Putting Financial Theories to the Test

I’ve written a lot of personal finance blogs overs the years that I have been doing this. I often recommend different strategies for financial gain, and most of the time these are practices that I live by. Sometimes I can only speak about things theoretically as they rely on specific circumstances to test. When these things do come up, however, I am often reassured that the financial theories I have been putting into place are succeeding. Here’s one example of how I’ve put my money where my mouth is – and came out on top.

Extended Warranty

While I haven’t specifically written about it myself, Canadian Finance blog has repeatedly advised consumers to avoid the extended warranty option when purchasing a large electronic device.   So this last Christmas when I purchased a large screen Plasma TV, I opted not to purchase the extended warranty. There were two main reasons why I chose not to invest in the extended warranty. First, I didn’t think that my TV would break. Consumer Reports recommends passing on the extended warranty because of the often limited window of coverage and the relatively low chance that your device will break during that window. They also report that Plasma TVs (the type of TV that I purchased) has a less than 3% chance of breaking during the first 3 years, and most of those that did broke during the manufacture’s warranty.

The second reason I didn’t purchase it was because I felt covered by the additional protection purchasing using my credit card provided. Using my credit card will double the manufacturer warranty on most products, so even if my TV did break I would be covered for the first two years. The extended warranty, at that point, just didn’t see worth it. And besides, what are the chances my TV would be one that broke?

Using the Warranty

Well my TV did break. I turned it on one day, started watching TV, and then my TV shut itself off, never to turn back on. I called Samsung, and I was transferred around a few times, before being told that they could do nothing without the receipt to confirm the date and time that my TV broke. I knew it was still under warranty as I had purchased it on Boxing Day last year, so almost exactly 11 months ago. However, as I’m in the middle of moving, I could not find the receipt. No problem, I headed back to the location where my TV was purchased and got another copy of the receipt. Easy!

That being settled, I contacted Samsung again, and without a few hours they had someone at my home taking my TV apart. Luckily they had in stock the piece that had broken so they swapped it out and billed Samsung for the hassle. As the TV was still under warranty, I only had to spend a few days without my TV working before it got back up and running without having to spend a dime, and all without the Extended Warranty!

The real hassle, I’m sure, will be if it breaks again outside the manufacture’s warranty and I have to go through my credit card provider to get service covered, but that will have to be another blog post for another day – that hopefully never comes.

When has practicing personal finance advice benefitted you?

Written by Alan Schram

Alan Schram writes about personal finance and his encounters with it in his everyday life. Alan is recently married and is looking to save money on expenses and reduce his debts.

3 Responses to Putting Financial Theories to the Test

  1. Glenn Cooke says:

    One time, ONE TIME I bought an extended warranty on a TV. This was like 20 years ago and I knew better, but they claimed I got all my money back at the end of the warranty period.

    Except a week after I bought the TV, the chain went out of business, and it turns out it was the chain that held the warranty. Money, poof!

  2. Mandy @ MoneyMasterMom says:

    If you’re willing to stop and pick up a quarter on the ground you should be willing to clip coupons for products you regularly use.
    Clipping coupons for stuff I usually buy saves lots of money. I use at least $5.00 in coupons every week. That’s $260 a year.
    I rarely clip coupons for products I don’t use. In my opinion it’s only a deal if you need it.

  3. Derek @ Freeat33 says:

    We’ve been paying ourselves first since we got married. We increased the amount on a regular basis. Using this strategy we paid off our mortgage when we were 28 years old.

Leave a reply

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Name: Email: