Saturday, September 8, 2007

Warranties Can Be a Life-Saver

There are a lot of pros and cons out there about buying home warranties and extended warranties and such. I have become a big believer in them, and this year my home warranty saved my butt.

My air conditioning unit was on borrowed time--I can't believe how old it was, and my fear was it would go out on me and I would have to replace it. Some people who live in my building have had to pay as much as $3,000 when that happened to them, and generally I am not in a position to have that much money on hand to pay for a repair of that magnitude.

I know some people say, rather than paying the warranty premiums, just save the money and have it on hand--an emergency fund if you will--in case of needed repairs. That is all fine and well, and the best situation if you can do it, but it is hard to have that much in an emergency fund all the time. There have been times when I have had that much money in the bank, but when I have had to use it, it has been hard to replenish it.

All I know is that when in April my air conditioning broke, if I had not had the home warranty, I would literally be toast. My building is a hot building, and I think it would be impossible to be here when the temperatures start soaring. In April when this happened, it was only around 80-85 outside, and it was already sweltering inside. I was having trouble sleeping, and my pets were panting.

Imagine how it would have been this summer when temperatures outside reached 100 degrees F, and stayed that way for about a month! There would have been no way.

Apparently my bill in April would have been about $1,000 without the warranty, a bargain compared to the money others in my building have had to put out when theirs were on the fritz. But it would have been $1,000 more than I had, and I definitely would have been in a pickle.

With the warranty, all I had to pay was $55. I will bet my money on the warranty.

Wednesday, September 5, 2007

I did a bad, bad thing

I did a bad, bad thing, but for a good reason. I submitted a letter today, saying I needed to make a hardship withdrawal from my 401K for tuition and tuition-related expenses. Yes, I know it is stupid, because I have to pay a 20 percent penalty and 10 percent tax on it.

But there is really no other way for me to pay the expenses. If there were, I wouldn't touch it. I took this out of my small 401K at my new company. I would never touch my big 401K at my old company, the fund that is doing so well. So I feel better about that. My big retirement fund is actually doing well.

My justification is that I really, really need the money and I have no other way to pay the expenses. Also, I don't have to worry about the money every single day. Worrying like I have been doing can't be good for me.

So now I can rest easy. I can pay for my education.

And when I graduate, I can start putting a whole lot of money into my new 401K.

And I can feel good that I still have a really good 401K balance in my other fund.

So, maybe it is not so bad??

Sunday, September 2, 2007

Help for Those Facing Foreclosure

There has been a lot in the news in the last couple of days about what Bush wants to do for those facing foreclosure. He is getting a lot of flack about this from some quarters. I am no Bush fan (that is an understatement) but I do think that what he wants to do has some merit.

Yes, many of the sub prime borrowers probably shouldn't have had mortgages to begin with. But they were trying to own their own homes. And the lenders didn't have to approve them, but they did. Yes, maybe some of these people were in the subprime category because they are bad with money and can't manage it well. But it still seems like some forces beyond their control were at work here too.

Anyway, Bush is wanting to put in place some measure that will help some, but not all of those in trouble. I am not an expert at this, and don't know all the details, but from what I do know, I think it is a good idea. After all, if a bunch of people are suddenly in trouble like this, it can't be good for the economy, right?

There is also a group of people out there (as evidenced from some money message boards) who seem to think that these people should not be helped at all. After all, they say, we paid our mortgages, and we do things the right way--why should we help them out?

I understand what they are saying, but I always marvel at people who think they are ever above making a mistake or doing something wrong. Just because they haven't gotten into a mess yet, does that mean they never will? Bad things happen to good people.