“You can buy an extended warranty for an additional ____ dollars. Wouldn’t you like to protect your purchase?”

It feels like a wallet violation.

At least buy me dinner first.

It’s enough to keep me out of brick & mortar stores forever.

I’m not sure why I consistently feel bad saying no, and I teach financial discipline for a living. I want to feel good about what I spend money on, not guilty. It feels wrong to leave my purchase exposed to who knows what. Most of the time I politely say no and quickly move on.

Extended warranties have become a profit center for businesses, especially retailers. The peace of mind can be costly. For example, on average, an extended warranty can add an additional 10% to 25% to the purchase price of an item. There’s no doubt they’re considered a formidable driver of revenue.

When you think of the most common extended warranty, you may think of those for cars. However, they’re now offered on almost every consumer durable you buy. Recently, a good friend was offered an extended warranty for $14 on a $75 football from a national sporting goods chain. Of course he was wise enough to turn it down.

So, how do you determine when it’s smart to consider an extended warranty?

1. If replacing the item would lead to financial strain, transfer the risk.

Regardless of the cost of the product or service, an extended warranty should be considered if repairs or replacement could drain emergency cash reserves or increase your credit card debt. You don’t need to decide on an extended warranty right away. You’ll have a period of time, usually 30 days from the date of the transaction, to add coverage. Review what is covered under the standard warranty; for example, most services and goods will carry some form of protection or replacement for at least a year. If a major repair or replacement has the potential to place your household balance sheet in jeopardy, then it makes sense to transfer the risk to the manufacturer and pay for protection.

2. The bigger the purchase, the greater the consideration.

Durable goods like refrigerators, televisions, dishwashers, washers and dryers all come with standard warranties. Extended protection may not be required, as these items don’t break down frequently. However, before you say no, it’s best to investigate objective sources for repair histories for brands you’re seeking to purchase. Examine ratings on a website like www.consumerreports.org. Rarely do durables break down during the warranty period, according to Consumer Reports.

3. Forget the warranty; remember your savings account.

Instead of a warranty, consider directing money you would have spent into your emergency savings or money market account. Think of it as a cash bolster to handle repairs. In the case of a $250 warranty, add $21 a month to your budget.

4. Don’t get caught in the moment.

You may think that spending an additional 10% to 25% is no big deal after spending hundreds of dollars on something you want. Your brain will consider the purchase of an extended warranty small when compared to the greater cost of the item. As consumers we have a difficult time maintaining a rational head when it comes to additional expenditures for big purchases. Take time to step back and weigh the pros and cons. Examine the extended coverage as a stand-alone expense and the odds of using it.

5. Buy with your weaknesses in mind.

I purchase extended warranties for all portable electronics including laptops and smartphones if they cover accidental damage. I know my weaknesses; I tend to be clumsy with computers and cellphones. Make sure to examine how many instances are covered (plans will have limits) and the specifics for accident coverage. Understand your faults and use extended warranties when it protects your purchases against them.

6. How much is that item used?

Extended warranties can be useful for durable used items like automobiles and appliances. To cover your automobile, compare the costs of a dealer warranty to an independent organization like www.carchex.com, which offers several tiers of coverage (Titanium being the most inclusive). Home warranties that cover aging heating and air-conditioning systems can be worth the cost. It’s important to understand that standard maintenance is not included nor is full replacement. However, to keep appliances in operation longer and avoid the potential of frequent costly repairs, the expense of an extended warranty should be investigated.

7. Sometimes, extended warranties just don’t make sense.

Like my friend who was offered an extended warranty to protect against a flattened football, there are occasions when you’ll wonder how retailers have the nerve to sell coverage. If the purchase is $100 or less, take the chance with the manufacturer’s warranty and don’t worry about paying for an extended agreement.

In the frenzy of shopping, it’s easy to relent and say yes to aggressive salespeople.

When it comes to extended warranty purchases, don’t rush. Make the decision after reviewing the facts in the comfort of home, not in a pressured situation like checking out at a register with a line of shoppers behind you.

Many believe that extended warranties provide peace of mind.

How much is peace of mind truly costing you?