we can shift money between our ING Direct accounts and either PC Financial chequing account as much as we want now. As soon as we get the new PC cheques in the mail, we just have to send them both off to ING and the chequing accounts will be linked to ING.
The only thing left for us to do is to switch our direct deposits and pre-authorized bill payments to PC from BMO. I’ll most likely arrange this to all happen around the same time, keeping at least some money in each of BMO and PC, just in case the timing is off a bit on the switch.
Just read a great article about being a Money NUT. Since I am a money nut myself, I agreed with a lot of what he said, including the part about financial blogs which I am have recently become more a part of:
I read financial related blogs. Over the past year, by both posting on my blog, and by continually reading all the other personal finance blogs, I’ve found that I am always reinforcing my values. Being a part of the PF blog community has given me the motivation to always make our net worth number go up and to follow the principles that most of us share. It’s like a support group without the circle of chairs.
He asks “Do you get the jokes about being ‘cheap’, or a ‘tightwad’?” I have definitely been called cheap before, but I don’t mind any more. Actually my dad and my dad’s dad are probably called “cheap” more than me so maybe it’s going to get worse with age. But they’ve also done better than anyone else I know at saving their money and building significantly large nest eggs without having ultra high-paying jobs and without sacrificing quality of life.