Sunday, July 20, 2008

Saving on Repairs: A Few Simple Questions That Can Save Hundreds of Dollars

When I have to get something repaired - whether it be my dishwasher, car, lawnmower or leaky faucet - I've started asking a few simple questions that are starting to reap benefits. Here's what they are (specific to my lawnmower):

Question #1: When people bring in a lawnmower that won't start, is it typically the same few trouble spots 80% of the time? (They almost always answer "Yes!")

Question #2: What are the typical problems? (Example: clogged air filter, low oil, needs new spark plug.)

Knowing the answers to these questions for my plumbing, lawnmower and furnace (change the dirty filter!) saves me hundreds of dollars.

Example: Yesterday I took my pushmower, which wouldn't start, to the cheap-o repairman down the street who works out of his home (I reasoned: "low overhead can lead to lower prices.") I asked him the questions, to which he replied, "new spark plug, clean air filter, change or put in new oil."

You might think people would be reluctant to share their secrets, but I find them honored by asking for their wisdom within their area of expertise.

Next, he said he wanted to pull off the air filter to check the carburator, so that he could give me a better estimate as to what the repair will run me. As he looked into it, he grimaced to inform me that the carburator was all black, indicating that he'd need to rebuild the carburator. Also, he'd need to do a full service (filters, plug and oil), and oh yes, that blade needs to be replaced. The bottom line - $100 worth of repairs.

It was my turn to grimace as I told him politely that I'd rather not spend so much on something I could buy new for $135, so I put the mower back in my car and went my way. On a whim, I stopped at an Auto Zone and purchased a new spark plug for $1.50. When I got home, I put in the new plug (about a two minute process) and cranked it up. It hummed like a new machine and has worked fine ever since.

A couple of things about that episode keep reminding me of the word "shyster." First, he didn't want to replace the carburator - he wanted to "rebuild" it, meaning that if he did nothing to the existing carburator, I would have never known without being a mechanic and taking it apart. Second, call me a mechanical idiot, but a mower blade has a lot in common with a knife - if you sharpen it and it cuts stuff, it probably needs no further repair.

So, whether I'm dealing with honest repair people or shysters, here are my lessons learned for saving money:
  • You often don't have to know everything about a product to be able to do simple, routine repairs.
  • Doing a simple repair myself gives me a wonderful feeling of independence and "beating the system."
  • I can often save myself loads of money - in this case, $98.50, which might be the equivalent of $200 earned, once FICA and taxes are taken out of your earnings.
  • Keep asking the question, "What are the most common repairs that most people need?" The answers may save many thousands of dollars over a lifetime.
  • Don't brag to your wife or mother after you've made a successful repair. They'll start asking you to fix everything.
Other ideas for saving on routine repairs? Post some ideas!

Making More by Saving More: How I Plan to Make $2000 More Dollars This Year With My Writing

I plan to save $1500. That's it.

No, the difference in numbers isn't a typo. Let me explain.

Money management gurus drive home the need to curtail spending. They often put it this way:

"A dollar saved equals two dollars earned."

Here's their angle: If you want to net $1 more through writing this year, you can do it in one of two ways:

#1: Earn an extra $2. If you're in a higher tax bracket, half of those earnings will disappear in the form of taxes, leaving you with your $1.

#2: Save $1. You keep it all. The IRS doesn't tax savings.

Now I'm not in a high tax bracket, so let's imagine that for me, $1500 saved equals $2000 earned.

The amazing thing is that the way I'm saving won't hurt me at all. It's not like I'm committing to eat Ramen Noodles for the rest of the year, or cutting my marketing budget. I simply compared prices on some of my services and winged better deals.

My primary savings came from changing my merchant account (the company that processes my credit cards for online purchases of my writing.) Cherie had been complaining for some time that too much of our earnings were being eaten up by our merchant account. I'd always respond, "Well, you know we compared before we got the service several years ago. I guess it just costs a lot."

But when they said they decided to charge us $40 more per month (ostensibly in order to serve us better!), I fired up my calculator and began asking around about the top merchant services. One ministry said they had changed merchants every two years, because companies would advertise a killer rate, inching up to an exorbitant rate before you knew what had hit you. He ended up with PayPal. I'm making the change, which should save me about $1200 per year. (Before the increase, they were charging us over six times the amount that PayPal charges for the same service!)

I've also found that you can bargain with Internet Service Providers. Mine was charging me about $70 per month for DSL wireless (allowing me about five computers to access). I got an advertisement in the mail that said I could get a competing service for about $45 per month. But I didn't want to go through the hassle of changing (change e-mail addresses, etc.). So I called my provider and said, "I like you guys, but your competitor is offering me the same service for $45 per month."

"We can beat that," he said. So immediately I began saving another $300 per year.

In my book on personal finance, I quote the CEO of Wherehouse Music as saying,

"Manage costs, not revenue. And remember that there is no such thing as a fixed cost."

Cutting costs frees up writers to take the assignments and write the books we're passionate about, rather than having to always go for the best paying. Extend this to paying less for houses, cars, etc., and you'll be that much closer to making a decent living from your writing.