50 Plus Finance

Tuesday, January 11, 2011

Best Buy Wants to Buy Back Your Old Gadgets

Image via Wikipedia
Electronic retailer Best Buy wants your old electronics. As long as you bought them from them. Starting last week the program is aimed at consumers that love to get the latest new electronic gadgets. By paying up to $59.99 when purchasing the new device, Best Buy will buy back the gadget for up to 2 years. But remember your not getting back full price, just a percentage of full price depending on how old the unit is.

It seems like technology changes every six months. The newest phone or gadgets can change many times per year. That's where Best Buy comes in. Here's how it works. If you bring back your device within 6 months Best Buy will give you 50 % of the purchase price. If the gadget is 6 to 12 months old then you will get 40% back. If it's 12 to 18 months old then you will receive 30% back and if it is 18 to 24 months old you get 10% back.

The Best Buy Back Program is said to include phones, computers, laptops, netbooks, tablets and most TVs.

For those that frequently upgrade this is good news. If you don't have time to resell your items when you upgrade, then this is for you. But maybe it would be better to sell your electronics on Ebay or Craigslist.

From practical standpoint are you really going to trade your phone or TV in after 6 months. Why would you? After laying down $600 for the latest laptop, would you bring it back to Best Buy in 6 months and receive $300 back. To buy another $600 laptop. You know the money back you are getting will probably be in Best Buy gift cards and not cash. Don't forget the $59.99 charge for this service.

What if it were a year later you brought back your laptop. Then you would receive $240 for that 1 year old laptop. I believe you could get more for it on Ebay or craigslist. What if you bought a Ipad and at the end of 2 years they would give you back $50 dollars. I think you could sell it for more than that.

Best Buy had to come up with something new to keep in the forefront of being the largest brick and mortar electronic retailer. They state they will have a huge presence on the forth coming Super Bowl TV advertising. With all the online competition, they must be struggling. They could be following in the footsteps of Circuit City. But for the compulsive gadget buyer this could make sense.

Monday, January 10, 2011

Should Couples Have Separate or Joint Accounts; Revisited

Back in Sept. I wrote a post concerning my views on a couple having separate or joint financial accounts. I stated that is what my wife and I had done and why. I always felt a little guilty that we were doing that. I was brought up that, for better or worse you combined your finances. All my friends and family have combined accounts, I am the only one with separate finances.

I was reading a post over at GetRichSlowly.com and read how top-notch blogger J.D. Roth has his finances separate form his wifes. I thought if it makes sense to him why am I so concerned.

Without all the cultural pressure of combining accounts and considering the relational pluses of having separate accounts, it makes sense in my life to have them separate. If you are someone who follows the work of Dave Ramsey, you know he says separate accounts are wrong. His reason for this is that if your keeping your account separate then your short circuiting a big part of the relationship. Having combined accounts gives you more ways to plan your lives together and foster more communication, resulting in a closer relationship.

For me in my first marriage, we combined are accounts. We were both in our early 20's, didn't have anything to lose, and we were fresh faced kids starting out in life. Little did we know someday all of it would be over. Fast forward to second wife. With remarriage, both parties already had established lives financially. Already established bank accounts, investments, and habits that were well entrenched. At that point combining financial styles and habits would be hard.

The choice of having separate accounts, over a decade, has convinced me it was the right move. Having things separate reaps benefits everyday in the avoidance of disagreements. We both have strong opinions when it comes to finances. Also being a combined family, with children from previous marriages, it's only another reason we are doing the right thing.

If you are at the point where you must consider having your finances combined or separate, here's a list of things to think about.

The arguments for combining finances are:

If there is only one income, it doesn't make sense to have anything separate
One person is financially inept at handling money. Combining money would only be the practical thing to do.
You believe that joint finances are easier and economically make sense
It's morally wrong to keep them separate and it shows a distrust of your spouse.

The arguments against combining finances are:

You believe that with all the best intentions marriages fail, so whats the point.
You both make the same amount of money. Then it's OK.
Your family has a tradition of separate finances.
It keeps the level of money fights to a minimum.

I can say I love my wife and I would trust her with everything I have. But I think keeping our finances separate has removed a point of contention and helped our marriage grow. Again it comes down to what's comfortable and right for you. When I want to give good advice to someone I think what would I tell my own children in the same situation. I would say be honest with your spouse and be honest with yourself in your feelings about money.

Sunday, January 9, 2011

Best of the Best Weekend Round-Up

This is clicked at sunrise in pondicherry

Image via Wikipedia
The first week of the new year is now behind us. Getting back to the normal non-holiday work week and it feels great. The new year got off to a good start. I hope yours did to. Here are a few of my picks for the best of the weeks posts.

What Does a Trillion Dollars Look Like? at The Biz of Life

Old Habits for a New Year at Get Rich Slowly

The Myth of Ownership at Consumerism Commentary

An Example of How to Retire Early at Free Money Finance

The Power of Passive Investing by Richard Ferri at Bargaineering

Financial Tips for Couples in 2011 at Five Cent Nickel

$5 Gas is Coming... Eventually.... at Free by 50

It’s Friday…And Time for a Book Giveaway! at DINKS Finance

Get it On. Child Tax Credit Extended through 2012 at 20 Something Finance

The Big Fat Guide to Kicking Debt’s A** at Money Under 30

Why I’m Happy with a $500 Car Repair Bill at Barbara Friedberg Personal Finance

Online Banking: Depositing A Check From Home at MoneyCone

The Importance of Sleep for Wealth Creation at Squirrelers

Can Rich People Get to Heaven? at Personal Finance By The Book

Financial Resolutions at Canadian Finance Blog

I was mentioned this week at:

DINKS Finance

Personal Finance By The Book

Blog Carnivals I participated in:

Baby Boomers Blog Carnival Seventy-third Edition

Carnival of Financial Planning - Edition #169

Carnival of Money Stories

Carnival of Wealth #19 – The New Year Edition

Festival of Frugality: Cheapest Man Alive Edition

I could of mention at least 25 more posts that were so well done and informative this week. The quality of articles in the personal finance blogosphere were outstanding. Must be all that holiday cheer washing of in to the new year.

Saturday, January 8, 2011

Is it Better to Pay Down Credit Card Debt or Build Up Savings?

If you were one of the lucky ones and received a end of year bonus, congratulations. You have the happy task of deciding what to do with it. Do you blow it on a new 50" 3D LCD TV or do you use it for a more responsible objective. Do you have credit card debt, why not use it to pay it down. What about putting it in a nice Roth IRA?

You have decided to put off the big screen TV purchase for the time being and use that windfall for more financially responsible goals. Where do you put it, on your debt or in savings?

The answer depends on your own personal situation. What would boost your bottom line the most? If you go purely by the math, paying down the credit cards makes the most sense. If you consider the interest rate your paying and what it's costing you and how little you will earn in a savings account, paying down the debt seems like a good plan.

If one of your goals is to give up credit cards permanently, a nice savings account is necessary. It's hard to make progress when every time an emergency comes along you have to reach for the credit card.

So building up a nice emergency fund of $1000 to $3000 is the way to start. Once you have an amount of cash put away for the rainy day thats coming, then go back to paying off the debt.

If you are anxious to pay off debt faster, then do a little of both. Pay a little extra to the debt and also still put some into savings. Also it's time to get a little creative with your budget. Try for six months to squeeze a little more of your cash toward your goals. Try cutting some items from the budget to arrive at your goals a little faster. Make it a project to sacrifice some of your extra expenses, like cable or dining out, but for only six months to get the job done quicker.

Friday, January 7, 2011

5 Ways to Mess Up Your Retirement Plan

Like most people, thoughts of retirement cross your mind every time you dread going to work. Sitting on a sandy beach, looking out at the surf, without a care in the world, is my retirement dream. Maybe it's yours. It's not going to happen for me.

According to statistics, only 25% of baby boomers are able to make that dream come true. I'm not in that 25%. That 25% have assets and savings lined up to live the dream. Even though the boomers have decent assets, they're not enough. The result is, there will be some full or part time working occurring well into their retirement.

You may ask how I got into the statistic of the 75% of who aren't ready or able to retire someday. It' was easy, I just followed these simple rules:

Don't be on a budget. Spend all the money you earn.

Don't save your money in Mutual Funds, IRAs, 401ks, or investments of any kind.

Don't live on what you make. Use credit cards irresponsibly. Run up their balances and only pay the minimum.

Don't have a car you can afford. Buy, lease, or rent an expensive car. Have a payment until you old and gray.

Don't live in a house that's affordable. Buy a house where the payments are half your monthly income.

If you follow these five rules you will be on your way to financial ruin in no time. These things, if done correctly, will keep you poor, your whole life. I will attest to the fact that the rules do work. Because I have done them all.

For me I'll be working well into the future. My investments are meager at most. Social security is not enough and can we really count on it in to days atmosphere, forget about it in 20 years.

What does the future hold for me? When I reached 65, I was going to sell the house and downsize. My original plan was to count on the house value appreciating, so when I sold it, I would have enough cash to generate an income and a comfortable life. That's out the window.

My plan 'B' is to keep working. My business generates a good income. A lot of the work is done by me. As I get older and can't do as much, I would hire more help. That plan would work well. I would be able to work well into my 80's. It's hard to imagine myself that old.

Trying to plan events over the next 25 years is presumptuous at best. Planning ones future with a wife and 6 childrens' needs can be hazardous. Financially, even in a bad economy, I'm still heading in a positive direction. Things can completely change in the next 5 to 10 years and I still may be able to make it to that beach. I'm exploring new directions to increase business, who knows where they may lead.

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Wednesday, January 5, 2011

She's Buying a Car, What's Better a Rebate or Low Interest? Help Dad.

My daughters car finally went to heaven. After 10 years of life, 200,000 miles and puddles of oil on the driveway, she needs a new car. I advised her to use the $5,000 dollars she has saved and buy used. But no. She wants a new one. She's just not going to listen to the old man.

She's been looking around for a while because her car has been on life support for the last 3 months. I went with her down to the dealer for technical and moral support.

Now if you know me, you would know of my absolute love of going down to the dealer to talk to car salesmen. Talking to car salesmen or getting root canal, which would I rather do, I think the later. Our salesmen was an elderly gentleman, his fire had long gone out, but he was interesting to talk to. Everything went well for a while until he had to throw a curve ball. He advised us there was a rebate. Then he said instead of the rebate she could have 0% interest. What to do?

When buying a car you have a choice between low or no interest and a rebate. How do you know which is better. It's a matter of doing the math. Huh! Do math? I know. Why not get some online help!

Several websites have online calculators that will help you decide. AutoTrader.com and Cars.com each have one, as does Bankrate.com . It's simple, just enter the loan amount, the rebate amount, and the interest rate if you take the rebate, and the interest rate if you don't take the rebate.

Lets put in some numbers and try it out. Say you have a 48 month loan for $25,000; the rebate is $3,000, and if you take the rebate the interest is 6%. If you leave the rebate you get zero percent financing. The answer: "It's a Wash", the calculator tells us. But if the interest rate was 8% instead of 6, you would come out $1,000 better by taking the zero percent loan and no rebate. One other deciding factor is if you are short on a down payment, you can use the rebate to help with that.

Now we had the facts to make an informed decision. I thought finally we were going to be done with this car hunt. Yet it was not to be. My daughter was starting to get cold feet, thinking about that long commitment of payments every month. We went home to think it over. To be continued........

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