New Financial Plan

Yes, this is a personal finance blog.  No, television and the way it is transmitted is not a personal finance issue.  But spending money on a new TV, buying a converter box, and signing up for converter box coupons are spending issues which are part of personal finance.  Are those things in your budget?  Are you planning on what changes you might need to make?  Using coupons and taking advantage of programs available to you are personal finance issues.  It is good to know what is available and appropriate to use.

The government has a program where you can sign up now for coupons for $40 off a digital converter box.  If you have any TVs hooked up to antennas you will put the converter box between the antenna and the TV and it will convert the new digital signals to work with old TVs.  Or you can change the hookup on back of newer TVs and have the antenna go straight into the digital input if your TV has a converter in it.  Or you can buy a new TV.  With new converter boxes and TVs come new features.  With those come higher prices.

I signed up for coupons right away so I wouldn’t forget.  I figured there would be a little processing time.  I have also heard that there might be a limit on how many coupons you can get, and that after so many are issued or used they will stop issuing them.  After signing up I know a little bit more about it.  Unfortunately it does not work like I expected it would.  I’ll list here a few things I learned about the program, and share how I believe they relate to personal finance.

1. The website to sign up is at www.dtv2009.gov.  You have to enter your name, address, and whether or not you subscribe to any pay TV services.  You can request 1 or 2 coupons.
2. Coupons will not be processed or sent out until converter boxes are readily available, probably late February at the earliest.  Processing, mailing, and delivery time estimates are not provided.  Coupons will be valid only at participating retailers.
3. Coupons expire 90 days from when they are mailed.  They are not transferable, have no cash value, are not replaceable if lost or expired.
4. 22 million coupons are available first come first served, and an additional 11 million are available to households with no subscription TV services.
5. Coupons cannot be used for “upgrade” devices such as converters with DVRs in them.

My two cents and personal finance perspective on each of those points:

1. The website is quick and easy.  I filled out the info and requested coupons.  The FAQ section is also easy and has details about all of these points and more.
   As with anything, it’s nice to use a quick and easy tool to get something done.
2. I didn’t know what I was getting into here, and even know I don’t know when I’ll have my coupons or details.  I’m guessing that different companies will be making different types of boxes.  I’m guessing that different stores will carry different boxes.  At some point I’ll have coupons valid somewhere for something.  Will it be a good box, or a market trial, or an early version?
   Just like your finances, make sure you know as much as you can BEFORE you take action.  These details weren’t brought to my attention until after I signed up.  Learn from my experience.
3. This is frustrating.  I don’t know when these coupons will be here, where I can use them, or what options will be available during the time they are valid.  Will these boxes come down in price after I buy them, or be on sale some time, or be cheap and basic the first year until there is really a need to compete to get people to buy one?
   Watch out for limitations and exceptions.  Even after signing up I hadn’t thought about some of these things until now.  Know the risks.  Understand what you expect and what you are able to tolerate.
4. There are limits.  Understand what is available.  We don’t know how many people are signing up for this or how long supplies will last.  There is an artificial pressure here to take action to lessen the risk that they will run out before you sign up.
   Understand the limits and risks.  Interest rates change, application criteria change, and markets move.  Consider your tradeoffs and opportunity costs.  What is it worth to take action now?  When is it worth taking time to learn more, to consider more options and wait for better ones, or to time a market?
5. More limits.  One big point some people are highlighting is that going digital will be good for the consumer.  Unfortunately certain consumer “upgrades” appear to be too good to be supported.
   Different purchases have different fees and costs.  Free consultations will give you basic information but nothing too detailed.  Understand the value to know what the upgrade is really worth, and when it is worth paying for.