What you need to know about Warranties

What You Need to Know About Warranties
Before you sign up for extended coverage, make sure you're getting the protection you pay for.
By Pat Mertz Esswein, Kiplinger.com

1. Retailers love them. In fact, retailers may reap more profit from warranty contracts on appliances and major electronics than they do on the products themselves (that's why sales-people are coached to urge you to buy the extra coverage). Typically, you'll pay 10% to 20% more for an item to extend a one-year manufacturer's warranty through the fifth year of ownership, according to the Service Contract Industry Council. Most retailers hand off the contract to a third-party administrator in exchange for up to half of what you paid.

2. Odds are you won't need it. Celia Kuperszmid Lehrman, of Consumer Reports, says that most major appliances do not break down within the extended-warranty period (among the exceptions are refrigerators with icemakers, electric wall ovens and dishwashers). When they do, she adds, the cost of repair roughly equals the cost of the extended warranty.

3. You may already be covered. American Express cards extend the length of the manufacturer's warranty by up to one year, and Visa Signature and most MasterCard credit cards will double it. Costco extends manufacturers' warranties on TVs, projectors and computers to two years from the date of purchase. Plus, the manufacturer may provide a free or discounted fix for a defect that doesn't reach the level of a product recall.

4. Service? What service? Timothy Meenan, executive director of the SCIC, says that with an extended warranty, you step to the front of the line. But Steve Sheinkopf, of Yale Appliance and Lighting, in Boston, says he sells and services his own extended warranties because most third-party administrators do not respond quickly to customer complaints. William Purdy, a factory-authorized appliance repairman in Telluride, Colo., says he's found that administrators pay low and slow, and demand burdensome paperwork.

5. It's easy to check the provider's track record. If you're considering an extended warranty, ask upfront who will provide service and vet the provider online, using a source such as Angie's List. Read the contract and look for deductibles, limits to the number of covered service calls, exclusions to coverage and triggers for cancellation. (If the appliance can't be fixed after a reasonable number of attempts, will it be replaced?) Then check the record of the administrator with your state's department of insurance and the Better Business Bureau. For instance, Assurant, which administers extended warranties for manufacturers such as Whirlpool and KitchenAid, gets an A, the top rating. Warrantech, which sells the RepairMaster warranty through retail appliance dealers and online dealer AJ Madison, gets an F, largely due to lengthy delays in providing service.

6. You can cancel. If you bought an extended warranty, most states mandate a 30-day "free look" period (some contracts provide up to 90 days), during which you can cancel and receive a full refund. (To learn more, contact your state's consumer-protection department.) You may still cancel after that, but you'll receive a prorated refund, and the administrator may charge you a fee.

Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. http://www.kiplinger.com/.

Setting Attainable Goals

The Four Steps To Properly Setting Goals
From Ric Edelman's Inside Personal Finance

First, set a positive goal for yourself. "I will save to buy a home" is a positive goal, while "I will not spend money" is a negative goal. By focusing on the positive, you'll quit spending money because you'll be so focused on your goal that you won't notice you've stopped spending money.

Second, set a date for achieving your goal. A goal is not a goal until you set a date for it. So set a date for achieving your goal, and make sure your date is attainable. If it's not, you'll become discouraged and quit. But don't set a date so far away that achieving it is pointless. "I want to be debt free by the time I die" is a silly deadline, because you won't be able to enjoy the benefits of achieving that goal.

Third, write it down. Until you see your goal in front of you, it's not real. Tape your goal onto your bathroom mirror, your refrigerator door, your car's steering wheel, and your PC's monitor. Keep reminding yourself of your goal. One client of mine kept a picture of his dream house above his television. Another, who wanted to buy a Jaguar, bought a Matchbox version for five bucks and kept it in his pocket. His co-workers regularly saw him playing with it at his desk. (Today, he drives the real thing.)

And fourth, stay focused. Keep your goal in front of you. If your goal is to buy a home, tour model homes. Read House and Garden, Architectural Digest, and similar magazines. Design your own floor plan. By immersing yourself in your goal, you'll find it easy to stop spending money, because you won't regard it as "not spending." You'll regard it instead as "preparing to spend my money on something really special."

Focus on the benefits you'll derive by reaching your goal, not on the sacrifices you're enduring. If you can't perceive the benefits, you won't achieve your goal, and even if by some chance you do reach your goal, you won't sustain your victory.

Keep all this in mind as I show you the mechanics of getting out of debt, for if you simply follow the steps I outline for you, you won't do yourself any good. Oh sure, following my plan will get you out of debt – but it won't keep you out of debt. Only you can do that.

Set your goal, give yourself a deadline, write it down, and stay focused. You'll be amazed how far this will take you.

Tips for Preventing Water Damage

Tips for Preventing Water Damage

Each year one of the biggest homeowner property insurance claims is water damage – and this is not just in those areas of the country where flooding is common. Many times the water damage is actually caused by slow leaks from appliances and the house's plumbing that simply go unnoticed until it's too late. With this in mind, here are a few water maintenance tips that in the long run could save you thousands of dollars in repairs.

Study your water bill – One of the easiest ways to detect water leaks is to pay close attention to your water bill. Major fluctuations in water usage from one month to the next could mean that you have a problem.

Check your water pressure – Experts suggest testing your home's water pressure annually. This is easier than it sounds. Simply purchase a pressure gauge and attach it to the hose faucet. Normal results should range from 45 to 65 pounds per square inch (psi). A reading above 65 psi is considered high and could lead to problems down the line.

Inspect appliances– While much of your home's plumbing can be hidden behind walls and cabinets, most of your appliances that use water can be easily inspected for potential leaks. Each month, take the time to inspect areas around your water heater, dishwasher, refrigerator, washing machine, sinks, and toilets. If any hoses or seals appear old or damaged, replace them. Take the time to inspect and repair obvious caulking and tile grout damage. It's a small price to pay now for what could be expensive repairs later.

Find and fix leaks quickly – Make a habit of checking the main fixtures regularly so that when something out of the ordinary occurs you will notice it and take action immediately. Sometimes, however, slow water leaks aren't very obvious. A great way to discover hidden leaks is to look for stains in areas where water is often used. For example, if you see even small stains on the cabinet floors beneath the sink in the kitchen or bathrooms, you could have a problem. Experts suggest that warm spots in the floor or tiles could also be an indication of hidden water damage.

Inspect the sewer line – Clear away build-up and roots from around your sewer line. Obstructions to the sewer line could create major plumbing problems in the future.

Take a vacation – The worst thing to come home to after a great vacation is major water damage. On your next trip, try turning off your water while you're gone. For many homeowners there is a separate shut-off valve for the home that doesn't affect your irrigation system.