Slow Down and Save Gas/Money!

If you're like me, you've heard that slowing down while driving on the highway will increase your miles per gallon. For the past several weeks I have slowed down while traveling on the interstate and it has improved my mpg from around 23 to 27 on my Toyota Tacoma. Now, I've also been "coasting" in neutral as well, which has probably contributed to my increase in mpg. My truck is a 5-speed which allows me to easily coast in neutral. In one route to my home, I can coast downhill for 1.5 miles in neutral. I also oftentimes coast in neutral for several hundred feet before reaching an intersection. With these gas prices, give it a try and see how your mpg improve! Every little bit helps these days...

Ditch Your Landline Phone and Save Money!

Many people still think they need a landline phone, when in reality, many do not. I can think of two viable options:

1. Upgrade your cellphone plan (if needed) and use your cellphones at home. In our case, we didn't even have to upgrade our cell phone plan.

2. If you have a high speed internet connection like cable, use a service like Skype to make calls from home. For about $40 per year, you can make unlimited calls throughout the U.S. and Canada. You even get your own phone number.

Check your bank accounts frequently

It's important to closely monitor your bank accounts on a daily basis. Log into your accounts everyday and see what's going on. We're quickly approaching a cashless society and if you're like me you use very little cash. When we're not spending cash, it doesn't feel real in a sense. Forking over the cash to buy something makes you think twice, but swiping your debit/credit card doesn't really feel the same to me. Does it to you?

So back to my main point. Log into your bank accounts on a daily basis and see where your money is going. By doing this, it might feel more real to you that lots of money may be going out.

Like I've said before... it's crucial to know where every penny spent goes.

Buying a house for a tax deduction - dumb advice

You'll hear this from many people while you're young: "buying a house is a great financial decision, you can write off all that interest you pay." That may have been the case one day, but not today. It's a huge misconception that many people fall victim to. The standard deduction for 2007 is $10,700 for a married couple, filing jointly. Meaning, unless your mortgage interest, taxes, charitable contributions, etc. exceeded $10,700 last year (filing jointly), buying a house for the mortgage interest write-off won't help you! So keep that in mind before getting caught up in the hype of buying a home for all that tax money you'll save. Most people just do not benefit from this. Sometimes (and in this real estate) market, it may not hurt to rent for while longer.

Tax Withholding - Check your W-4

I was listening to Dave Ramsey the other day and a 40 something year old female calls in talking about her and her husband's debt and how they are trying to pay it off. The caller basically said they are able to pay down their debt with the tax refund check they get every year, which is about $4500. Dave told the woman they shouldn't be getting that high of a tax refund and they should adjust their W-4 with their employer and have less taxes taken out of each paycheck. You could tell the women had no idea that's how taxes work. I think many people in this country think they just get free money at the end of the year (and this may be the case if you make very little money). People don't realize that your tax refund is just that... a refund of some of the taxes you've paid in. If you have no dependents and basically no write offs, and you're getting a hefty refund each year, you'll want to adjust your W-4 as well.

The IRS used to have a calculator here, but its been down for a while now. If anyone has any good advice on how to accurately calculate this information, I'd be glad to know. Going through all those IRS forms seems a little daunting and error prone to me.

So anyway, it's important to learn at a young age how taxes really work. You pay in and you may get some back in the form of a refund. You don't want to have a large refund because that basically means the government is holding your money interest free (to you, not them) for a year and then giving it back to you. It makes more sense for you to have this money in a high interest savings account so you're making money, not the government right?

Save money on drinking water

From many people like Clark Howard, you'll hear how buying bottled water is a waste of money. Clark says tap water is just as good as bottled water. I say show me some data because I'm not convinced. If you live in rural areas, I would venture to guess that public tap water isn't that great. Bottled water is convenient, but is very expensive in comparison to tap water. I'm not a fan of risking my health by drinking water straight from the tap. Here's an alternate solution to using plain old tap water or bottled water and it saves me a lot of money.

I purchased an "under the sink" filtration system made by Whirlpool about a year and half ago. It's a medium sized filter that installs under the sink on the cold water line that supplies filtered tap water from the normal cold side of the faucet. I'm no plumber, but it was easy to install and came with everything I needed. The lines just snap right into place. The filters last about 6 months or 2000 gallons and cost about $25. I use this filtered water for everything from cooking to drinking. I just refill bottles to take to work.

We drink a lot of water and the savings really adds up! I estimate that with the filter and tap water costs factored in, we spend around 3 cents per gallon of drinking/cooking water. We use about 10 gallons per week for drinking or about 260 gallons in 6 months. With bottled water costs of 79 cents/gallon (on average), that's about $410/year just for water! With our filter, we're paying $25 for the filter and about another $5 for the tap water (I'm guessing... it's probably way less than that). So we're saving around $350/year on water!

Now, if you like plain tap water and enjoy taking risks, you could be saving $60 per year by not having a filtration system. Good luck to you!