Thrifty Thinking: Computer Upgrades

Helping consumers save hundreds of dollars, while getting the most bang for their buck with their computer purchase, Financial Wiz and co-founder of Wisebread.com, Greg Go, says "slow down" before ditching an older computer -- you may be making a big financial mistake. Greg has made a living out of helping consumers make smart decisions on a tight budget, and is sharing his advice on maximizing your computer-buying budget. I had a chance to interview him to learn more.

Consumers get the impression that computers go obsolete quickly, but what are some ways people can extend the life of their computers?

The best way to extend the life of a computer is to add more memory (aka RAM). 

Consumers are willing to pay $700 for a new computer every 3-5 years, according to a recent Harris Interactive survey. And what's crazy is that 64% believe it's a better financial decision to just buy a new computer rather than try to upgrade when the old computer start to get sluggish.

But if they added more memory (aka RAM) to their computer, they could get nearly all the speed benefits of a new computer. And the additional RAM will cost less than $100 in most cases, thus saving themselves over $600!

Most people are so afraid of opening up their computer and trying to upgrade it that they miss out on this quick and easy way to save hundreds of dollars. It takes less than 15 minutes to add or swap out RAM -- if you can change the batteries on your remote control, you can swap out RAM. The first step is to go to Crucial.com and use their System Scanner tool. It'll tell you exactly what kind of RAM your computer uses and whether it can take any more.

Are extended warranties on computers worth the cost?

Absolutely not! Extended warranties that cover the purchase beyond the first year are pure profit for the manufacturer. If hardware is going to fail, it will fail within the first year.

Besides, consumers can often get free extended warranty from the store or their credit card. For example, CostCo automatically provides a 2 year warranty on computer purchases, and American Express adds 1 year to any standard manufacturer's warranty.

What options or upgrades on computers are worth paying for?

The best upgrade or option to get these days is a solid state drive (SSD). SSDs are much faster than regular hard drives, and nowadays the performance-to-cost ratio makes them worth it. An SSD will make the computer more "future proof."

Do you have any "insider secrets" to share about computer ownership?

The best kept secret in the computer retail industry is how easy and cost-effective it is to upgrade an old computer by adding RAM. Since it only takes 15 minutes and less than $100, there's no reason not to try it before shelling out big bucks for a new computer. Even my technophobic parents now try to upgrade a computer before they even consider buying a new one.

Another great way to save on computer is to skip the expensive commercial software. For example, I use Windows Defender instead of McAfee or Norton anti-virus; and Google Docs instead of MS Word. Here is a good list of free or low-cost alternatives for popular programs from CNET.