26 December 2011
Worth It or Not? Deciding What’s a Good Buy (and What’s Not)

As the economy continues to sputter along, consumers are increasingly questioning what were once rules of thumb. Facing strained household budgets, they’ve begun to evaluate whether longstanding practices still make financial sense.

For example, “three months or 3,000 miles” has long been the mantra for oil changes. Many automakers now suggest an oil change every 5,000 to 7,500 miles. Cutting out two unnecessary oil changes per year could put an extra $50 in your pocket!

As you ponder your own spending, consider these thoughts on what’s “worth it” and what’s not:

Buying car rental insurance. Most travelers can pass on this. Typically, a solid personal automobile policy provides all the coverage you need (make sure your personal policy covers rentals used for business if you’re renting for that purpose). You can usually skip personal accident coverage if your own medical insurance provides coverage. Some rental companies may charge for the car’s diminished value, loss of use or administrative fees if you get in an accident.*

Verdict: Not worth it.

Signing up for credit report services. The Internet is full of offers for credit-monitoring services that promise a free copy of your credit report when you sign up for a trial. Truth is, most people don’t need constant credit monitoring. It’s easy to get caught up in the strings that come attached with offers (service providers count on you to not cancel the service after the initial trial period and charge your credit card accordingly). Better: Request a free copy of your credit report with no strings attached. By law, you are entitled to a free credit report each year.

Verdict: Not worth it.

Purchasing long-term care insurance. With nursing home care topping $75,000 on average, and a year in an assisted-living facility running around $35,000, long-term care insurance can be a smart purchase. On average, 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. Buying in your 50s can lock in a lower rate than if you wait until your 60s or 70s. Contact an insurance agent specializing in long-term care insurance for further guidance.

Verdict: Worth it.

Joining warehouse clubs. It’s sometimes hard to tell if you’re really saving money when you’re buying spices by the pound and paper towels by the case! But warehouse clubs do limit their margins to between 11 percent and 14 percent, compared with 25 percent or more at supermarkets and mass merchants. The savings can more than pay for the annual membership fee. Just be sure you buy smart: Throwing away half the food because it expired will negate any savings.

Verdict: Worth it.

 

*With Nevada State Bank’s Visa® Platinum card, your rental is covered for collision damage or theft when you use your Nevada State Bank Visa Platinum card to pay for the rental. Certain restrictions and conditions apply.

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