Saturday, June 11, 2011

USAA: Five Things Worth the Splurge

United Services Automobile Association (USAA) generally is considered to be one of the top financial services companies when it comes to customer service.  Therefore, when they say something, I pay attention.  I might not agree, but I listen and consider what they have to say (disclaimer:  I have been a "member" of USAA for 18 years now, and I have nothing but good things to say about them).  In their most recent company magazine, they had an interesting article entitled Five Things Worth the Splurge.  I thought I'd pass along what they said was worth spending a little extra on, as well as my own personal thoughts.

1. Interior Paint:

According to the article, professional painters suggest using the highest-quality interior paint that you can afford.  Their reasoning is that the better paints are easier to apply, and they look better.  I can't really comment on this one other than to say that according to Consumer Reports' most recent interior paint comparison (March, 2011 issue), there doesn't seem to be a strong correlation between price and rating.  Of course, CR is just one data point, so who's to say if USAA is right or not.

2. Estate Planning:

The article says that while it is possible to create a will with a do-it-yourself kit for as little as $15, they point out that estate planning is complex.  Therefore it might pay to have a professional review your plan to make sure that nothing is missed.  I tend to agree with this advice.  My wife and I had our will, power of attorney, and living will drawn up by an estate planning attorney.  The attorney spent a lot of time with us asking us questions and pointing out possible scenarios which we should consider.  I believe that this was money well spent.  Perhaps if you are single without any dependents, a do-it-yourself will would suffice.  However, if you have children, you really need to consult with a professional to make sure that you cover all of your bases.

3. Mattress:

The article states that a quality bed is the key to quality sleep, and a better sleep can improve ones health.  This is probably one of those areas where your mileage may vary.  I know some people who could get a good night's sleep on a mattress made out of granite, so for them, a good mattress may only provide a marginal improvement to their sleep.  That being said, I generally agree with this.  A bed is one of those things which can last a long time (ours is from the last century) so an extra couple of hundred dollars spent will be amortized over the entire life of the mattress.  If a little extra money up front is going to give you years of more restful sleep, then it is worth it.

4. Kitchen Knives:

The article suggests that a good set of high-quality knives literally can last a lifetime.  Premium knives are forged from better steel and have crack resistant handles that allow them to last so long.  While you can get a set of knives for under $100, these knives do not have the staying power of a professional set.  A good set of knives will set you back at least $400 according to the article.  However, if they last a lifetime like they suggest, then it seems like a good investment.  Of course, I suppose this is another case where your mileage may vary.  If you cook a lot, then good knives make sense.  For my part, my wife and I are on our second set of knives.  The first set we got as a wedding gift and the second set was also a gift.  Neither set is what I would call professional.  However, since we've spent a total of zero dollars combined, we are ahead of the game!

5. Running Shoes:

According to the article, a good pair of running shoes will help to protect your feet, knees, and back.  While you can get a cheap pair for $50 or less, these will have inferior cushioning and support.  The article suggests that you visit a good running store and get fitted properly.  That way, you can make sure you can get shoes which are matched to your body type.  I totally agree with this one.  Running is an activity that puts so must stress and strain on your body.  A good pair of running shoes if your best defense against injury.  If you are going to run, paying $100 or more for shoes will save you from a lot of pain down the road.

Overall, I think USAA's list is a pretty decent one.  Of course, not all of these will apply to everybody, but it certainly provides food for thought.  Here are three more items that I think are worth splurging on:

1. Home Inspection:

As a home buyer, there are many hidden problems which you won't notice.  That is why you need an expert to point them out to you.  A good home inspector will do exactly that.  In addition, I've found that talking to the inspector while he is doing his work is a great education for any homeowner.

2. CF/LED Bulbs:

Compact Fluorescent and LED bulbs cost more than traditional incandescent light bulbs.  However, they not only last longer than the standard variety, they use less energy.  The first generation of CF bulbs took awhile to warm up, couldn't be used in dimmers, and looked funny.  However, the ones that are sold now have come a long way from those days.  This one is a no-brainer.

3. Regular Car Maintenance:

While there is some debate over whether or not cars need oil changes every 3,000 miles, it is indisputable that keeping up with a car's scheduled maintenance is a sure way to extend the life of your vehicle.  Even if you are one of those people who sells their car every three year, a well-maintained vehicle will have a higher resale value.

As a bonus, here are two things that are not worth spending extra on:

1. Books:

99% of the time, you read a book once and then it sits on the bookshelf for the rest of eternity.  This suggests that it doesn't pay to splurge on the hardcover edition.  Yes, hardcovers might last longer than paperbacks, but if you are only going to read the book once, who cares!  In addition, you often can get cheap used paperbacks, or even free books from the library (to borrow of course).

2. Dogs:

Why spend thousands of dollars buying a "pure bred" dog when you can get a great pet for free from a shelter or rescue group.  Not only do you save money, but you are providing a much needed home to somebody who needs it.  Besides, many of the dogs that end up for sale in your local pet store come from puppy mills.  In addition, many of the pure breds have a higher incidence of health issues than mutts due to genetics.  All in all, unless you are looking for a dog for the show circuit, you are much better off rescuing than buying.

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