Personal Finance Advice

Should you buy an extended warranty? When you make any major purchase you’re usually offered an extended warranty.  In fact, you’ll probably find yourself offered an extended warranty on purchases that aren’t really considered major purchases.  Are you buying a car? You can be sure you will get offered an extended warranty for your car.  Are you buying electronics? If so, chances are that you will get offered an extended warranty by the salesperson.  The electronics you purchase don’t even have to be expensive or complicated; some people find that they are offered an extended warranty on inexpensive digital cameras, DVD players or even a home phone that doesn’t exceed a purchase price of $25.

Some stores automatically offer an extended warranty for any purchases that fall into the category of electronics or furniture.  For this reason, you shouldn’t expect to get an extended warranty offered to you if you’re buying a book or a picture frame, but if you buy a microwave you’ll get offered an extended warranty and if you buy a mattress you can surely expect the salesperson to try to talk you into some type of extended protection such as stain guard or something similar.  You need to know this so you can be prepared to make a decision whether or not to buy an extended warranty for the item you purchased.  After all, one big aspect of successfully maintaining your personal finances is being prepared to make financial decisions ahead of time so you can weigh all your options.

So should you buy an extended warranty for a purchase? Financial experts are torn over this question.  While some advise that extended warranties are a big waste of money, others make the claim that extended warranties can save you quite a bit of money in the long run while also providing you with peace of mind.  What is the right option for you?

A lot depends on a few different factors:

Cost of warranty versus cost of repair: It makes no sense to buy an extended warranty when the cost of the warranty exceeds the cost to repair the item you’re buying.  If, on the other hand, you’re buying something that costs quite a bit of money to repair and the warranty is reasonably priced then an extended warranty may make sense. 

The details of the warranty:  Don’t buy a warranty that has terms and conditions that will make it difficult for you to obtain repair services.  Additionally, check the original warranty provided by the manufacturer to make sure that you aren’t buying coverage that you already have.

Your comfort level:  Some people just feel better knowing that they are fully covered in case something needs to be repaired or replaced.  If buying an extended warranty gives you peace of mind then just be sure to get the best deal on the extended warranty as possible.  As a matter of fact, you may be able to talk the salesperson into giving you a free extended warranty as a negotiating tactic for buying the item.

There is no definitive, clear cut answer as to whether you should buy an extended warranty or not.  Weigh your options and figure out what is best for you, for your particular situation.

How do you prepare for a job interview? You probably pull together a nice outfit and do some research on the employer you will interview with.  If you are nervous then you might also take the time to have a friend run you through a mock interview so you can run through some potential questions that you might face during the interview.  Most people agree that it’s better to be prepared as well as you can before going in for an interview.  You want to appear competent, friendly, and relaxed.

There is one important step that many people don’t even think about when preparing for a job interview, and it’s a step that can make or break your chances of getting the job you want.  Review a copy of your credit report before you go into a job interview.

Why? Even if you aren’t applying for a job within the financial sector, there is a good chance that a potential employer will ask for your consent to review a copy of your credit report.  This may surprise you if you don’t see the connection between a clean credit record and the potential to be a good employee, but many employers are now making it routine practice to review an applicant’s credit report before extending an offer of employment.

It makes sense that some companies would insist upon a credit report review before hiring someone.  For example, a bank probably wouldn’t want to hire someone to work with cash all day if the person is severely in debt.  Another good example is a company where the employees have to be insured and bonded for their duties, such as a housecleaning service that sends employees directly into people’s homes.  It certainly isn’t as if a bad credit report makes you a criminal, but it may raise some eyebrows when reviewed by the people who want to hire you as a representative of a company.

For this reason, make it a routine to order a copy of your credit report and review it long before you set foot into a job interview.  You want to give yourself enough time to get any errors corrected before the report is seen by someone who has the power to offer you a job.  If there is not enough time to review your credit report far in advance of the interview, you should still take a look at the report so you know what your interviewer will see.  You will seem much more competent if you already know what is on your credit report and can explain any issues that may send up red flags for a potential employer.

In other words, it’s far better to have an explanation for negative items on your credit report instead of simply being completely unaware of what is contained within the report.  Even if you have an account that is currently in delinquent status, an explanation of “I ran into some financial bumps but now I’m working with my lender to negotiate a payment plan” will sound much better in a job interview as opposed to “I don’t even know what that is.  It must be wrong.”

If you do have things on your credit report that may look bad, bring them up before your interviewer asks if you know the interviewer will review your credit report.  You can say something along the lines of, “You will see this on my credit report, and this is why it is on there and what I’m doing about it.”  Don’t just ignore the fact that your interviewer is about to be faced with a very negative portrayal of the way you handle credit.

If you are like most parents who have teenagers nearing high school graduation you’re probably in a bit of a panic as you realize the true costs associated with paying for a college education.  If it isn’t tuition fees it’s books or transportation expenses.  If your teenager plans on going away to college and living in a dorm or apartment, the full costs associated with this living arrangement may be enough to make your head spin.

Perhaps you started saving for your child’s education while your child was merely an infant, or maybe you didn’t save a penny toward educational expenses until it became obvious that your child had a real interest in joining the ranks of college students.  Whatever your financial situation, there are some things you need to keep in mind.

Don’t pay for college to the detriment of your own personal finances.  As a parent, you undoubtedly want the best for your child.  It may seem completely logical to do whatever you can in order to pay for your child’s college education, even if that means cashing out a retirement fund or taking on a second mortgage to your home.  You need to stifle this urge.  You won’t be doing your college student any favors by paying for college while also wrecking your own personal financial situation.  

Keep your options open.  If paying for college will be a stretch, look into ways to make it not such a huge expense.  If your child attends a local college and stays home instead of going away to college, you may be able to save in housing costs.  You might also want to consider having your child first attend a junior college for the first year or two in order to save money on tuition. 

Encourage active contributions from your child.  Your teenager should help pay for college in one way or another, whether it’s by aggressively pursuing scholarships or working a part-time job.  You may find that teenagers take college a little more seriously when they have to contribute to paying the costs.

If you can’t pay for your child’s college education then you need to be open and honest about the situation.  Don’t assure your child that college expenses will be paid when you can’t really be sure whether that’s a true statement or not.  If there is little more than a slim chance that you can cover college expenses then tell this to your teenager as soon as possible so he or she will have ample time to figure out what needs to be done.  You never know; your child may surprise you by taking care of college expenses without your help.