Is it worth buying an extended warranty on electronics?
Best Buy keeps pushing their extended warranties every time I buy something. A 3-year warranty on a $300 item costs $60. That seems like a lot. Do electronics really break that often? My friend says extended warranties are a scam and the store profit margin on them is huge. But what if my TV dies after 13 months?
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Make a budget and actually stick to it. Boring advice, I know, but it works. The envelope method helped my family — cash in labeled envelopes for groceries, gas, fun money. When the envelope is empty, you're done spending in that category.
5 Answers
Make a budget and actually stick to it. Boring advice, I know, but it works. The envelope method helped my family — cash in labeled envelopes for groceries, gas, fun money. When the envelope is empty, you're done spending in that category.
If your employer offers a 401k match, contribute at LEAST enough to get the full match. That's free money — like a 100% instant return. Skipping the match is leaving thousands of dollars on the table every single year. Do that before anything else.
Be very skeptical of anything that promises high returns with no risk. If it sounds too good to be true, it is. The dot-com bust should have taught everyone that lesson. Slow and boring index funds beat hot stock tips over the long run.
Talk to a fee-only financial advisor, not one who earns commissions on products they sell you. The commission-based advisors have an incentive to recommend products that benefit them, not you. A fee-only advisor charges a flat rate.
My parents told me the same thing and they were right. But everyone's situation is different. Run the numbers for your specific situation before making a decision. There are good calculators online that account for all the variables.
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