Money Blunders…TV Edition
The following is a reprint of a post that I made from my old blog Getting Out Of The Poorhouse: To find out why, see here.
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If you’ve read my post about my goals for the next 12 months, you
would’ve noticed my fondness for HDTV and that I pay for both cable and satellite(obviously this needs to change, and it will). Now besides the $160 plus that I pay every month just to get an HD signal, how about the upfront costs?
In 2005, a week after I moved in to my house I had a modest 12×15 living room that was empty. Never mind that the rest of the house was empty too, this was the first place that I was going to furnish. I’d use a cardboard box as a dining room table if I had to (Unfortunately I didn’t, thanks sis!) So I went ahead and started scanning the Sunday ads that week for good ‘deals’ to furnish my soon to be home theater and here is what I found.
Zenith 50 inch plasma TV: $2999.99
Onkyo 7.1 audio video receiver: $869.99
JBL 5.1 speaker set: $239.99
Upconverting DVD Player: $150.99
Monster HT Surge Protector: $109.99
Monster Premium HDMI Cable: $114 x2 cables = $228
Monster Speaker Wire: $79
Grand total plux tax: $5073.23
Did I have $5073.23 laying around? Nope. But it was ok because the store was offering no interest for 36 months on all electronic purchases $399 and up, problem solved. All I had to do was apply for the store credit card, fill out a bunch of papers and I was the proud owner of a kick ass home theater system.
But wait - I have to protect my ‘investment’. I had to get the extended warranty for peace of mind. All for the low, low price of $750 for 3 years. No problem. Plus delivery of items to my house next day with basic installation for just an additional $199.
New total: $6022.23
All of this stuff for only $167 a month for 36 months? What a deal!
Six months later, the same TV was being sold for $1999. The receiver for $399, the speakers for $149, and the dvd player for $79. The Monster Brand accesories had generic equivalents that could’ve been bought online for the following prices:
Surge protector: $60
HDMI cable: $12 x2 cables = $24
Speaker wire: $30
Total+tax: $2971.53
In the 3 years that I’ve owned this setup nothing broke. So in essence I could’ve saved an additional $750. Plus my sister has a big truck so I could’ve used it to haul my purchases home and took my time to set everything up and I could’ve saved an additional $199.
So total saved if I had waited 6 months and looked online? $3050.7, which I could’ve used to pay my student loans with. Also the same $3057 invested at a rate of 8% compounded monthly and taxed annually at 25% would be worth $18,668 in 30 years. Lessons learned:
-It’s OK to wait. That shiny and new gadget/gizmo/doo-dad will still be shinny and new six months later - only it’ll cost less to own!
-Extended warranties from big-box stores are a joke. This actually deserves it’s own post, I’ll post on this extensively in the future. Basically, with regular use, problems with electronics SHOULD show up within the first six months. And if it does, it SHOULD be covered by the manufacturers 1 year warranty(Disclaimer: The preceding statements are not meant as an all encompassing generalization. I know everyone’s situation is different. I know your mileage may vary. That’s why the word ’should’ is in bold and capital letters. Please do not flame me 
. End Disclaimer). If you really want to get an extended warranty - try to get it from the manufacturer directly.
-If you have access to a flatbed truck or an SUV, it’ll be cheaper to haul your booty back to you place. have a friend help, buy them lunch or promise to return the favor in the future. And in addition…
-Install it yourself. Make it an activity with friends and family. Sure some things are a little more complicated like hangning a flat screen on a wall and running cables behind it and may need professional installation. But placing a TV on a stand and connecting wires isn’t rocket science 
-Check online. Monoprice.com has been a happy discovery for me. No you won’t find ‘premium’ Monster brand cables here. But they have good quality and work just as good. And they are cost a LOT less.
-Was this a want or a need? Goes without saying, right?
What do you guys think?
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