Thursday, August 8, 2013

Penny Wise, Pound Foolish

It's really hard to tell, when buying a house, if you are being penny-wise, pound foolish.  Meaning, are you trying so hard to save money in the short term it hurts you in the long run.  The biggest question for us right now is whether or not to buy a home warranty.

I'll start by saying that the big question a week ago was whether or not to join Angie's List - it's $39 for a year.  However, there is a 40% off coupon you can find pretty easily by googling, and we got an extra 20% off for using PayPal - so what was a $40 question suddenly got knocked down to $18 and became an easy decision.  So far, we like Angie's List - it's been great for reviews of moving companies, etc. but, according to the spouse, it is also full of negative reviews of home warranty companies.

We also solved a big question this week of what homeowner's insurance to get.  We got a few quotes, and then decided to go with AllState, which was not necessarily the best value, but we sat down, put all of the coverage into a spreadsheet, and then talked through what kind of coverage we needed.  On face value, there was one company that was a better value (there was a math ratio thing going on), but we talked through it and realized that we did not need $150k of coverage for our personal possessions.

I'm going to take a brief aside here and talk about the importance of renter's insurance.  First of all, renter's insurance matters because it forces you to sit down and list the value of all of your personal possessions early on in your furniture buying, and then you just have to upgrade certain categories.  Secondly, renter's insurance matters in case you get robbed, your house burns down, or you lose your engagement ring at the gym.  The entire reason we went with AllState, besides they were a good enough value, was that I was so happy with how they dealt with us when I lost my engagement ring.  From the time of filing a claim to the time of receiving a check was less than two or three weeks, the guys we worked with were really nice, and the whole thing was pretty easy.  Sidenote: insure your jewelry.  You can either get a rider for a specific piece of jewelry or you can get a rider that covers all of your jewelry.

I feel like with houses, it feels really difficult to make these decisions.  Everything feels so huge, so fraught, so "you are making this decision and it could cost you billions of dollars!" not to mention the part where you are spending all or most of your savings on this piece of land.  It's hard to get a grip on the bigger picture.  It's hard to take all of the advice you are getting into consideration.  Any more advice on navigating these issues?

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