By Andrew Housser
It is a maxim that life is expensive. Major purchases, whether appliances or other items for a home, a car or other costly needs, can seem to be so costly that they are difficult to attain without going into debt. But with some planning, it is possible to avoid indebtedness while managing the needs of your home.
1) Budget for maintenance.
People who purchase a home must take into account annual maintenance and repair expenses. Experts generally agree that homeowners need to plan on maintenance costs totaling 1 percent to 2 percent of the home's value each year. That means that a home valued at about $200,000 will likely have maintenance costs of around $2,000 per year. The best strategy is to plan ahead. Divide the total anticipated maintenance expenses by 12 and set that amount aside each month in a dedicated savings account. This way you will be prepared when a cost arises, and you won't need to go into debt to pay for a repair -- or be forced to skip a repair and endanger your home or your own safety.
2) Buy in the off season.
Just about any type of goods can be found just after its season, when selection is still good, but prices are at rock bottom. For example, buy winter gear in the spring for next year; install new air conditioning in January; and buy a grill in October.
3) Track prices for items you know you will be purchasing.
If you plan to purchase a new appliance, a more costly piece of clothing, or a vehicle, watch advertising and deal offers for several weeks or months in advance. Jot down the prices you find in a notebook or spreadsheet. Then you will be able to tell whether a price is a good one, and you can make an educated decision on when to buy. This strategy even works for items like groceries -- if you track prices in a "price book" or using a phone app, you will know when a price is at its lowest and the item is worth stocking up on.
4) Shop genuine sales.
Watch out for inflated "sale" prices that are not discounted much from the regular price. Sometimes stores promote these "deals" around holidays or other times when many people wish to purchase an item. Retailers hope supposedly special pricing will drive more purchases. On the other hand, a real sale can net you a great deal.
5) Buy on the right day of the week.
Computer rebates often take effect on Mondays, making that a good day to buy new hardware. Gas prices tend to go up on Thursday afternoons because of increased weekend demand; filling up your tank on Wednesday or Thursday morning often can save money. Appliances might cost less on Sundays.
6) Buy during the best month for a given category.
Furniture can be a good deal in January and July, prior to new releases the next months. Tickets for Broadway shows are usually priced lowest when demand is low, in January and February. Manufacturers re-price digital cameras in late January to make room for new models. Appliances carry the best prices during the third quarter (July through September). The current year's car models are priced best at the end of the year, after next year's models roll out in September.
7) Choose between repairing and replacing.
For most appliances and many other household goods, breakdowns are inevitable. When an appliance malfunctions, take several factors into account when making the decision to repair or replace it. How old is the appliance? A newer one might be more energy efficient, saving money over the long run. Is it near the end of its life span? Appliance life spans range from nine years for a dishwasher or microwave to 15 or more years for a gas stove. If the appliance is aging, it might make more sense to replace it. Have you already repaired the appliance previously? How much will a repair cost? If a repair costs more than half the cost of a comparable new appliance, it might make sense to replace it.
Most importantly, do not get so caught up in bargain hunting that you spend money you don't have. Few things are good deals if you must go into debt to obtain them. Instead, live within your means and save for predicted expenses. Then you can seek out great deals and use your savings to repay your debts or save for the next rainy day.
Missed the January furniture sales? You may want to wait for July, the other month when prices tend to drop. (©Digital Vision/Thinkstock)
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
