Canadian Personal Finance Blog

As I mentioned last week we purchased a new camera last week and didn’t get the extended warranty.

This past Friday (6 days after purchasing the camera),  I read the Future Shop flyer and saw that the same camera is now selling for $50.00 less. I tend to read the Future Shop and Best Buy flyers because I am a techno-geek and like to window shop for things I can’t afford (and know I shouldn’t buy), and this time it paid off very nicely.

I went off to Best Buy, and was my normal polite self, I had my bill with me from the previous Saturday and spoke to the young lady at the Customer Service (sic) desk (I also brought a copy of the Future Shop Ad for the camera). The young lady was very polite as well and then checked and Best Buy was in fact carrying my Camera (Canon S5 IS) for $50.00 less also, and because of this my account was credited for $56.50 (after tax rebates and such).

Well worth the trip, even though I most likely spent $4.00 worth of petroleum to get my money, but money well retrieved. Most electronics stores, and I believe most big box stores (aka Wal-Mart) have this kind of purchase protection plan and it is important to make sure you are not being over-charged and you are taking advantage of later sales on products you have purchased.

I am thinking now, I should have raised a mild stink and asked for more than $50.00 back, because the sales person at Best Buy should have known this camera was going to be on sale in the next few days, but I didn’t think of it at the time.

Extended Warranty?!?

As I stood in line I saw another interesting piece of consumer sleuthing that I feel it is important to report on as well.

A young lady was in front of me, and she had her iPOD touch with her, and there was some issue with it not working correctly. The young lady had her original box, and her extended warranty (which we said she paid $70 for (I believe)), and the Customer Service rep was very polite and said she’d have a look at it.

The Customer Service rep then told her something that caused my ear hear to prick up. Evidently if the Best Buy Customer rep couldn’t repair or make the iPOD work successfully, the young lady (customer) would have to send it to Apple, because it is within a year of purchase and Apple does all repairs in the first year.

Let that sink in, the customer has purchased an extended warranty from Best Buy, however, Apple’s warranty covers the exact same repair in the first year (presumably the first year of the extended warranty as well).

Read that previous sentence again, and tell me you didn’t at least have a “WTF” moment.

What is the use of this “Extended Warranty” if Apple repairs this and not Best Buy? The Customer Service rep in fact said, the customer must send the iPOD back to Apple, because Apple will not accept the iPOD if it is sent in by Best Buy. Another “WTF” moment for me.

So the extended warranty you purchase overlaps with Apple’s, and is effectively redundant (i.e. useless).

I like that title, in fact that could be the entire post, I like that title that much, but I will elaborate on this provocative statement.

Today’s consumers (myself included) love of things and what money can purchase has turned into a full blown obsession with money and it’s trappings.

Are you seduced by spending? Ask yourself these question:

1. Does anyone really need to spend $8.00 on a cup of coffee? In my mind if the beans were picked my Marilyn Munro in the nude (and she delivered it to me in that same state), then I might think that coffee is worth the money I spent. Starbucks has seduced you to spend that money with it’s cache and marketing.
2. Can you hear the difference of $10,000.00 speakers for your stereo over a cheaper set of speakers? I can’t, but I am also fairly deaf from younger days in printing plants and rock concerts. If you feel it is really important and you can tell the difference, you have been seduced into hearing something that may well not be there (except for your dog).
3. Why would you pay $16,000.00 for a Toyota Corolla when you could pay $80,000 for a BMW or Mercedes Benz? Do you live in your car? For that price, in some places you could get part of a house for the Benz. If you think people will be impressed by the Mercedes name you have been seduced into thinking people care what car you drive (I might care if you drove me to work).

These are pretty crass examples of the seduction of spending that we all fall for (I am not portraying myself as being lily white in this, I have bought things that afterward I have asked, “Why did I do that?”), but this is one of the hardest things to control, the urge to spend money.

We can stop ourselves from walking up to an attractive member of the opposite sex and introducing ourselves, simply by rationalizing the embarassment we might feel and the fear of rejection in that situation, yet we can’t stop ourselves from spending money when we know we shouldn’t (and worse we know we can’t afford the thing we want to buy).

Should we all be taking Prozak or some other psychotropic drug to curb our spending urges? I don’t know, I don’t think they would stop us (they might make us so stoned that we might not do much of anything), so how can we stop ourselves?

No Credit Therefore No Buy

The idea I have is so simple but also very hard to do, for most of us, since we feel naked without a wallet full of credit.

If you go out with no credit cards and no money, you are going to be hard pressed to buy something, aren’t you? Yes, I know with instant credit it’s not impossible, but it will slow you down a fair amount. If you are going out to look at a high priced item or even just going “shopping” with friends, don’t take your credit cards, and maybe bring enough cash to buy a coffee (not a $6.00 one either).

If you are someone who can control your impulses to spend, I applaud you, and strongly suggest you should write a book about it, I’d buy it on the spot (anyone see the dichotomy of me impulse buying a book that is to stop me from impulse buying).

Retiring Debt Plans

So what do you do when you retire a debt? I have heard a bunch of folks make the following interesting remarks when they have retired a major debt (car loan, credit card debt, student loan, or mortgage):

• “Now I can afford to go on vacation”
• “We can order those new drapes for the living room”
• “We can afford to buy a new car”

All of these statements have the common theme of putting yourself BACK into debt after climbing out of a debt hole. To quote a well known philosopher, “ARE YOU OUT OF YOUR MIND!!!!” . If you have worked hard enough to retire a debt, celebrate that, but don’t use it as an excuse to tie yourself back up in debt! Adding debt load is not your goal, and shuffling debt load shouldn’t be either.

Figure out what you can do with the extra money to save, or try to retire another debt (after you have had a modest celebration of retiring this debt). Seems obvious to me, but then again, maybe I have done the same?

Buy, Buy, Buy!!!

Seems spending has recovered in the Retail area, as we can see from this graph.

The increases in Ontario (+2.0%) and Quebec (+0.6%) accounted for almost the entire advance in retail sales, with the automotive sector mainly responsible for this increase. The increase in August in Ontario almost totally offset the decline in July, which followed the strongest quarterly growth since the first quarter of 2002. In Quebec, growth in retail sales cancelled out most of the decline in July, which followed the strongest quarterly growth since the second quarter of 2001.

So spending on Cars in Ontario and Quebec are helping things along? I guess this is good, but what will these numbers reflect in the next few months with the sudden explosion of cross border shopping? My bet is a steep drop.