Dear readers – Pop Quiz! Which one of these financing offers is a better deal?
A) [Carpet Price + $572] with 24 months, 0% financing
B) [Carpet Price + $0] with 6 months, 0% financing
Here’s the back-story: So Mrs MMD and I are buying new carpet for our house. We find something we like and we sit down with the sales representative to go over pricing. He gives me Option A with a price that just sounds wrong (of course I calculated out what the price should be ahead of time). When I interrogate him on the cost, I find out he is charging $660 for the installation. Anyone who has ever shopped for carpet knows that pretty much everyone who sells carpet always offers the equivalent of about $100 for installation. So when I bring this to the sales representative’s attention, he promptly offers me Option B which has $88 installation but a shorter financing term. I actually paused for a minute because I thought he was joking…
Obviously Option B is the better of the financing offers! For Option A to be a better deal, I’d have to cover the opportunity cost for making a guaranteed $572 within 18 months by spending a pretty ridiculous sum of money (more than carpet should cost).
Coincidently, this all happened on the same day as my Why Do Poor People Have Two or More Flat Screen TV’s? post was published. In keeping with one of my many theories in that post about how consumers are being taken advantage of, I feel like this situation is yet again another example of where the average Joe gets duped into taking deals that are not necessarily the best. What if I hadn’t asked questions and got to Option B? What if I wasn’t smart enough to recognize that an immediate $572 savings is much better than stretching out my payments for an extra 18 months? As consumers, it is inevitable that we will need to buy things, and we have only ourselves and the resources we trust to aid in making the best possible decisions we can make.
In anticipation of the big one-year anniversary, next week’s blog posts will be all about blogging. The first will be silly – a recap of all the dumb stuff I did over the course of the year. The second will be a little more serious and will reflect some of my goals and directions going forward.
Blogs You Should Check Out:
In case you missed them, here are a few great stories you should check out this weekend:
- Have you ever met your twin? Jessica did and it turns out she also has her own blog! What were the chances? Read My Blogger Doppelganger! by Mo Money Mo Houses.
- Lance has got a system in place for paying off his debt that I can identify with. Read Our Debt Pay Down Strategy on Money Life and More.
- When did you first realize that you weren’t going to be a rock star or make a career out of your hobby? Sydney talks candidly about here experience with photography in When Is It Time To Quit? Why I Gave Up My Dream on Untemplater.
- Did you follow Jeremy’s advice on using Keywords? You better – because he’s ready to move on to Lesson 2! Read Effectively Using Keywords On Your Blog – Part 2 on Modest Money
- I’m a big fan of reading other people’s stats; especially if the blog is similar in age to mine. Jason shares his latest info on Blog Income and Site Statistics – July 2012 on Work Save Live.
MyMoneyDesign was featured in the following personal finance carnivals this week:
- Weekend Ramblings – Mandarin and Chinese Domination Edition
- Carnival of Money Pros – The Summer Olympic Edition
- Lifestyle Carnival – 14th Edition
- Mars Rover Curiosity, Happy August and a Finance Carnival
Thanks again to all my new and returning visitors. I really appreciate your support and hope you continue to enjoy my site!
Posts This Week:
Photo Credit: Flickr