How I Saved 8% on My New Dishwasher

Mar 1

Image sourced by **Nathan Dumlao @nate_dumlao**

How I Saved 8% on My New Dishwasher and Slept Like a Baby Too!

This probably doesn’t apply to you, but I just have to admit it. Every once in a while. . .

I’m a knucklehead!

If you’ve been following Budget and Grow Rich® for any stretch of time, you know that I am a Trader Joe’s aficionado. And, I loved their Mixed Nut Butter.

Pretty much, not a day went by where I didn’t imbibe a spoonful or two for breakfast. At least until Joe cancelled the product.

While I was at it, I tried to recycle the plastic jars. In fact, I try to recycle as much as I can.

Instead of wiping out the last morsels of mixed nut butter from the jar, I put the jar in my dishwasher to clean it so it would be suitable for recycling.

Lo and behold, after maybe nine months my dishwasher stopped working. Clogged up to the gills.

And I thought home appliances were tip top quality. . .

Now it may have been that the General Electric dishwasher was poor quality. But I don’t know for sure. It wasn’t that old – maybe four years. . . so I’m thinking it was User Error – aka Knucklehead.

Btw, just in case. . .‘AKA’ means ‘Also Known As’.

My neighbor recommended a local appliance repairman (home repairman) – Good work if you can get it.

The first home repairman John didn’t even return my call.

Nick, the second guy, was very friendly and helpful. He told me that he would be glad to visit my apartment but he would charge me a ‘diagnostic fee’ to assess the problem with my dishwasher home appliance. The fee would have been $175. Ouch.

I guess that’s the going rate, and I can’t blame them. It takes time to visit someone. And many people probably don’t buy in the end.

I bagged that.

On top of the diagnostic fee, there was the time and materials charge if I opted to fix it. The estimate for that was approximately $200 or so.

So, at least $375 to fix a machine that was already nearing five years old.

Nick encouraged me to check out the new dishwashers.

I visited my local appliance store. I like to buy local when I can and it makes sense.

A new dishwasher, including installation and sales tax was $1,100.

The cost was roughly the same as Home Depot. So I decided to support our local merchants.

Clearly, I was living in the past because I was thinking the cost would be $575.

Anyway, neither $575 nor $1,100 weren’t exactly in my budget.

BUT, the good news was that I had created an Emergency Fund.

So, I had the funds on hand in my bank account, earning a little interest.

And since I had the money on hand, I avoided the 8% finance charge on a consumer loan.

I was able to sleep well because I didn’t have to work overtime, stress or strain to fund the purchase.

Easy!

Follow these 19 ways to optimize your costs and save money over the long run:

Buy quality goods and services.

Cutting corners and saving a few dollars today, only to find that the item breaks or the service is poor quality soon after you purchased it means you have to purchase another one.
This is a waste of money.

Search online for vendor rebates.
Search for online coupons.
After you make the purchase, check online for a month or two to find a ‘Price Match’.

With a Price Match, if you find a vendor that offers the same item at a lower price, the merchant where you purchased the item will give you a refund for the difference between the price you paid and the lower price offered by the other merchant.

Save money every month in advance of your purchase date to accumulate the purchase price.

This concept is similar to a “Layaway Plan” or “Christmas Club Accounts” which banks have offered where customers deposit money every month to spread out their savings so that they have accumulated their Christmas gift spending amount before December 25th.
Even saving a portion of the purchase price and borrowing the remainder will save you money – through lower interest expense.

If practical and safe, delay (defer) buying the new item until you can save money.
Pay up front in full IF that saves you money or if that’s how you budget and manage your finances.
Pay by ACH, Zelle®, PayPal®, Venmo® or cash if that saves you money.

Many merchants have implemented a credit card surcharge when customers pay by credit card. The additional cost could be 2% to 4% on top of the purchase price.
On the flipside, many merchants offer a discount when customers pay by cash. The discount (savings) could be 2% to 4% on top of the purchase price.

Select vendors that offer no cost free deferred payment.

Some vendors will offer payment terms of “0% interest” or “No interest for 90 days” interest) or longer.
Make sure you make the required loan payments on time to maintain your zero interest rate (0%).

Check with local stores and for online discounts.

Many merchants offer discounts on appliances and other products and services at various times throughout the year – seasonal discounts – to increase sales and generate cash during the ‘slow season’.
Bundle your purchases – in other words, buy two appliances at once.

Find out whether different vendors offer free delivery and freight. This could deliver nice savings.
If relevant, calculate the cost of delivery and freight. Compare that against the all-in prices offered by different vendors to determine the best price.
Shop around for product rebates.
Borrow from yourself and pay yourself back.

A few years ago, I purchased a Honda CR-V and borrowed money from Honda Finance Company.
I paid the monthly debt service from my checking account.
A year or so later, I received a bonus from work.
I used the bonus to pay off the car loan in full.
Then, every month, I transferred the same amount as the monthly loan payment back into my savings account.

If you need to borrow money to make the purchase:

Ask the merchant whether they provide consumer loans.

Sometimes these loans carry a relatively low or even zero percent (0%) percent interest rate.
In 2018, I purchased a new bed from Sleepy’s Bedding Store. They offered an installment loan with a zero percent (0%) interest rate. I had the money saved up so asked if I could get a discount if I paid the entire purchase price upon sale. They said, “No.” The interest rate on the loan was imbedded in – part of – the retail purchase price. Oh well – you win some, you lose some.

Ask a friend or family member to lend you money.

I am not a fan of borrowing money from friends or family members. I’ve seen things go wrong and that can tarnish or ruin a nice relationship. Thanksgiving Dinners become a downer.

Visit your commercial bank.

If you have a savings account, the bank may give you a “passbook loan” at a reasonable interest rate. With a passbook loan, they use your savings account as collateral or security for your loan. In the event you don’t repay the loan, they take (seize) your money to repay the loan.
Recently, my friend Gordon purchased a new car. Turned out that the dealer financed the cars through Chase Bank. Gordon was a ‘preferred customer’ since his personal and business bank was Chase. He asked about a preferred rate. They reduced his loan payments by $150 per month. Nice.

Explore a teaser loan or courtesy loan from a credit card company that offers an attractive teaser rate. Teaser rates are a relatively low interest rate for a short period of time. Beware though, if you miss the minimum payments or the repayment due date (balance due date), the credit card company will raise the interest rate to the stratosphere; I have seen interest rates as high as 24%. And sometimes the higher rate is retroactive – effective from the date you took out the loan. Ouch!
Consider borrowing from your 401(k) plan or 403(b) plan as a last resort.

Sometimes the interest rate could be attractive compared to other borrowing options.
Your employer will deduct money from your payroll (payroll deductions) to repay the loan (debt service).
If you leave your company or get laid off or fired, your loan becomes due and payable upon termination or becomes taxable income to you.
I’m Not a fan of borrowing money from one’s retirement plan accounts. Because you’re goal is to save money for retirement. Yes, I know that you’ll repay the loan with interest through payroll deductions. But I believe that if your goal is to save money for retirement, then do that period. To save money to fund this purchase, reduce your spending, work overtime, apply your income tax refund, etc.

If you borrow money, pay on time or pay early.

This will preserve your contractual interest rate and avoid late fees.

With consumer loans (installment loans), make an extra, small payment just before your final loan payment is due.

One time, my friend Frankie got charged late fees and penalty interest. His 0% rate evaporated. Apparently, his payment didn’t arrive on time.
Ouch!
To protect your savings, suppose you have to make one more payment on your loan. Your monthly loan payment equals $138.00. And, before you make your final loan payment, your outstanding loan balance equals $138.00.
Send a one-time payment of say $10.00. This payment would reduce your outstanding balance from $138.00 to $128.00.
Make a photocopy of your check or online payment. Or take a ‘selfie’.
Do not adjust your standing monthly loan payment, in this example, $138.00.
Then, on the payment due date, the lender would pull $138.00 from your checking account or savings account.
Then, you will have overpaid your loan by $10.00.
The lender will send you a $10.00 refund.
Photocopy the refund check before you deposit it in your bank account. Or take a ‘selfie’.
Save your final loan account statement which shows the overpayment and refund.
This way, if you’re ever questioned you’ll have the supporting detail to prove that you paid off your loan in full and protect your savings.

Set up automatic online payments.

Schedule your payment date three (3) to five (5) days before the
Make sure you have enough cash in your checking account to cover the loan payment. Consider getting ‘Overdraft Protection’

Take care of your appliances and other things to make them last. By following the manufacturer’s suggested use and maintenance manual and tips, you’ll extend the useful life of the product and maximize the benefits you receive from a service.
Oh yeah, and read the instructions. When was the last time you did that? Me? Probably when I had hair. . . Needless to say, that was a looong time ago!