Lack Of Knowledge Can Cost You Money
My mother is extremely frugal. She stretches the money her and my father have by painstakingly evaluating every purchase for value, and getting every drop of use out of their possessions. But while visiting them for Thanksgiving I saw that they were wasting money each and every month because they lack technological knowledge.
My dad’s not a huge technology guy, but for someone in his mid-70’s he does pretty well. He recently researched and bought a new high definition TV. He has a laptop, high speed internet, and even has a wireless printer. He can use all of these items well, but if anything goes wrong my phone rings.
I was curious as to what broadband package he had, and asked if he had a recent cable bill I could look at. Inspecting their detailed cable bill, I saw that my parents were paying $10 a month to rent their cable modem. At $10 month, they’re paying $120 each year to rent their cable modem. I don’t recall how long my parents have had high speed internet, but it’s been at least a couple of years. I looked up the cost of the model of cable modem provided by their cable company, and found it on the Best Buy website for about $80.
Each year my parents pay 1.5x times the actual value of the cable modem just to rent it!!
My wife and I had run into a similar situation a few years ago with our cable modem. When we first signed up for broadband service there was no cable modem rental fee. Later, when we received a letter in the mail stating that a $3 fee for cable modem rental would appear on our bill starting the following month, I knew we had to take action. I returned the cable modem to the cable company office and simply bought my own.
As a Christmas present, I’ll be purchasing and installing the exact same cable modem my parents currently have. The cable modem itself will not be the present, however. Just replacing their cable modem doesn’t give them anything they didn’t have before. Visually, it’ll look exactly the same as before, and their internet will work just as it did before. The real present will come each month when they open their cable bill and find it $10 less than it had been.
How about you Clever Friends? Have you ever overpaid for something because you just didn’t understand something? How much did it cost you?
Brought to you courtesy of Brock
Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children, Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.
When good friends of mine were looking through her elderly mom’s bills, they found out she was paying 8-10$ a month for a phone rental. Just a plain plug in the wall landline telephone, one like you could probably buy in walmart for 15 or 20$, and she had been paying that fee for at least 20 years, probably more. What a waste of money, and she did not have a lot of money to waste.
there are many things which we can get for half or even lesser prices but many people won’t take action considering them to be comfort.. a small talk with my mobile company have helped in saving over 60% of my monthly bill.
It’s just that we need to have an idea about the prospects and take action.
@Jenny – that’s sad to hear……the cable modem rental as well as your example of the phone rental are good examples of companies obviously taking advantage of people’s lack of knowledge OR the fact that most people don’t go through their bills closely to see what they’re being charged for. Thanks for sharing!
@Raj – We like to do that sort of thing ever couple of months – analyze each of our monthly bills, and see how we can reduce or eliminate them. That usually means calling them up and seeing if they can offer us better rates. Thanks for your comment!