Canadian Finance Blog

Upgrade Instead of Replace to Save Some Money

Posted: 18 Jan 2012 02:00 AM PST

We live in a world of disposable goods. Plastic water bottles, paper towels, IKEA furniture. We’ve been taught to purchase things, expect a short lifespan, and then throw them in the trash when we are done with them. Even if you ignore the environmental and moral aspects, there’s a huge financial aspect to embracing disposable goods. Plastic water bottles may only cost fifty cents each, and a reusable glass container may cost 10 or more dollars. You can, however, simply wash the glass container and use it for the rest of your life. Those plastic water bottles will add up, fifty cents at a time. Paper towels, also, don’t cost much individually, but a wash cloth can be cleaned and reused. Again, a larger initial cost but resulting in a long term benefit. IKEA furniture is cheap at first, but if you move around at all, you’ll find that the durability of the good is less than ideal.

So what’s the solution? Always purchase the most expensive goods? No, probably not. Purchasing the best value you can afford is always a good ideal, but you probably have some other purchases that at the point of no return. What to do with them? In some cases, it would be good to replace the item in question, as over the long term, it will be better than trying to patch an item that’s just no longer worth it. In other cases, you can often get by with keeping the product, and perhaps just complimenting or upgrading it.

Generally speaking, if the cost of the upgrade is more than the cost of a new product, it makes sense to purchase the new product. If the cost of the upgrade is less than the cost of the new version, then it can make sense to simply upgrade or compliment your existing item, assuming that the upgrade gives the product a longer life expectancy. Let’s look at a few examples.

Tune Up and Repair Vehicles

Automobiles are an item that is very expensive, so most of the time, a simple upgrade can be all you need to keep your car on the road. For example, if you’re feeling like your car just isn’t good enough anymore, instead of looking at new models, see if there’s something you can do to make your existing car better. Not enough storage space? You can add a roof rack. Not “fast” or “peppy” enough anymore? Take it in for a tuneup! Not right for your climate? Invest in winter tires/summer slicks and you’ll feel a world of difference on the road. There’s almost always a less expensive option than purchasing a new vehicle. The tricky part with cars and trucks is when it comes to repairs. When is it worth it to repair the vehicle, and when should you just bite the bullet and get a new car? It’s always tough to say, but the general rule is that when the cost of the repairs exceeds the worth of the vehicle, there’s no point in repairing it. Save your money for an eventual new purchase.

Upgrade Computer Parts

The cost of a computer is constantly dropping. Again, you should be able to simply upgrade your computer before you have to replace it. Is it less than 3 years old? Then it’s worth repairing/replacing. A computer can feel like new again after a format of the hard drive. It requires a little work, but it costs nothing if you do it yourself and can give your computer another year or two. If it still feels sluggish, the cheapest upgrade is adding more RAM. RAM is very inexpensive these days, so it should be <$100 to upgrade your computers RAM. Hard drive prices are insanely high right now, but Solid State Drives (SSDs) haven’t risen as much in price. Consider upgrading your computer with an SSD to get a noticeable speed performance in booting and application loading times. If it’s a desktop computer, make sure that it is clean on the inside. Dust buildup can greatly reduce performance, so get some compressed air and clean it out. If, however, the computer is simply outdated, then the price of a new computer should be low enough that it will be worth replacing entirely.

House Renovations

Sometimes you simply outgrow your home. Are you living in a two bedroom basement suite with six children? It’s time to get a new home. Do you already own your home but it just feels too small? Consider seeing if there’s a renovation that you can do that would greatly improve your living situation without having to sell and purchase a new home. Have an office that’s rarely used? Convert it into another bedroom. Have some extra land next to the house? Consider the cost of building another wing onto the house. Just sick of where’s you’re living? Think about re-doing the floors, painting the bedroom, or any other small upgrade in order to make your place feel new.

When is it worth a new purchase, and when it is worth upgrading?

Upgrade Instead of Replace to Save Some Money originally appeared on Canadian Finance Blog on January 18, 2012.

Canadian Finance Carnival #71

Posted: 15 Jan 2012 02:00 AM PST

Budgeting

CF at The Outlier Model presents How to make a budget that works, saying “Creating a budget that works can be a difficult task, if you don’t know where to start. This simple ‘how-to’ guide will get you started on creating a basic, balanced budget. Laying out your income and expenses is the first step towards improving your financial health and living a better life.”

Career

Ashley at Money Talks Coaching presents Unemployment Benefits for the Self-Employed?, saying “I was poking around the internet the other day and came across this article in Time and learned about a new unemployment policy for the self-employed. Here is my take on it:”

Penny at Penny Pinching Professional presents Writing a Resume, saying “Your resume is an important part of finding a good job so you can make money. Do you know the most important information to include in your resume?”

Martin at Studenomics presents 7 Laws of Working For Yourself, saying “What to consider if you want to branch off on your own.”

Debt and Credit

A Blinkin at Funancials presents Should I Cancel My Credit Card?, saying “Over the last few years, Credit Reporting has gotten a lot of attention in the media. Part of it due to the Dodd-Frank Financial Reform Act, but I also give a lot of credit to the jingles of Freecreditreport.com. Although I love the commercials, I’m not a huge advocate of the website. “

Erika at Newlyweds on a Budget presents Paying down student loans, saying “The following is a guest post. My student loans stand at approximately $22,550. I originally had about 9 different loans, but I ended up consolidating them. Debt consolidation loans help minimize the payment you have to pay, which was a huge help back when I was a broke college graduate.”

Daniel at Sweating the Big Stuff presents How I Made Money on a $371 Visit to the Mechanic, saying “After bringing in my car for maintenance, I was given a loaner for a 1,000 mile to and from San Francisco. Just how much money did that save me?”

Corey at 20s Finances presents Different Types of Financial Aid, saying “Learning the different forms of financial aid can make all the difference in reducing your college debt.”

Beating Broke at Beating Broke presents Suze Orman Release Prepaid Debit Card. Wait, What?, saying “Phil, from PT Money, blasted Suze for the card, on his site and on twitter. I can't say that I entirely disagree with him. His problem with the card, and mine, is that prepaid cards should be a last resort for people who are unable to get a bank or Credit Union account that has a debit card attached to it. “

Philip Taylor at PT Money Personal Finance presents Suze Orman’s Pre-Paid Debit Card – The Approved Card, saying “Discusses whether or not Orman’s pre-paid debit card is a good financial product for the middle class.”

Janet at Credit, Eh presents The House That Credit Card Rewards Built [Infographic], saying “A rewards credit card can be just the thing to help you earn cash back, get free stuff, and enjoy an upgraded lifestyle. Before you get too excited, though, it’s important to understand that your credit card rewards are basically worthless if you carry a balance.”

Mike at Rewards Cards Canada presents CIBC Petro Points MasterCard, saying “The CIBC Petro Points MasterCard is a no annual fee rewards credit card that lets you save 2 cents off every litre of fuel at participating Petro-Canada stations across Canada.”

Economy

Big Cajun Man at THE Canadian Personal Finance Site presents Unemployment Up to end 2011, saying “Unemployment numbers are not encouraging to end 2011 in Canada.”

Extra Income

Justin at Money Is the Root presents Blog Goals and Updates, 2012 – #1, saying “Welcome to the 2012 blogging updates for Money Is The Root. Just as last year, I will provide weekly updates on my site statistics, blogging income, and intended goals for the short and long term. These posts will provide ongoing updates regarding my progress on my three blogs, and perhaps more in the near future, as well as achieving $30,000 in online income this year.”

Cash Flow Mantra at Cash Flow Mantra presents Investing in Guaranteed Losers, saying “How about investing in a guaranteed winner? That is exactly what I plan on doing this year. In fact, I will be getting a return of over 20% by paying off my Discover Credit Card. “

JT at Grand Per Month presents How to Make $1000 a Month as a Personal Trainer, saying “Here is how to make $1000 a month as a personal trainer working just 15 to 20 hours extra per week.”

Sunil at The Extra Money Blog presents The Correct Way to Edit a Blog Post: Avoid Search Engine Penalties, saying “While there is nothing wrong with editing an older blog post, the way you do it makes a big difference to avoid search engine penalties.”

Marie at FamilyMoneyValues at FamilyMoneyValues presents Growing Your Blog with Staff Writers, saying “Answers from real live bloggers who use staff writers on : the benefits of using staff writers; management tasks related to use of them; payment and legal aspects of their use; and the blog results seen from using them.”

Frugality

Steve Zussino at Canadian Personal Finance presents Have you ever seen a frugal celebrity?, saying “Actress and celebrity Zooey Deschanel recently showed that she earns an average of $95,000 a month and her expenses average $22,550 per month. This means she saves 76% of her income!”

Steve Zussino at Grocery Alerts presents Totally Plastic Free Challenge for 2012 – No credit cards, saying “Our first challenge will be going plastic free (no credit cards). As many, we to use our credit cards to purchase goods to accumulate airmiles. This year we have decided to move away from this method in order to completely remove that cushion that exists with plastic. No matter how well you budget, using credit cards gives you a false sense of security.”

Amanda L Grossman at Frugal Confessions presents A Great Site to Sign up for Email Offers, saying “Learn about this great tool to hone your frugal skills like I do!”

Money Cone at Money Cone presents It Never Hurts to Ask, saying “I recently bought an electric razor from Amazon. Within a couple of days, the price of the same razor dropped by 25%! Even though Amazon’s policy is not to refund the difference, I decided to call and ask.”

Annabelle at Shopping Detox presents Marilyn Monroe: the frugality audit, saying “Marilyn Monroe, secret thrifty genius bookworm!”

D.J. at The Family Wallet presents How to Save When Hiring Professional Movers, saying “There are a number of ways you can cut down on the expenses associated with hiring professional movers.”

Young and Thrifty at Youngandthrifty presents Save $750+ on Shaw Cable and Internet by being a (Starving) Student, saying “Students must get some sort of a break on cable, seeing as students have no income and yet need some sort of distraction from studying. Students also need internet. They must give students a break!! Stay young and thrifty =)”

Teacher Man at My University Money presents My Sirius/XM Discount Journey, saying “I constantly amazes me what the mark up is on certain products and services, and how much money you can save by remembering that Everything Is Negotiable! I've saved little bits of money on monthly services such as my phone, internet, and television costs before, but my most recent frugal adventure came courtesy of my new satellite radio.”

Pam Whitlock at The MoneyTrail Blog presents You Cancelled What? LIfe Without 200 Channels, saying “In an effort to trim up our budget, we cancelled our cable TV. We are saving money and rediscovering hobbies. Our four kids, however, put their financial skills to work and presented us with another option.”

Steve Zussino at Grocery Alerts presents Complete Guide on where to find coupons?, saying “One of the most common questions we receive from our readers, is where can I find coupons? Coupons are everywhere that once you become consciously aware of coupons you will spot them in the most unlikely places. It also depends on how much time you spend and how hard you look for them.”

Steve Zussino at Canadian Personal Finance presents Free tax filing software in Canada, saying “Tax season is getting started and it is time to start thinking of your RRSP contributions and tax free savings accounts. My favorite tax software, StudioTax, has released their free pre-certified version and I wanted to share reasons why it rocks!”

Investing

LaTisha at Financial Success for Young Adults presents Little Futures on the Prairie, saying “Do you remember Little House on the Prairie? If Pa had known about the futures market he could have made money selling a futures contract. Futures introduction.”

Doctor Stock at Invest in the Markets presents Diversification Strategy, saying “Diversification strategy isn't a phrase that should scare you, even if you are a new investor, because it doesn't have to be complicated. After all, it's really a simple way of saying, "Don't put all your investment eggs into one basket." Simple, right? Truly, it is. In fact, you're better at this than you might think. All you likely need are some guidelines to help you get started… and stay on track. So, let's do this… together.”

Kevin at Invest It Wisely presents Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, saying “Andrew Hallam is an excellent teacher, and he continues to inspire and motivate me through his passion toward finance and life. He uses humour and anecdotes to get us interested in the message, and then to show that he's serious, he backs it up with a comprehensive set of references and research.”

Sustainable PF at Sustainable Personal Finance presents Why Do Dividend Stock Investing?, saying “Not sure if dividend stock investing is for you or you think it is too risky? Consider the following reasons on why this type of investment tool can help build personal wealth while minimizing potential risks.”

Ken Faulkenberry at AAAMP Blog presents Portfolio Management: Part I of Series on Investment Risk and Returns, saying “Exhibits and provides examples of the importance of understanding investment risk and return in portfolio management.”

Boomer at Boomer & Echo presents Is An RRSP Loan Necessary?, saying “If you simply don't have the money to come up with an RRSP contribution you may think that getting an RRSP loan is the only solution.”

Pierre at Intelligent Speculator presents The Biggest Investing Mistake I've Made…, saying “A story from an investment gone wrong.”

Div Guy at The Dividend Guy Blog presents Best Canadian Dividend Stocks for 2012, saying “The best dividend stocks to watch out for.”

Green Panda at Green Panda Treehouse presents What's Your Investment Strategy?, saying “What’s your plan for your money?”

Lifestyle

Matt at Living in Financial Excellence presents DIY Project Gone Wrong, saying “A few months ago I wrote a post about whether the benefits of hiring a professional outweigh the frustrations of trying to do a project yourself. In that post, I mentioned we had skilled friends who knew what they were doing and had the right tools. In today's show I share a personal DIY project that went wrong. Big time. And it cost me a bunch more than it would have to hire a professional.”

Jason at Live Real, Now presents Deathbed Regrets, saying “A friend recently pointed me to an article written by a hospice nurse. This nurse spent her career working with people who were dying, beyond recovery, and aware of it. Her job, primarily, was to provide comfort, whether that be physical or emotional. During her conversations, she found several themes when her patients discussed their regrets and she lists the 5 most common regrets in her article.”

Mr. Money at Smart on Money presents The Cost of Resolutions, saying “The New Year is here and we are all striving to get ourselves off on the right foot by committing to the right resolutions. However, not all resolutions are created equal. While most will improve your health or your mental well-being, there are a few in particular that will save you thousands of dollars over the course of your life in addition to improving your mental and physical well-being. A few of the most cost-effective New Year's resolutions include:”

Miss T. at Prairie Eco Thrifter presents How to Make a Relationship Last, saying “A relationship takes work by both partners if it is to be fulfilling and lasting. As years go by, people change and this means that the relationship is going to change too. Here are some tips to help you understand how to make a relationship last.”

Marie at Money Spending Mommy presents What’s The Worst Money Advice You Have Ever Heard?, saying “We are not all financial experts. When we are faced with important life decisions regarding financial matters, we approach professionals to advise us on the best route to take. Unfortunately, we do not always get sound advice.”

Jon the Saver at Free Money Wisdom presents 4 Ways Colleges Are Ripping Students Off, saying ” Most of the high priced items on campus—such as textbooks, meal plans and student parking—can be avoided if you know about the alternatives. And because I don't want you leaving college with a huge student debt—beware of the following high-priced college cons on your student campus:”

Sabrina at Frugal Living presents 5 Emergency Budget Cuts to Consider, saying “We would all be better off if we forced ourselves to look honestly at our spending, our credit cards and our bank accounts, and identify the things that can be cut out easily and immediately. That will buy you more time if you do lose your job or take a cut in your income, and will help you stretch the money you have. Every family is different, but the list below will give you some ideas to start with.”

Barbara Friedberg at Barbara Friedberg Personal Finance presents Why I Don’t Want a Smart Phone, Tablet, or eReader, saying “Although some may see it as a financial decision, my choice to forgoe smart phones, tablets, and eReaders is a lifestyle choice. I do not need to be connected 24/7. Read more about this personal decision.”

Glen Craig at Free From Broke presents Do You or Your Spouse Handle the Finances Solely? Why This Might Not be a Good Idea , saying “It’s pretty common to see one spouse handle the finances solely in a relationship. Usually the other spouse doesn’t want to know about them. See why this isn’t a good idea.”

W at Off-Road Finance presents Leaving The Middle Class, saying “A look at what it means to leave the middle class and become rich.”

Mike at The Financial Blogger presents How I Will Take Control of My Finance in 2012, saying “My plan for owning finances in 2012.”

Real Estate

Jester at The Ultimate Juggle presents Easiest Way to Make a Profit in Real Estate, saying “Investing in real estate can be a great way to set yourself up for the future. If you invest in the right property at the right price, you can create a positive cash flow from the beginning. “

PITR at Passive Income To Retire presents Is it Possible to Retire on Rental Properties?, saying “Not only is it possible to retire on real estate, there are many benefits that you need to take advantage of.”

Darwin at Darwin’s Money presents No Cost Refinance – A No-Lose Financial Move?, saying “A no-cost refi is starting to make more sense to me now that I’ve read more about it, and I was especially surprised to see the number of no-cost refinance companies out there. I’ve been contemplating a refi for some time now and had initially put it off due to the exorbitant fees…”

Retirement

Andy at My Retirement Blog presents Retirement Planning Requires Action, saying “If you are starting to think about your own retirement, you are on the right path. You have taken the first step towards achieving that dream retirement. You may need to spend some time writing down your goals and/or expectations for retirement, but asking the questions is where everyone begins. Yet, just thinking about retirement”

Jeffrey at Saving Advice presents Retirement Planning: Consider Your Time as Well as Your Money, saying “The biggest problem in retirememnt is what to do with your time. Most of us can't wait to quit working, but once we quit, what do we do? We say we want to travel, spend time with family, play golf, or just sit on the porch, but after a lifetime of work is that enough? “

Ray @ Financial Highway at Financial Highway presents RRSP Deadline 2012-Limits , saying “The RRSP season has begun! Every bank, every branch and every teller will remind you to contribute to your RRSP before the deadline. With so many people vying for your RRSP contributions, who should you trust? “

Saving

YFS at Your Finances Simplified presents Our Net Worth Increased By 125k in 1 year, saying “So last year turned out to be really good for the YFS household. How good? Well I’ll let you decide. At the start of 2011 our net worth was $122,403.43. At the start of 2012 our net worth is $246,756.54! That is s serious gain, IMHO!”

Kyle at The Penny Hoarder presents Get Paid to Reduce Your Energy Usage, saying “There are some money-saving ideas that you’ve no doubt heard a million times. Some of the most oft repeated tips are how to reduce your energy bill. Turn off the lights. Lower the thermostat in the winter. Buy an energy efficient water heater. Those are all great ideas, but one company is taking it a step further to help motivate us. Read on to learn more!”

Lisa at Thriftability presents Save Money on Insurance: Simplify by Bundling, saying “As the quest continues to save money on insurance premiums, individuals and families may be overlooking a common method to doing so. Going with one company could just be the ticket, not only for the health of your bank account, but also to make things just a bit simpler.”

Evan at Smart Wealth presents A Financially Responsible 2012, saying “I have decided to set goals for my wife and I in order to have a financially responsible 2012 and save for our future as we want to grow our family.”

Taxes

Matt at RamblingFever Money presents Common Sense Commentary on the Government Welfare State, saying “Some of us Americans have a stereotype that Canada’s society runs in a socialistic or even welfare state. This post highlights one American’s complaints about the abuse of our government welfare system. I wonder if Canadian’s have similar complaints about theirs?”

Peter at Bible Money Matters presents Do I Need to File a Tax Return? It Depends on a Variety of Factors, saying “In some situations people may want to go through with filing even if they're not required because they may be entitled to a refund of taxes paid, or they may qualify for a refundable tax credit of some kind. Found out that you may not need to file for 2011? You may want to if you're eligible for refundable tax credits like the following.”

Tushar at Everything Finance presents Finding an Accountant If You Are a Blogger, saying “As a blogger watching your blog grow and earning money is rewarding. However, once the blog grows beyond a hobby, you need to consider the tax implications. Hiring an accountant who understands the blogging world is essential.”

Other

101 Centavos at 101 Centavos presents Interview With Foster Wilson of MESA EXPLORATION, saying “Mesa Exploration formerly Mesa Uranium is a junior exploration company active in Utah and Arizona. I bought shares of MSA MSJAF on the pink sheets …”

Suba at Broke Professionals presents How to Prepare to Give an Effective Presentation, saying “Presenting ideas, products and information is an integral part of being in business. Whether you are trying to convince the boss to give you a raise; nudge your customer into buying the latest shiny product the company makes; or pry venture capital lose from an angel investor, you need presentation skills. Read on to lean my thoughts.”

Wayne at Young Family Finance presents Appropriate Tip, saying “Find out what an appropriate tip is when you are eating out. How much are you overspending?”

KT at Personal Finance Journey presents Should You Leave a Life Insurance Policy to Your Kids?, saying “Determining whether or not to purchase a life insurance policy is a big decision. Many of us want to leave something behind for our family, but there are a few things you need to consider before taking on a monthly premium!”

Aloysa at My Broken Coin presents Would You Date a Guy From a Trailer Park?, saying “I try not to judge a book by i’s cover because usually the cover very seldom reveals what is written inside of the book. A few years ago I passed judgment on one of my good friends based on a social stigma. Read my social class dilemma!”

Eddie at Finance Fox presents Reasons to Buy a Car in January – After the Holidays!, saying “Consumers used to shop heavily during December in order to reap the great rewards from the retailers. However, times have changed. Consumers are getting more wiser and January has also become a hot month for retail therapy.”

Don at Money Reasons presents Home Security! Deciding to Spend or Not to Spend, saying “It’s Jan 1, 2012 at 4:14am, my dog started barking like an entire gang was at my front door trying to break in. Much like the dad in Clement Clarke Moore’s poem, Twas the night before Christmas, I sprang out of my bed in an adrenaline pumping state ready to encounter whatever threat might exist.”

Julie at The Family CEO presents A Masterminds List of the Top Ten Posts of 2011, saying “Check out my 10 most popular posts for 2011″

Don at MoneySmartGuides presents The Real Cost of Eating Out, saying “I was looking over my budget for the previous month and something stood out. At first, I thought I made a typo along the way. Maybe I categorized a purchase incorrectly somewhere along the way. After checking and rechecking and I discover the real cost of eating out!”

Shaun at Smart Family Finance presents Crash Course in UCC Check Indorsement Rules for Newlyweds and Why You Should Never Use ‘And’ or ‘&’ When Writing Checks to Newlyweds, saying “Newlyweds face unique complications in cashing wedding checks thanks to the ambiguity of name changes. Learn what the UCC rules are for signing and cashing checks and never put the word and or & on a check to newlyweds”

Hank at Money Q&A presents Seven Car Insurance Myths You Need To Know, saying “There are a lot of car insurance myths that continue to be spread around by consumers. It is important to understand as much as you can about how your car insurance rates are calculated and to debunk the popular car insurance myths.”

SB at One Cent at a Time presents 25 Everyday Techniques to Save Environment, saying “These are 25 pretty easy-to-follow ways to help our mother earth by saving the environment around us. Charity begins at home, you start today, your neighbor starts tomorrow and the whole city starts doing this by year end, how about that?”

Canadian Finance Carnival #71 originally appeared on Canadian Finance Blog on January 15, 2012.