Life's big $$ decisions: What's really worth it?


(CBS News) We all have to make basic financial decisions in our lives. And sometimes it all boils down to one question: worth it, or not worth it?

Sharing advice from his book "Worth It...Not Worth It," Jack Otter, executive editor of CBS MoneyWatch, addressed several of those financial decisions on "CBS This Morning." Check out some of his advice below.

Buying a home - Worth It: Otter said, "I come down on the side of buying, but not actually because of the economics, because of the behavioral aspect of it. A house is a piggy bank you can live in. You would be better off in most cases, if you rented your whole life and put every cent you save into bonds, stocks, invest it wisely, 30 years from now you'll be rich. But most people won't do that. They buy sneakers, they'll go out to dinner, they'll buy a nice car, and in 30 years, they'll have no house and the same amount of money. That is the best single reason to buy. You're buying a depressed asset for less than four percent of other people's money . So right now is a particularly good time to buy."

Using your Credit Card - Usually Worth It: Otter said, "If people listen to nothing else I say, it is if you are in deep credit card debt, cut up those cards, only use debit. But, if you can pay it off every month, as you should, then there are a lot of protections of a credit card. For instance, with a debit card, you buy 30 bucks worth of gas, the gas station might put what's called a hold on $80 worth until they reconcile the books and realize you drive a Prius and not a pickup truck. If you check into a hotel, they could put mini-bar charges and so forth and put a hold on your money and you could overdraft and then they reconcile the books and then they don't charge you."

When asked if you should use your debit card as credit to get the protections afforded by credit, Otter said, "I wouldn't mess around with that. I would get a separate card. If you don't carry a balance, get airline miles, cash back. Only use your debit as a debit."

New Car- Usually Not Worth It: Otter said, "I love the new car smell as much as anyone, but the fact is, in the first two years of ownership, that value (of your car) plummets. That's where you really take the hit. It's called depreciation. So you can let someone else take that depreciation, buy a nice, pre-owned certified car from a're much better off. Right now there's a funny anomaly, where during the downturn, not that many people bought cars. There are fewer used cars, so right now the price differential is pretty close, so you're not going to save that much. Don't lease. That's one thing I'll tell you. ... Better to buy than lease."

College education or retirement saving? Retirement saving - Worth It: Otter said, "I've got two children. I can't imagine not saving for their college education, but follow the flight attendant's advice: put your own oxygen mask on first. Save for retirement. There are lots of ways to get loans for college. It's not easy, but you can do it. There's no such thing as a loan for retirement."

Remodeling - Usually not worth it: Otter said, "Don't think of remodeling as an investment. It's not. You're not going to get 100 percent back."

For more with Otter on what's worth it and not worth it, including what's more valuable - a new kitchen or basement - watch the video in the player above.