Comcast: Our 3% price increase is actually 40%

Comcast took over the ground cable business in Houston, Texas. The transition was relatively smooth, with a low percentage of outages and complaints - despite many people with proprietary email addresses being forced to change names. For many people, like myself, there was little difference except the name on the bill.

That of course lasted only a little while. This is a cable company, after all. Soon after they were firmly in place, they began changing their channel lineups and increasing prices. I could care less about TV, as I only have them for my Internet, but my wife likes to watch television sometimes on the weekends so we have basic cable. For about 5 years, we've had the same package - broadband Internet and basic cable which included all local and regular cable channels (CNN, SciFi, History, etc).

Comcast came in and claimed that they were just shifting things around and adding more channels, as an excuse for the slight 1-6% increase in price, but very little else would change. Was this true? Well, this is a cable company after all. Here's what they really did.

They increased the prices of all their services by 1% to 6%. They then began adding High-Definition channels - channels that they already had in standard definition, but apparently that counts as "adding" a channel. Then they cut out several channels completely. Then they did something very clever, they completely gutted the basic service channel lineup, reducing it essentially to local (and HD local) channels. What did this do? It eliminated the basic cable service entirely, because you get very little from it that you don't get from regular terrestrial broadcasts.

This service is now $17 (up from $15)...paying for cable that gets you nothing. Their next up service package, which includes all of the cable channels we already had before the switch, is around $40/mo. That's a 38% increase in the cost of same-service cable, not the 3% increase they notified us of for our basic service in our last bill.

Very clever indeed. This does a few good things for Comcast. For customers like me, they collect slightly more money while providing vastly reduced services, thus encouraging an upgrade to give them nearly 40% more each month for exactly what I had already been getting. For customers without Internet, it encourages them to either upgrade or ditch cable entirely, since it probably isn't cost effective to provide technical and service support to a customer paying only $17/mo. It also encourages people to look more closely at their bundled packages, which would effectively ensnare consumers into having cable/Internet/phone with a single company - not, in my opinion, a smart move.

So my wife and I are considering hooking up the big antenna in our attic and just getting broadcast TV for nothing, cancel Comcast entirely and switch to AT&T (who we already have a landline phone with). This would cut our current bill in half (their best DSL speed - 6.0mbps download is only $35/mo compared to the $70/mo we now pay for Internet/cable).

We'd already discussed this before, but my wife didn't want to cancel the cable. Now that Comcast has effectively canceled it for her already, she is starting to lean towards getting rid of them and accepting local channels. Maybe it's not so bad that Comcast is so bad.

Save on cables, etc

Cables have an enormous markup in retail stores. I thought I would plug monoprice.com, who I have had nothing but success buying cables and other small equipment from. A $30 USB cable at a retail store is about $2 from Monoprice (plus shipping of course).

I have purchased various things from them with satisfaction, KVM switches, mounts, component cables, USB cables, fiber optic audio cables, and much more.

Don't pay ridiculous prices for cables!

(note: monoprice did not contact me about plugging their company, but I believe in spreading the word about good companies that I am happy with)

When should you get rid of your car?

No Credit Needed has a problem that made me think a lot about our relationship with automobiles. In this specific case, a transmission may need replacing - among other things - at a tune of $2,000 on a 7 year old van with 135k miles.

Some of the comments from his readers made me pause. A good many of them considered such a car to be unreliable, and the solution to be to buy a newer one. Here is a van that probably cost $25,000 new, and 7 years later it is unreliable and needs replacing? The math doesn't work well in my head. Over $3,500 a year for transportation. We must be out of our minds to buy these things!

When the automobile was invented, an owner of such a machine could take it apart and put it back together again. They took time to learn how it operated and how to fix it. Today most people can't even change a tire (and not the actual tire on the rim, just bolting it to the shaft!).

This is a recipe for utter disaster. An expensive machine, bought on credit, constantly depreciating, needing more maintenance as it gets older, without any knowledge of it beyond how to operate its controls in the most basic way, and utterly reliant on an industry (mechanics) that benefit from mechanical failures and lack of consumer education.

Now a repair is due...yet when we consider whether to go forward we do not think of how much we paid for it, $25,000, we think of what it is worth now, say $8,000. A $2,000 car repair looks huge. Yet this is something that cost us $25k, needing a repair of a mere 8% of it.

Somewhere along the line we forget how much we paid (probably because we never wrote a check, we just made little payments), and its value is judged not by what it is worth to us, but what it is worth to everyone else. This leads us to terrible financial decisions, like trading in a vehicle for chump change (market value) simply because it needs an expensive repair.

This is not even considering the dependency we have on mechanics. Our lack of knowledge is our enemy here. We are dependent on the trustworthiness and honesty of the mechanic, something we cannot judge unless we have had experience with them. And that experience could be costly.

I just can't imagine buying a living room set, spending $25,000 on it, and then buying all new furniture for $25k again in 5 years. If the couch needs reupholstering, we don't say "Well this job will cost $1,000 and I can only get $3,000 out of this set at a garage sale, so I should just buy all new furniture!" - no, we say "$1,000 is worth it, this furniture cost $25,000!". We expect value out of the things we buy, why don't we expect it from our cars? And when repairs do come up, why do we ignore what we originally paid when evaluating whether the repair is worth it?

At what point should magazines be paying us?

I have decided not to renew my subscription to Parenting Magazine. Though we do not have any kids, I thought it would be a good idea to subscribe for various reasons, one being that we wanted some magazines for weekend morning reading material. Money Magazine was among my initial purchase, but that also will not be renewed. The articles in it are fairly fluffy and although sometimes entertaining, there is far more useful information elsewhere.

Anyway, the reason that I will not be renewing Parenting is that it not only contains very few real parenting tips, but it is almost entirely a mechanism of product advertisement. All magazines have ads, but even the articles in Parenting are usually little more than cleverly disguised product placements. Nearly every "solution" in any article involves the purchase of some commercial product. Even the recipes, which should be fairly inoculous, suspiciously include brand names or processed/frozen goods.

I can ignore the blatant disregard for the male role in parenting in this magazine, and the frequently useless (and rare) male-focused article and the general tone of the entire publication that men do little to nothing in the way of child rearing, making way for "super mom" because as my wife says they are just embracing the stereotype.

I can ignore it because the entire magazine is insulting. When they are not hawking merchandise and "must have" lists that are overflowing with junk that no practical parent could ever possibly need they are filling pages with reader-contributed materials and common-sense tips. Apart from actually putting all the material together, I am at a loss to figure out what content the editors actually produce. I feel violated that I have essentially paid to be advertised to while trying to trick me into believing they are delivering original and useful information.

This magazine, and others like it, should just be made available on the free rack.

How to ruin a household brand name

I have discovered 5 easy steps to taking a million dollar brand name and run it into the ground so it not only loses credibility, but becomes synonymous with the exact opposite of its original intention.

• Step 1: Create a fantastic concept and sweep it nationwide. Base your concept on giving folks tips on making beautiful household decorations, foods, and crafts out of everyday items. Become so popular that your very name brings to mind a do-it-yourself can-do attitude and quality and sophistication. Be the model by which all domestics aspire to.
  
• Step 2: After your reputation is established, begin licensing your name to mass produced merchandise sold in big box stores known for low quality cheap goods sold largely to low income markets. Add a shred of credibility to the project by at least selecting colors, patterns, and themes.
  
• Step 3: Abandon the DIY attitude and focus on themes that encourage people to buy more mass produced products instead of making things on their own with everyday household items.
  
• Step 4: Overprice these goods so that the low income market they are catering to will not want to buy them, and the high class market that they would appeal to won't have them available because they are sold in stores that they wouldn't step foot in.
  
• Step 5: Abandon all pretense of class by taking an existing product already in popular and in mass production and slap a label with your name on it and jack up the price for no apparent reason.

As a big wine drinker, I am appalled that Martha Stewart is "rebranding" Ernest & Gallo wine. Not only does Martha bring nothing to the wine business by doing this, but she has yet again chosen a product that is known for it's cheap availability. She could have only done worse by putting her face on a box of white zinfandel.

It is sad that Martha Stewart, who was once the "diva of all things domestic" has become a poster child for commercialization and brand consumerism. I would probably try Martha Stewart wine if it wasn't for one important thing, she doesn't have a vineyard, so Martha Stewart Wine really doesn't mean anything.

The good news is that if you already enjoy Ernest & Gallo, you're already drinking her "new" vintage.

Unecessarily complicating a simple product

I just bought a new wall clock. It's a pretty typical clock - the analog kind with a second hand and a quartz movement, battery powered, in the back. As you can expect, these clocks take a AA battery and last, well, forever.

Not anymore. Whoever made this clock thought it was too simple. So they added a small LCD indicator on the back to set the date/time/zone so that it would automatically change to a new time during daylight savings time. Because really, turning the gear on the back of the clock is more work than the average consumer can do twice a year.

But they were too lazy to actually make a new clock with this fantastic design, so they just screwed on a MORE complicated LCD box that is simply wired into where the original AA battery. Now it needs 2 AA batteries. AND the LCD box needs its OWN small lithium battery (those coin-like batteries).

So we went from a simple quartz timepiece with a AA battery to a quartz timepiece with a second LCD clock attached to the back that now requires 3 batteries - all so I don't have to spend 10 seconds changing the time twice a year.

Thanks!

How much do we spend on wheels?

Bankrate.com has a brief article about how much our cars cost us. We have a figure here of about $28k for the average brand new car. Americans typically trade cars every 3-5 years.

A car is an incredible waste of money. Between the age of 30 and 60, the averages show that we will spend over $170,000 on automobiles. What's really upsetting is that after you've spent all this money on cars and you're 60 years old you have nothing to show for it. Maybe some photos. All your cars are sitting in junk heaps.

Is it worth it? Why do you buy a new car? Why do you waste so much money on something that you will probably sell in 5 years and have nothing to show for?

The wine debate

We've all heard that drinking a glass of wine a day is good for you. The limit, I've read, is 2 glasses for an adult male and 1 glass for an adult female per day. It is supposed to do all kinds of nice things to your body and to your heart so long as you consume it in moderation.

I'm sure there is a debate on this, but as big wine drinkers I was interested in how this would impact our budget. Let's assume that we can stomach a cheap $10 1 liter bottle of red wine. If we each consume 6 oz of wine every night over dinner (that's 1 glass apiece) we will have emptied 2.5 bottles a week, or 10 bottles a month for a total of $100.

Ouch. Over our lifetime (assuming we live to, say, 75) we will have spent $54,000 on wine. That's just the glass of wine over dinner! That's an opportunity loss of $500,911 assuming 8%.

Of course we could also save the money and buy all the wine at the back end. Given 2% inflation, each bottle will cost $24 and we can buy 20,871 liter bottles of cheap red wine. That would definitely encourage the grandkids to stop by.

How to eat less and spend more

My wife and I went out to dinner last night at a decent asian restaurant. The bill for the two of us? $67 including $9 for tip.

You might expect this from a restaurant that starts off with $23 plates. What you wouldn't expect is such a large bill when my wife and I split one of those plates. Some friends invited us out and such a sudden impact to our budget wouldn't have been pretty, so we agreed to split the meal. Unfortunately what we didn't plan for was buying a couple glasses of (their cheapest) wine each, which ended up costing more than the food!

Alas, it is the alcohol that breaks the bank at restaurants, not always the food. And at $5-6 each, it is easy to nickel and dime yourself to death.

Have $80 million to spare? Buy a sub

No, it's not an expensive sandwich. For only $80 million dollars (a bargain if you ask me) you can have your own luxury 5,000 square foot submarine. Expect your friends to trade in their private yachts for one of these in the near future. If you don't have at least the base model, which starts at $25 million, please don't bother showing your face at the billionaire's country club.

Each sub comes with a custom interior, extravagant viewing windows, and even a carport to park your Bugatti and a minisub that you can take afternoon jaunts in.

Sales information is not known, but there's a good chance this guy has one. Nothing says "living off the backs of stockholders" like buying a submarine with your $200 million severance package after 5 years of doing a mediocre job. If you can't afford it, chances are good that American Home Mortgage will lend you the money.

Torpedoes not included.

Want to go broke? Build a pond

I am exaggerating, but I never knew a pond could be so expensive! When my wife and I moved into our house, we set about redoing our backyard. We literally had a clean slate; the whole yard was mostly dead grass and mud pits. Our first project was building a small pond, which is 5x6 kidney shaped. Around it we extended our patio with natural stone and added beds around the entire yard. 2 years later we have just started adding foliage. It's been a long project.

Unfortunately, our pond has been a real money pit.

As it turns out, some drainage problems resulted in a lot of mud from a failed and unfinished elevated flower bed to wash into the pond. So for several months it has been completely clouded. We only see the 3 big fish and half a dozen babies they spawned when they come up to feed. So, this winter we are going to have to empty it all out, clean it, refill it, put the fish back in and start over. Let's not forget the huge string algae problem that developed over the summer.

Otherwise, the pond has been really expensive while we have tried everything imaginable to clear it; from chemicals to scrubbers to water changes to vacuums. Nothing has worked!

What will a brand new car really cost?

If you're anything like me, you balk at the very idea of paying more than $15k for an automobile. The value of these things sink like a rock. The depreciation is even worse on a luxury car. I wonder what this guy felt like when he traded in his car. If the link doesn't work, it's a 2002 Volvo S80, very nice, full leather interior, with only 87k miles on it selling for $12,000. Guy probably traded it in for around $9-10k. The MSRP on this vehicle brand new was around $45k. Over 5 years that's a depreciation of $6,600 a year!

Assuming a no-down zero-interest loan (we'll assume the guy has awesome credit since he's buying a luxury sedan) he was paying $750 a month on the car while it was going down in value $550 a month. So over 5 years, this vehicle cost him $583 per month to own, not including all his maintenance costs.

Compare this to the person buying the car now. When people take care of their vehicles, they can last forever (I've had plenty over 150k that looked and ran brand new). There will be some increased maintenance costs for an older car, but the preventative maintenance is about the same as with a new car. Oil changes, adjustments, etc.

Figure paying $12k for the 5 year old luxury car with 85k miles on it. After another 5 years the vehicle is 10 years old with, say, 170k miles. Its probably nearing a good retirement age by that time. So sell it for a few grand. My 2002 Volvo has now depreciated $150 a month during my ownership, as opposed to $550 a month. Oh, and by the way, instead of a $750 car payment while waiting for the beautiful 02 Volvo to go on sale after 5 years, I was stashing away $400 a month in a nice 5% savings account.

So the first owner has sold his brand new car, spent $33,000, and is back in another new car with a loan.

I waited 5 years, kept the clunker I had, stashed $400 (leaving me with, btw $350 extra a month to maintain my old clunker) and bought the same car for $12k with $15,800 left over in my pocket, not including the extra $350 a month that I doubt went entirely to maintenance.

The difference between the same car purchase brand new vs 5 years old is $48,800!

Derogatory credit report UPDATE

A couple of weeks ago I checked my credit score, which I get for free with my Providian card that...well, I don't actually use and only keep because of the free score (sorry Providian). Anyway, this score fluctuates several points between months but has remained stable over the last year, which is as far back as they display the records. The score for July however dipped 30 points. I had opened up a credit card with Citibank, so I at first assumed it was because of that - though that seems like quite a drop just for opening a line of credit. However on the "reasons" it said, and still says, "You have multiple accounts showing late payments or derogatory remarks."

That's not good! I feared that either someone I do business with reported me late, which I have not been, or maybe an account had been opened I wasn't aware of and wasn't being paid. After mulling it over I was torn between waiting a few months to see what happened and just biting the bullet, checking the report, and seeing what was up. In the end, I guess because as a personal finance blogger I'm always reading articles on identity theft and credit reporting errors, I plunked down $10 to check it.

Turns out there is nothing derogatory on the report at all. No late payments, no strange accounts. Nothing. I feel better, but I could have bought a really nice cheeseburger with that $10.

Does a credit card make you purchase more?

Do you buy more with a credit card? I was listening to Dave Ramsey the other day and he read off a statistic that McDonald's found customers charging an average of 47% more per ticket when buying with a card vs cash. Other studies showed the figure around 30%. I'm sure its higher for fast food joints. When you are buying a $3 happy meal, it only takes a super-sized fry and an apple pie-thing (do they still sell those?) to knock it up another couple of dollars.

But are we spending more with the card, or are we just spending more per transaction?

I think it depends on the individual. I don't think I fit this statistic. If I have cash, honestly, I'm more likely to spend it. Maybe its a generational thing? My budget is all done electronically. My bank account is my "money". If I have a $10 bill in my wallet, that just feels like extra spending cash. I'm more likely to stop at a convenience store to buy a soda if I have a dollar. If my wallet just has the plastic in it, I'm more likely to just skip the transaction altogether. And when I do purchase on the card, I'm still looking at getting the best value to spend as little as possible. I know at the end of the week, I'll have to deduct whatever I spent from my paycheck. The idea of that hurts more than plunking down some green.

Plus all that change I get back? It goes into a jar. Where does the change in the jar go? 1) The vending machine at work, or 2) The change machine at the grocery store - which charges a percentage of the transaction.

For kicks, here's the article that prompted the discussion. Can credit cards make you fat? Sometimes mainstream media spins just crack me up.

The prada bag of the housing market

This is just too bizarre; KB Martha Stewart homes. Of all the decisions you need to make when purchasing a home, does the fact that it was 'designed' in part by a woman on TV living somewhere on the east coast fall under a high priority?

"I love all her things," says Menyon Green, a 42-year-old nurse who recently bought a Martha Stewart-KB Home in the Atlanta suburb of Fairburn, Ga. "I just knew this was going to be a good subdivision."

What? How do you know it's going to be a good subdivision? I'll admit it, I own a Martha Stewart frying pan. It was on sale and it looked nice. But a house? Whether or not you have a door knocker with Martha Stewart's face molded in bronze on your house doesn't change the fact that it's a KB home - not exactly a builder known for its high quality.

"Right now it's a unique type of offering," says Rita Rodriguez, chief executive of Enterprise IG in the U.S., a brand and design agency. "You can invite someone to your home and say, 'This is a Martha Stewart home.' But if it's replicated and stamped across too many odd markets, the uniqueness can be gone. That cachet and aspiration isn't there, and you just become like everybody else."

Maybe I'm old fashioned, but has it occurred to these builders that instead of signing up celebrities in cross-marketing schemes, they should just offer more than 6-7 floorplans? All the new subdivisions going up are full of houses that look exactly the same, with the exception of some trim there or a colored brick here. They also all use the same "style", brick faces with hardiplank siding. The garage is always on the front, the walkway leading along the side right to the front door, and to the side of it a flat or bay window. Some have brick all around, but none of the two story has all brick (the upper half sides/back are ALWAYS hardiplank) until you start getting into the custom or $750k+ homes.

open kitchens and dining rooms suited for entertaining, plentiful windows to capture natural light and an exterior trim available on some homes that supposedly matches the color of Paul Newman's eyes.

...okay.

Some buyers say they are attracted to the Martha homes because they suggest quality, functionality and class. Others say they expect the homes will have a better resale value than other homes.

Sorry, but the quality of your home is going to depend on the builder, not the designer. This partnership looks like McDonald's selling knockoff prada bags in happy meals. Resale value? How is tying the "designer" aspect of your home to a woman who probably won't be remember 30 years from now help your resale value? Remember, this is supposedly a home that should last 100 years. Do you think anyone then is going to care that it was designed by some celebrity? Martha Stewart never even saw your home, or set foot inside of it. She brainstormed floorplan ideas and color schemes with some team that pulled up 64 plans and started mass producing them.

Interesting:

"It's our version of the iPhone. It illustrates the power of something different with a brand tied to it,"

We're turning whole houses into fads now. Unfortunately, fad and trendy designs tend to hurt resale value in the long run, not help it. Remember all those $100k commercial/industrial stainless steel 800 sq ft kitchens that were all the rage? They're darn hard to sell now. That's what following a fad gets you.

So what ever happened to personal creativity and adding your own personality to your home?

"If I could afford to do it, I would do the whole thing Martha Stewart style," she says. "Matter of fact, I would like her to come to my house and show me how to do it."

So sad.

Consumerism at its best

Here's consumerism and overconsumption at its best.

iPhone cravers

Some people are just dying to get their hands on the new iPhone. They are willing to pay hundreds above the already ridiculous retail price to have it, and they are willing to stand in line for days to be the first to have one. Are we going to see a repeat of the Playstation 3 mess?

No doubt there is a team of advertising marketers somewhere working with Apple patting themselves on the back right now, because pushing people to this level of sheer stupidity is an award-winning accomplishment!

Here are some amusing quotes.

I am looking for several people who will wait in line for me to buy the new Apple iPhone on Friday, June 29...You need to be reliable, mature, and patience will definitely be a plus

I don't think this will get many responses. The problem is that anyone who is mature and patient is going to wait until they can walk in and buy an iPhone, not wait 3 days outside a store.

I am charging approximately $150 over the cost of the iPhone

Some people pride themselves in finding good deals, or buying things on sale, others happily pay significantly more.

It seems like the asking price for people to stand in line is 200-300 dollars (however i have seen offers for 150). but I want to make SURE that i get one, and I'm pretty much willing to pay the 200-300 extra for it

Who is going to stand in line for $300 for 3 days? That ends up being $4.16 an hour.

Ok, so here's the deal. I need an iPhone. Like, really need an iPhone. It's so bad, I've taken to carrying around my paper cut-out just to get used to the size

Here's a corporate executives dream come true. He hasn't even used the product yet, but he is completely obsessed over it.

In any case, the iPhone release is going to be really entertaining. I can't wait to hear the first report of someone paying $1,000 for their iPhone and then accidentally dropping it in the toilet a day later.

Target doesn't support my 10 year old vacuum

I have two busted vacuum cleaners. The first is a Dirt Devil that is a few years old. The second is a Hoover that is about 10 years old. As near as I can tell, vacuum cleaners have become expensive throw-away items. The average price for a vacuum cleaner at Target is $100. However they only sell the belts and accessories for the vacuum cleaners that they stock, and the models change every single year. Worse, the manufacturers have different belts and bags for just about every model (my Dirt Devil is a bagless upright though). I recall when a Hoover had 2-3 belt styles and any large store would stock all 3. The newer models used the same belt as the older ones. And why not? You can easily design your newer vacuums to use one size of belt.

It's bad enough that all vacuum cleaners are now made entirely of plastic, except for the screws holding them together.

Dirt Devil however does sell parts for my machine. I had to order a new roller for $15 plus $5 shipping. 20% of the whole vacuum price, ouch! Hoover's website however only stocks the basics for my vacuum; bags, filters, and belts. If that Hoover should break (right now it just needs a new belt, but Target nor anywhere else sells it) it will be going in the trash; I can't get parts for it.

Am I wrong to expect a manufacturer to support an appliance for its entire life? This vacuum is great; it runs perfectly with no problems. Should I expect to be able to buy parts for it? Or have vacuum cleaners just become disposable?

Media Cart - as if food wasn't expensive enough

Here's a novel idea from Media Cart, Inc. Its a scanner and screen attached to the cart that allows you to scan your items as you shop. I like the idea, but what will it cost to implement? Sure I save time at the checkout lane, but is that really worth spending more on the food products I buy to equip the hundreds of carts at each grocery store with a scanner and LCD screen?

Unfortunately the idea is taken a little too far. The 'screen' on the cart also includes a GPS-like store navigator. If grocery stores were really concerned about their customers getting lost, they'd stop rearranging their shelves every few months! I just don't need a navigation system to tell me where the milk is.

Another problem is that it will embed advertising. Worse if you use your "store card" (which they force you to by hiking up the prices if you don't use it) the system will track your purchases and begin displaying "relevant ads". Meaning if I buy lots of bags of rice, my cart is going to start suggesting I buy certain brands.


This cart starts off with a good concept, but ruins it by basically becoming a platform for manipulating customers into purchasing higher priced name-brand goods.

This is a start, but its a bit misleading for the company to say it is designed to save us (consumers) time and money. If that were the case, they'd have some useful tools, such as the ability to scan different brands (and sizes) of products and tell you which one gives you the most for the least amount of money. Alas, such a tool is absent from the Media Cart, but I bet it will tell you just how delicious "Cheerios" are.

I'll stick to the plain metal carts, unless a grocery store releases product designed to help me make better purchasing decisions, not just help me spend more.

Two big mistakes, related?

I was going through my finances this morning and came across 2 pretty big mistakes. The first was with my credit card. I pay my balance every month, and it has been quite a while since I have ever been hit with a finance charge. However this month I was double-checking my bills and noticed that I paid a total of $390 towards my card...but the balance due was $397! Of course now the billing cycle for the previous period is closed and I can't pay any more money into it, so because I paid $7 under what I should have, I'm going to be hit with a finance charge.

Ugh!

Worse, I quickly calculated my average daily balance to be around $250. $250 hit with a finance charge for my stupid $7 mistake.

I also found a pretty bad leak in my budget. I discovered that I have been paying an average of $57 a month on liquor. My evening pre-dinner drink is really creating a huge leak in our spending. Do I really need to spend $57 a month on alcohol? I don't think so! Starting immediately I am going to switch to a nonalcoholic beverage after work. We'll save the alcohol for wine over nice dinners.

I think that these two may be related. To have paid $390 on a $397 bill, maybe I was drunk!

A warranty on my mouse? Um, no

I recently went into Best Buy to purchase a $20 mouse for my computer. The cashier offered me a $5 extended warranty on it. I of course declined; here's why.

The mouse itself already has a warranty with the manufacturer. The only benefit that $5 would get me is being able to return it to the store and get it replaced instantly. However the likelihood of it failing within the 1-2 year term is pretty slim. Rather, it would be in my best interest to 'self insure' all of the electronic products. For each product I buy, if I take the warranty price and put it into a savings account, not only will I statistically have enough money in there to replace any of the given items should one of them break but I will also be earning interest on the unused portions of my warranties. My self warranty also never expires, plus the item value at the beginning of the warranty (at purchase) is going to be less than at the end of the warranty.

This applies to everything, from mice to flat screen TVs and laptops (though I would never spend money on a flat screen TV). It is cheaper to self-insure than to accept a big box store warranty, especially since the warranty is already covered by whoever made the product and included in the MSRP.

Best Buy and all of the other stores (all of them) sell these warranties because they rake in huge profits from it, the same reason they all want you to sign up for a credit card. Heck, a good chunk of the price of the warranty would have gone directly to the salesperson. My $5 warranty would have given him about $1 in commission, yet the store is still making huge profits from the 80% left over. Don't fall for their sales pitches. If you really believe in extended warranties, pay it to yourself.