The Advantage Advisor

Should you buy an extended warranty?

You can buy an extended warranty for just about any product out there these days. It doesn’t matter if it’s a car, satellite radio or toys.

But when do you really need an extended warranty and when is it just throwing away good money?
In general, most experts seem to agree that an extended warranty is not necessary for a majority of products we buy. An article in Parade magazine stated, “Americans spend approximately $9 billion on warranties every year … Yet specialists estimate that for every 100 warranties sold on electronics and appliances, only 15 people ever file a claim.”

Take the following into account if you’re debating purchasing a warranty:

Does the existing manufacturer’s warranty offer any protection you may need?

What are the terms and conditions of the extended warranty? Be sure you understand exactly what repairs or replacements the warranty covers.

How much does the item you are buying cost compared to the cost of the warranty? It’s not worth it to purchase a $30 extended warranty for an item that only costs $50 to buy brand new.

What would it cost to repair the item you are purchasing? It could be cheaper just to have your purchase repaired.

MSN financial columnist Liz Pulliam Weston does advocate purchasing an extended warranty for one purchase: a plasma television. According to Weston, this is a case where it could cost thousands, sometimes almost as much as a new TV, to fix or replace your television if the screen dies.

According to the Parade article, you usually don’t have to purchase an extended warranty at the time of your purchase. Most places offer you 30 days to buy the extended warranty. If you’re not sure, take some time to think about it.

Dear Debt Monkey

Q: What should I do with my economic stimulus check?

A: This year brings an extra little bonus for most of us, and many are struggling over whether to spend the tax rebate or use it for more practical causes.

The easy answer is that you should use it toward paying down any high interest debts that you have.
The next best idea is to put it into an emergency savings account. However, couples across the country are finding that while one is going for the frugal approach, another is dying to escape their rigorous work schedule and go away on vacation. In order to keep the domestic peace, it may be necessary to compromise. Putting some of the cash towards debt or savings and using the rest for a small inexpensive trip may be a way to keep everyone happy.

Keep in mind that whatever you decide to do, you are helping to stimulate the economy in some way.
For more information contact: (888) 511-2227

Did you know?

If you’re like many people, you probably receive many credit card offers in the mail each week.
You can opt out of those unsolicited credit offers. Simply call (888) 567-8688 or go online at www.optoutprescreen.com.

You will be instructed to provide some information and notified that your unsolicited credit card offers should be reduced, though the process may not completely eliminate unsolicited offers.

Please note that each person in your household must complete this process on his or her own behalf. Simply providing your home address does not mean each person in your home will stop receiving unwanted offers.

A guide to keeping your financial records

Most everything in our lives has some kind of document attached to it. There are bank statements, bills, paycheck stubs, income tax records, loan documents and receipts. You could end up in a sea of paperwork. There are some things you should keep forever and some things that can be safely tossed after a certain amount of time. So what should you keep and how long should you keep it?

Keep for 1 month:

• ATM Printouts/Receipts

Keep for 1 year:

• Paycheck stubs
• Utility Bills
• Bank Statements
• Credit Card Statements
• Quarterly Investment Statements

Keep for 3 years:

• Income Tax
• Medical Bills and Canceled Insurance Policies
• Records of Selling a House
  
• Records of Selling a Stock
• Receipts, Canceled Checks and other Documents that Support Income or a Deduction on your Tax Return
• Annual Investment Statement

Keep for 7 years:

• Records of Satisfied Loans

Keep while active:

• Contracts
  
• Insurance Documents
• Stock Certificates and Stock Records
• Property Records
• Records of Pensions and Retirement Plans
• Property Tax Records
• Disputed Bills
• Home Improvement Records
• Keep until the warranty expires or item can no longer be returned or exchanged:
• Sales Receipts

Keep Forever:

• Marriage Licenses
• Birth Certificates and Adoption Papers
• Wills and Death Certificates
• Records of Paid Mortgages
• Bankruptcy Papers
• Divorce Papers
• Military Discharge Papers
• Military Medical Records

For ideas on how to organize your important papers, see “The Advantage Challenge.” Also consider that you might want to keep documents like birth certificates and mortgage records in a fire proof box.
If you don’t want to keep a paper file, one option is to scan the documents into your computer. Just make sure you save the files on a disk or cd, not only on your hard drive.

When discarding documents, it’s best to shred them. Shredding documents greatly reduces your chances of becoming a victim of identify theft.

If you’ve already thrown something away that you now realize you need, don’t worry, most documents can be recreated. You can get copies of birth certificates and death certificates. Banks and credit card companies are required to keep a copy of your statements for seven years. However, recreating documents can be expensive. Most financial institutions charge for copies.

Resources

Federal Trade Commission can help with numerous consumer complaints and concerns. You can find the FTC online at www.ftc.gov or call the following numbers for:
Complaints: (877) 382-4357
Identity theft: (877) 438-4338
Other calls: (202) 326-2222

The Advantage Challenge

ACCS is challenging you to ...

Organize your financial papers.

Gather all of your important papers including outstanding bills, paid bills, bank statements, insurance papers and medical bills.

If you don’t have a filing cabinet, you can get a plastic filing case, or just clearly label boxes and store them in an organized fashion.

Consider separating outstanding bills from items you’ve already paid.
An important part of sticking to a monthly budget and paying down your debt is good organization. Being organized will keep you from incurring late fees because you misplaced a bill.

If you need help with budgeting, call Advantage CCS to schedule a credit counseling session.

<- Back to newsletters