Don't waste money on extended warranties

Did you ever wonder why electronics store employees spend lots of time trying to talk you into purchasing an extended warranty for your product? They'll say it's for your protection.

The truth is that extended warranties make the electronics stores tons of money – they profit to the tune of 40% to 80% on the warranties. And when there's a big money winner, there's always a loser. In this case, the consumers lose almost every time.

Extended warranties make companies a lot of money because consumers never need them, or if they do, loopholes exclude coverage. So while the salesperson is extolling the virtues of a plan that will cover the repair or replacement cost of your electronic equipment, the fact remains that it's an unnecessary expenditure.