The 1-2-3 Money Plan Part 9

Of course, most people want to watch shows on a large television screen, not a small computer screen. The easiest method to do that is to hook a laptop computer to a television with a set of cables. Which type of cables you need depends on the outputs from your computer and the inputs to your TV. I've found personnel at stores like RadioShack can be helpful in getting what I need in those situations, although the price of the cables might not be the lowest.

Standalone devices can help you watch online content on your television. Examples are a Roku player, Tivo and such game consoles as the Xbox 360 and Playstation 3. Among the big drawbacks of "going off the grid" with TV is the relative dearth of free live sports programming available online. Most streamed sports games are available by subscription only or are illegal to access.

Internet TV might not have all the content you want, but it could be a supplement. It might allow you to cancel cable and go with free antenna reception or drop to a lower tier of pay-TV service.

Fun Tangent: Don't Overpay for Audio-Video Cables.

One of the biggest rip-offs in electronics retailing is overpriced cables. These cables travel various routes, to and from the TV, cable or satellite box, receiver, DVD player, and speakers.

Here's a good rule: Go for digital over a.n.a.log when deciding among types of cables. But among brands of cables, feel free to cheap out. That could mean buying a $5 HDMI cable-the best connection for a high-definition TV-instead of a $100 HDMI cable.

Why? Because there's no difference in the quality of sound and picture you get from pricey cables. It's true that high-priced cables are high quality, made of good materials with good connections, and they look nice too. They're probably even more durable. But, as counterintuitive as it sounds, top-quality cables won't make your TV's picture or sound any better than cheap cables of the same type and gauge.

Don Lindich, a syndicated technology columnist and creator of SoundAdviceBlog.com, puts it this way: Buying expensive cables is like using Evian bottled water to flush your toilet. It might be top-quality purified water, but it doesn't flush the bowl any better than tap water.

For example, if you have a newer HDTV and cable box that can use an HDMI connection, use it. It's higher quality than other connections. But don't spend $75 or $100 on a cord. Discounters, such as Wal-Mart and Target, often sell reasonably priced cables. Perhaps the best combination of price and quality is available at online retailers, such as Monoprice.com, where I got a 6-foot HDMI cable for $5.24 plus s.h.i.+pping. It works great. Amazon.com too often has high-quality but inexpensive HDMI cables.

The same goes for wires to speakers. For runs of 50 feet or less, 16-gauge electrical wire-even if it's lamp cord-is all you need. Gauge matters. Brand does not. However, you can't totally cheap out on cables and speaker wire running inside of walls. In many areas, building codes require the wire to be rated for "in-wall use," a feature easily found on packaging or retail displays.

Internet Access.

You'll notice many of the suggestions in this book are tightly tied with looking up information on the Internet. So having at least a slow-speed dial-up connection is a good idea. Of course, you could use free Internet access at a library or wireless Internet access at public "wi-fi hot spots," such as a coffee shop.

However, having Internet access at home is convenient. Internet service can help with skillful shopping, which will save far more money than access will cost.

You'll need to evaluate what Internet service providers (ISPs) are available to you. Generally, it will be through your phone line or cable line, although plans to roll out wide area wireless networks are in the early stages. Internet access via cell-phone networks is also becoming more common. You can get Internet access via satellite, but that's traditionally been an expensive option, making sense only for those without other choices, such as people living in very rural regions.

Availability of these Internet-access options varies among communities. If you're uncertain which to choose, seek advice from a tech-oriented friend or relative who lives nearby.

This is one area I would not skimp on. Get the fastest Internet service you can reasonably afford.

So, again, the big-picture idea with telecommunications is to stay informed about the new offerings and prices. That way, you can rightsize your spending for what you actually use.

Chapter 4.

How to Buy Stuff.

"How to buy stuff?" you might be asking yourself when you read the t.i.tle of this chapter. "Believe me, I don't need advice on how to buy stuff. I'm great at that. I need to know how not to buy stuff!"

But the truth is this: Buying things well is difficult if you don't have specific routines and some practice at doing it right. You'll regularly be buying thousands of dollars worth of goods and services for your entire life. You'll have needs, such as tires for your car, a plumber for a leaky faucet, and new eyegla.s.ses. You'll have wants, such as a new television set, a second fabulous pair of black shoes, and a Caribbean vacation.

The point is to spend your money smarter on all of those things.

That segues into a discussion of needs and wants. It's so easy to confuse the two things. But learning the difference is "how not to buy stuff."

We need basic food, basic clothing, basic shelter, and basic transportation. Upgrades to those things are wants. Wants come in the form of dining out, name-brand clothing, a 3,000-square-foot house, and a sporty new sedan. All your entertainment spending is a want. Wants include vacations, video games, music CDs, cable television, and every piece of jewelry you own.

I'm not saying you should only spend money on necessities and deprive yourself of wants. I'm just saying you must be very clear in your mind about the difference. Then each purchase you make starts with an evaluation of the need and is upgraded with wants.

This reminds me of a business term, zero-based budgeting. The problem with typical budgeting is that the amount budgeted for future spending is strictly based on how much you spent in the past. The only debate is about whether your department's budget gets 3 percent more or 5 percent more. It's incremental budgeting. There's no examination of what you actually need, only how much more you'll spend in the future. After a few years, how much you're spending can be completely divorced from what you need to spend.

Meanwhile, zero-based budgeting is starting from scratch, or zero. All spending-the category of spending and the amount-has to be entirely rejustified. It's about building up your expenses from zero, rather than cutting down expenses from current levels. Or, as we've talked about, it's about whether a purchase is truly needed or we're just buying because that's what we always do.

That's a long way of saying that it's important to stay grounded. Make conscious decisions about whether you can get by with a functional brand or whether it's worthwhile to upgrade.

Some people say, "Well, I only buy the best for myself and my family. We deserve the best." Besides being silly and immature, that statement is illogical. Almost n.o.body outside of the likes of Bill Gates and Warren Buffet has enough money to have the best of everything. So we choose. Ideally, we choose by starting with needs and judiciously adding our wants.

One of the great by-products of spending your money smarter is that if you spend well on your needs, you'll have more money left for your wants.

Each section in this chapter gets straight to the point, with each starting with "How to..." In total, they are "How to buy stuff."

How to Buy Products.

Is shopping around for products worth your time? You bet. And today it's easier than ever because of online reviews and price comparisons. Buying stuff breaks down into the three Rs: Read reviews, research prices, and reevaluate.

How to Buy Products, 1-2-3.

1. Read reviews. Visit ConsumerReports.org, ConsumerSearch.com, and Amazon.com.

2. Research prices. See Froogle.com, MySimon.com, and Shopzilla.com.

3. Reevaluate. Wait a day before buying.

Granted, you don't need a three-step process for onetime purchases of less than $50, for example. But for bigger purchases or purchases you make repeatedly, it's well worth it.

A recent search for a Garmin Nuvi GPS navigator, like the one mentioned in the introduction of this book, turned up a variety of prices. The exact same model could cost anywhere from $345 to $900. That's a heck of a difference. How long did it take me to get that information? Less than 10 seconds on MySimon.com. Is 10 seconds of your time worth a $555 savings?

I'm not saying you should necessarily buy the least-expensive item for $345, especially if it's offered by an unfamiliar retailer with an amateurish Web site that doesn't pa.s.s the "smell" test for being legitimate. If one retailer is offering a price far below all the others, there might be something fishy. But after those well-invested 10 seconds, you'll have an excellent idea about the range of prices for that GPS system.

Armed with that knowledge, how likely are you now to visit a retail store and pay $900, knowing the average price is half that? Unlikely.

Granted, that was a fun example using a "want" item, a GPS navigator. But you can use this system on needs too.

1. Read Reviews.

Some people are born researchers of products, while others are impulsive buyers of them. But if you'll be spending significant money, whatever you determine that to be, research can help you choose the right product.

The right product means one that fits your needs and is likely to be high quality. n.o.body can be an expert on every purchase. You might know a lot about automobiles, but nothing about buying dishwashers. Perhaps you know a lot about cell phones, but nothing about buying a baby stroller.

Just as important, some quick research can reveal the range of possibilities within a product line-which features come with which model.

Just a generation ago, research was laborious. Maybe you visited several stores and talked to salespeople about the product. But if you need to buy a lawn mower, are you really going to visit a garden center and ask the salesperson which model you should buy? Salespeople can be very helpful, although it seems nowadays far less so. A salesperson has conflicting interests. He might have a genuine desire to do right by the customer. But a commissioned salesperson makes more money if he or she sells you a more expensive model of lawn mower, regardless of whether it's right for you.

So you need objective advice, or at least a variety of opinions, to make a smart spending choice.

Consulting a friend or relative is a good idea, as long as you realize that's just one person's experience and not the final word about the product. In the past, you could subscribe to Consumer Reports magazine, which has in-depth reviews. But you would have to wade through dozens of saved magazines trying to find the review you sought.

Because it was so difficult to find reviews, maybe you heavily researched purchases of homes, cars, and a few big-ticket items. And for the rest, you just winged it.

Today, because of the Internet, it's all different. You can research almost anything quickly.

For example, now, you can subscribe to Consumer Reports' online site and have instant access to reviews.

Rarely do I suggest spending money in order to save it. But an online subscription to Consumer Reports, found at www.consumerreports.org, is an exception. At the time of this writing, a subscription is a mere $26. That's a small price to pay for the outstanding product reviews and advice you receive. The advantage of the Web site over the magazine is the site is easily searchable. You can find the review you seek, even from years ago, in mere seconds.

The Consumer Reports site also offers blogs on such topics as cars, electronics, and products for babies and kids. Blogs are brief news items stacked chronologically, with the newest on top.

ConsumerSearch.com is another good resource. It's an aggregator of product reviews and gives a summary of what all the reviews seem to be saying. It's an efficient stop on the Web to get a lot of information quickly.

Mega online retailer Amazon.com is a good place to find reviews from actual users. Because Amazon.com sells a wide variety of products, it's worth a place in your Web browser's Favorites list, even if you never make a purchase from the retailer. Read a sampling of the good and bad reviews. But with user reviews, take comments with a grain of salt. Pay more attention to comments repeated in several reviews. Many retailers have user reviews on their Web sites now. So, if you were going to buy a particular model of LCD television, you might check large electronics retailer Best Buy to read reviews of the product on its site.

Another way to find reviews is to use your favorite search engine, such as Google.com. Type keywords that include the name and model of the product and the word "review." You'll likely find several reviews.

After a while, you'll find review sites that you like. For example, I like Cnet.com for reviews of electronics and software. Automobile reviews are available at such sites as Edmunds.com and Cars.com.

But if you want to keep it simple, check reviews at ConsumerReports.org, ConsumerSearch.com, and Amazon.com.

2. Research Prices.

The point of price comparisons is to know what a good price is. Blindly accepting the first price you see is a conscious decision to be powerless as a consumer. In most cases, it's voluntarily paying more than you have to. And, come on, that's just plain dumb.

Again, we'll turn to the Internet to compare prices efficiently.

Among my favorite Web sites is Froogle.com, also known as Google Product Search. If you type a specific product into the main Google search window, a sampling of the product search results will appear on top. You can click through to view more. I also like MySimon.com and Shopzilla.com. These are all s...o...b..ts, like robots that go searching for prices on the Internet.

After visiting just a few s...o...b..ts, which literally could take about one minute, you'll have an excellent idea about the range of prices an item is being sold for. Be skeptical of prices that are far lower than others, especially if you click through to the retailer and the Web site looks amateurish. Included in some price comparisons will be refurbished products and listings on auction site eBay.com. So view those listings differently than new products from well-known retailers.

Speaking of eBay, that's also a prudent stop in your quest to find good prices. Many items are offered as new on eBay and are worth considering if you'll receive a deep discount in return for taking the risk of dealing with a person or merchant who might not be reputable. I've had good luck buying new items on eBay.

Just because you're searching online for prices doesn't mean you have to purchase online. You could still purchase in person locally. But knowing what a good price is before visiting a store arms you with information.

Opt for s...o...b..ts that include taxes and s.h.i.+pping charges. That way, you can get apples-to-apples comparisons on the total price of acquiring that product if you decide to buy it online.

You might find s...o...b..ts you like better, but good places to start are Froogle.com, MySimon.com, PriceGrabber.com, and Shopzilla.com.

QUICK TIP.

One promising service is Frucall. If you're standing at a store looking at an item and wondering whether it's being offered at a good price, you can find out. Pull out your cell phone and call 1-888-DO-FRUCALL and enter the product's barcode number. The automated service will recite several prices from online retailers. You can also get the information by text message or by going to a Web site. Find out more at Frucall.com.

3. Reevaluate.

We Americans generally aren't good at delayed gratification. But try to wait a day or more between wanting to make a purchase and actually making it. That delay gives you time to reflect on the needs versus wants issue I talked about earlier. Waiting helps mostly with optional purchases. But it also gives you time to reflect on a purchase you need but were thinking about upgrading, by buying a brand name or a product with more features.