When you spend your money, you want to get a good value for what you pay for. Your goal should never be to put out money for things that cost more than they are worth.
If you subscribe to spending this way, you will never get ahead financially. Unfortunately, there are some things where the line between cost and value get blurred and many people think they are getting good value for their money when in reality they are throwing money away.
5 Things That Cost More Than They Are Worth
I’m going to walk you through 5 things that cost more than they are worth. Make sure you don’t fall for these and you will save yourself a lot of money in the long run.
1. Tire Protection Plans
A tire protection plan sounds like a smart money move when it is being pitched to you. This is probably because you are paying close to $1,000 for a set of tires and you will do anything to save yourself some money.
But in most cases, tire protection plans cost more than they are worth. They only cover certain hazards and you better be able to prove that the reason for your flat tire is because of a covered hazard. Otherwise, you are paying for a new tire.
In addition to this, some plans even pro-rate the cost. This means that if you have a tire that is supposed to last 40,000 miles and you get a nail in your tire at 20,000 miles, the company isn’t giving you a brand new tire for free. They will instead knock off half the price since the tire they are replacing is half worn out and have you pay the difference.
You are better off just putting some money into a savings account dedicated to car repair and maintenance each month. Then the next time your car needs tires or other repairs, you have the money waiting for you.
Read More: 5 Things to Consider When Buying a Used Car.
2. Air Duct Cleaning
The ads for air duct cleaning make this service sound like a requirement. By cleaning out your ducts, you will have cleaner air in your house, get fewer colds and be healthier overall.
But the truth is many of these companies don’t clean air ducts right. They will just touch the surface of what you can see, so you think your entire system was cleaned when in reality only 10% was cleaned.
A true air duct cleaning not only cleans the intake, supply and return ducts, but also the registers and the parts of the HVAC unit itself, including the coils. In other words, no legitimate company can offer an air duct cleaning of your house for less than $100 that will effectively clean your air ducts.
Additionally, there has been no research that shows air duct cleaning leads to better health. But some experts think that cleaning your ducts could actually be harmful to your health.
This is because by scrubbing and scraping the ducts, built in mold and other contaminants on the air ducts could be jarred loose and blown into the air for you to breathe.
Unless you have animals living in your duct work or have done a house renovation, chances are paying for air duct cleaning is a complete waste of your money.
Read More: 4 Low Cost Ways to Improve Your Home.
3. Home Security Systems
Home security systems won’t deter a burglar from breaking into your house. They can simply smash the control pad and render the service completely useless. In addition, by the time the police show up to an alarm call, the majority of burglars are long gone.
Add to this most burglars never get caught, and you are paying for a system that doesn’t do much for you. You might argue that you can save money on your homeowner’s insurance by having a security system.
But most insurance companies only offer a 10% savings on your premium, which is much less than the annual monitoring cost of a system. And now some insurance companies are eliminating a discount because they know that these systems don’t deter thieves.
Now if you want to have a home security system because you will sleep better at night, this is another story. But otherwise, they cost more than they are worth.
Read More: 7 Frugal Alternatives to Home Security Systems.
4. Car Dealership Service
Unless your car is under warranty or is a highly specialized car, you are better off taking your car to an independent mechanic for routine maintenance and repairs.
The main reason for this is the cost. Dealerships charge a lot higher rate per hour than independent mechanics do. And with so many cars on the road, it isn’t as hard as it used to be for someone other than the dealership to get the right parts.
In fact, the independent mechanic might even use non-original equipment that will save you even more money.
In the past, when I owned a Honda, this is what I did. I took my car to an independent mechanic and always used non-OEM parts. They were virtually the same and you never could tell they weren’t from the original manufacturer.
And they lasted long too. I never had an issue where a repaired part failed prematurely.
If your car isn’t under warranty or isn’t a rare, classic car, then save yourself the money and skip the dealership.
Read More: How to Calculate the Total Cost of a New Car.
5. Basement Waterproofing
If your basement floods after it rains, you might think you need to install a basement waterproofing system. This will entail installing a sump pump and maybe even ripping up your concrete floor and installing a drainage system. Then putting down a new layer of concrete over the top of it.
But this cost is more than it is worth. You are better off looking at other options to stop your basement from flooding. After all, waterproofing a basement is only treating a symptom.
Every time it rains, you new waterproofing system needs to work flawlessly to ensure your basement doesn’t flood.
A better option is to make sure your gutters are clear and to potentially re-rout them so that the rain water is moved farther away from the house. You may also want to look into how your lot is graded and pay to re-grade it.
Doing these things will move water away from your house and drastically lower the chances of your basement flooding in the first place. The end result is you do not need to waterproof your basement after all.
Read More: 5 Overlooked and Expensive Home Repairs.
There are 5 examples of things that cost more than they are worth. Sadly, there are many more cases of things like this out there. To be a good consumer and only pay for things that offer a good value, you cannot rush to judgment and make rash decisions.
You need to take your time and think through the benefits and the costs to make sure you are getting good value for your money. While this won’t ensure you never waste any money, it will ensure you keep a lot more money in your pocket than if you didn’t think through your purchases.