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!

New car vs. used car - revisited II

I got some better feedback from people this time concerning my comments about buying new versus buying used. So, I thought I would go for one more post here. Life with the Quinns commented that they bought a used Honda minivan for about $10,000 cheaper than new, but ended up spending about $10,000 in future repairs. E.C. commented that it can also make sense to buy new if you plan on driving the car for a long time. Also, it's helpful to finance a new car if you can get 0% or a very low rate rather than coming out of pocket for the full purchase price. That way you can keep the money in your account earning interest.

Like I've said before, you rarely hear the negative side of buying a used car from these radio and TV personal finance personalities. "It's always better to buy used!" No, actually many people have made out much worse with a used lemon and it cost them much more financially. Unless you're a mechanic and can fix you're own car problems, buying a used car can be a disaster.

Even many "lucky" people who have purchased used cars and had no problems will spout the same "always buy used" rhetoric. Yes, buying used is great financially if you luck out and get a genuinely good used car. But, this basically boils down to a financial risk with many variables involved.

So I'll leave it at this: Do your homework and don't get caught up in the idea that buying a used car is always more financially responsible, because sometimes it's not.

New car vs. used car - revisited

So I've caught a little flack from people saying how buying a new car is never a better financial decision over buying a used car. Once again, I will explain my view a little more in-depth on this topic.

In many cases, buying a used car is a much better financial decision versus buying a new car. There, I said it. But my point here is that you may buy a complete lemon of a used car (even with a warranty, it will be in the shop causing you problems) that may affect your job. It may be worth buying a cheap, reliable new car with a low payment and warranty. Now, obviously new cars can have problems as well, although it is less likely.

When buying a used car, you never really know how well it was treated by its previous owner. Mechanics, car salesmen, and car washers can work wonders on used cars and polish them up to look great. But looks may be deceiving.

If you have a new job or a tough boss, having an unreliable car may cost you considerably in the long run. Follow my logic: You get a new, decent paying job right out of college. You buy a lemon and it causes you to lose several days of work here and there and several more days of coming in late. You get fired because you haven't worked there very long and they see you as an irresponsible employee. You're out of work for say 6-8 weeks or you have to settle for a lower paying job in the mean time. Say your starting salary was $2000 (take-home pay) and now you've been out of work for 8 weeks, you've just lost $4000. This is probably more than any depreciation you would have incurred with the purchase of a cheap and reliable new car.

I know this is a stretch, but my point here is that there's much more to buying a used car versus a new car when considering the financial consequences.

Buying a used car may make sense in many cases financially, but it may not always pay off in the long run.

There will always be things you "need"

By "need," I don't necessarily mean need. Make sense? Every month or so, you'll hear people talk about something they need. But, these things may not always be necessities. Sometimes needs are really wants. There's nothing wrong with buying needs (wants) so long as you have the money to pay for them. Rather than buying these "needs" today on credit, it is important to save up and purchase them outright. And, by waiting to buy these "needs," you may realize they're just wants and you don't want them as much as you thought. It's important to get into this frame of mind at a young age. We live in a time when you can have whatever you want, whenever you want (within reason). But, it'll cost you.

Stop and think about these "needs". You're only fooling yourself.

Always plan ahead and bring a drink...

Now, this tip may sound cheap to many people, but who cares about that? It's a common misconception that millionaires are spend thrifts and buy whatever they want. Many millionaires spend their money wisely and so should you. Who cares if anyone thinks you're cheap!

When you know you'll be grabbing a quick bite to eat at a fast food restaurant... never buy the drink. Drinks range in price from $1 -$2 depending on size and this is ridiculously expensive. Bring your own drink and save a ton over time. You can buy a case (24 pack) of water at walmart for about $4. Or, you can refill your own bottles with tap water.... either way, you'll be saving money.

Even if you're not eating out, always keep a drink with you. If you're leaving the house for a few hours... take a drink with you. You'll save a lot of money over time by not having to purchase drinks at incredibly inflated prices.

When should you do your taxes?

Here's my way of thinking... if you think you'll be getting a tax refund, it would make more sense to prepare and file your taxes as soon as possible. If you think you might have to owe, it would probably make more sense to wait. For a quick and easy tax estimation to see if you'll get a refund or owe, visit this site:

http://www.hrblock.com/taxes/tax_calculators/index.html

File your federal taxes for free!

It's amazing how many people I encounter who don't know that you can prepare and file your U.S. federal taxes for free if:

• You made less than $54,000 in 2007
• You are under 50 years old (for some filing services)

Here's the site to start the process:

http://www.irs.gov/efile/article/0,,id=118986,00.html

You can choose from several companies to use and many of them have different requirements. And, if your state taxes income, you'll need to purchase the state product in order to prepare and file electronically in your state.

Hopefully many of you will find this useful.

Be conscious of your spending

It's important to track every penny that leaves your possession. To many, this may sound crazy. How can I possibly track every penny I spend? My question to you is: How can you not? You work hard for your money (I'm assuming), so how can you not know where you spend your hard earned money? I hear from people all the time, "I seem to deplete all my extra money at the end of the month." Now, emergencies and unexpected purchases pop up all the time, but it's important to manage these expenses properly by saving for these expenses. By saving extra money at the end of the month, you'll have money to pay for these unexpected expenses and won't need to rely on a credit card.

I think many people are afraid to really see where their money is going. It's much easier if you just turn a blind eye to it! But you can't!

Here's how I track my expenditures:

• I have automatic bill pay setup through my bank. I know what these expenses will be each month (or roughly, things like electricity fluctuate).
  
• I make a conscious effort to limit my spending when going to department or grocery stores. I set a budget before I even walk into the store and try not to go over this amount.
• I log into my bank account everyday and track my spending. I reconcile each transaction. Bank of America makes it easy with online tools to set budgets and track expenses. See my previous post here.
• I make sure I'm not going over my set budget for each category. If I am, I adjust accordingly in other categories.
  

Plug the holes in your checking account today. Make a conscious effort to understand where every penny you spend is going.

Live as cheaply as you can for as long as you can

It's in our nature to adjust our lifestyle according to our income. We get a raise and we then go out and buy a new car or bigger house. We might also buy new clothes or go out to eat more often. This is why there are many people out there making $150k+/year and are completely broke.

My advice for young people is to live as cheaply as possible for the first 5-10 years of your career. Buy or rent a modest home and live there for as long as possible. Keep your cars as long as they run. Every time you get a raise, don't adjust your lifestyle accordingly; save this extra money!

I know this is difficult because it's typically the first time in your life that you actually have a decent income. It opens up so many more opportunities to finance fun things like houses and cars. It sounds so simple: "all I have to do is make that monthly payment." But pretty soon you'll have several monthly payments stretched out over many years. The possessions you financed will get old over time and that monthly payment will become a chore and a burden on you and your family.

Stay out of debt and save up for large purchases. You'll save a ton in finance charges and you'll be in a better position to truly decide if you want to spend your "saved" money for an item. When forking over a large amount of cash, you may re-evaluate your potential purchase.

Utilize Automatic Deductions From Your Paycheck

When you're young and just starting out, it would be wise to set up automatic deductions from your paycheck. Besides contributing to your 401(k), many payroll departments will allow you to channel money from your paycheck to other accounts, including savings accounts.

So why would you want to do that you may ask? For one, you would be automatically saving. And because you don't actually have the money in your hands, you insure that it will go toward savings and not something else. Then, when you really need the money, it's there. It will help get you in the habit of automatically saving and pretty soon you won't even miss the money from your paycheck. Hopefully you'll completely forget about that savings account until you really need it.

Check with your payroll department to see if you can set this up.

If You're Young, Keep Investing (through good times and bad times)

If you are young and have started a retirement account of some sort. Or, if you are thinking about starting a retirement account, don't attempt to react to market fluctuations. Since the first of the year, the market has been tanking, literally. It's important to think long term here. You are periodically (throughout ups and downs) investing in the market. Some months (or weeks), you'll buy high and others you'll buy low. See my previous post on this, here. But overall you'll be saving for your retirement and watching it generally increase over the years. As with anything involving risk, it can't always go up, but overtime the trend should point upwards.

So what if the market is tanking and you're planning on retiring in 30 - 40 years. Keep periodically contributing all the way down and when the market recovers, you'll be making money all the way back up. As you get closer to retirement, then you want to start thinking about investing more conservatively and moving investments around accordingly.

Stick to quality funds and keep contributing at least every month. Times will be good and times will be bad, but overall, if you keep investing your retirement will be great!

6 Steps to Finding That Fine Line Between Being a Miser and Enjoying Life

I think it's important to make sure you put enough away for a rainy day, but I think often times many people over do it (by saving too much or spending too much). Life isn't always about saving for the future, it's about living too. There's a fine line between living life and saving money like a miser. It's important to find this line while you're young. Save enough to feel secure, but live enough so you have little regret. Contribute to your retirement, whether it's a Roth IRA and/or 401(k), etc. Build up an emergency fund and only spend within your means. Save up for entertainment and then enjoy life. Just don't over do it with spending and don't use credit cards if you can't pay them off each month. It's really pretty simple; save enough to be happy and spend just enough to be happy. Here are some steps:

1. Get a job, or two
   
2. Build emergency fund, about $2000 to start. Put in high interest savings account and try not to touch it for anything but emergencies
   
3. Contribute as much as you can to a 401(k) at work, at least 10% if possible
4. Start a Roth IRA and contribute the max each year, refer here
5. Save entertainment fund and use for fun
6. Don't rely on credit cards
   

Don't Miss out on Free Money - 401(k)

When students graduate from college and enter the workforce, it can be difficult for them to think about retirement. It is, after all, a long time until retirement. And, this is typically the first time the graduates are starting to make real money. Many employers offer a match on the 401(k) up to a certain percentage contributed by the employee. Say for instance you contribute 6% of your paycheck, your employer may match that 6%. Or, some companies match half, or a third of that. However, the important point here is that if your company matches, it would be silly to not get this "free" money contributed to your 401(k) each month.

Here's some data: Say your first job pays $42,000 per year or $3500 per month. If you contribute 6%, or $210, to your 401(k) and your employer matches this 6%, that's another $210 of "free" money going into your 401(k) each month. Looking at the numbers that way, it's a little hard to pass up, huh?

I know it's difficult to give up even 3% of your paycheck especially when you've been living off Ramen for the last several years, but if you start contributing to your 401(k) from day one, you won't miss that money and it'll have more years to compound and grow. The earlier you start, the more time your money has to grow and the better off you'll be in the future. It will pay off.

Bad Credit - Vicious Cycle

Young people these days face many credit obstacles. Take for instance, a college student goes away to school, takes out a few credit cards, runs up the balances and then graduates. This student then has a difficult time finding a stable job and his student loans become due. Not being able to make ends meet, the student misses a few payments on the credit cards and things begin to get out of control. Now this student applies for a job and everything is looking promising, but the potential employer runs a background check which includes a credit check. Background check comes back fine, but credit check does not. The student is not offered the position.

This is a scary prospect for many young people these days. We get into a little credit trouble here and there and hope to get back on our feet and fix some of our wrongs, but it's exceedingly difficult when an employer looks at our credit.

It's crucial that young people especially learn how credit mistakes can affect them for a very long time. It can be a vicious cycle; get credit, lose job, miss payments, find job, lose job because of bad credit. Now what?

Don't get caught in this cycle - Promote credit education!

Roth IRA - What if laws change?

Tune into any personal finance TV or radio show these days and you'll hear many praises for starting a Roth IRA. Simply put, a Roth IRA is a personal retirement account that allows qualifying individuals to put after-tax money into an account and (hopefully) withdrawal tax free funds at retirement. There are some income requirements and contribution limits that change from year to year. For additional information visit: IRS.gov.

So, you may be thinking that's all well and good, but what if the government decides to change the current Roth IRA laws and charge you tax in the future? Many people consider this highly unlikely, but it is possible and there's really nothing to protect those of us contributing to Roth IRAs. If you're like me, you may have approximately 30-40 years until retirement. Many things can change in this country in the course of 40 years.

When listening to people sing the praises of Roth IRAs, you'll rarely hear that the government can change these laws at any time. Just keep in mind there are no guarantees in life. What may seem beneficial now, could turn into a future detriment.

"Maxed out" - Not me!

I've heard of this documentary before, but never had the opportunity to watch it. I ran across it on Google videos and have to say it's worth watching. There is a lack of accountability portrayed on this film, but my post is not concerned with this. People make mistakes. Being in credit card debt, I can definitely sympathize with many in this documentary. Credit card debt is something you can overcome! My wife and I have made considerable progress in the past year. We have lived on as little as possible and put as much as we can toward our credit card debt. I'm happy to say that we will hopefully be credit card debt free in a few months. This has been an incredible burden hanging over us for a couple of years and I'm starting to see the light!

Watch this documentary; show (or send) it to your friends and family. If you have teenagers and/or college students, show them this video. Explain the many pitfalls of credit cards. But above all else, tell these people everything can be fixed no matter how far in debt you are. The "fix" may not be quick or easy, but is excessive credit card debt a reason to take your life? The answer should be clear to many, but alas many people feel as though it's their only way out.

Promote credit education.

Save Money on Your Heating Bill

As temperatures plunge this winter, here is a tip to save energy. Please note, I am from the south (Georgia), so I don't know how well this really works out in the north. Also note: this tip is for people who have a bedroom and no kids who stay in other rooms of the house.

• Lower your thermostat at night (or configure your programmable thermostat). ~60 F works well in Georgia (on nights when it gets down to the 20's). You'll have to experiment here.
  
• Buy an inexpensive space heater
• Close your bedroom door and seal it the best you can (door draft pillow thingy for the bottom of your door)
• Run the space heater for about an hour before you go to bed. Our heater uses 1500 watts @ ~10 cents/KWH (with taxes, etc. - to find yours: look at your power bill and divide your total KWH by bill amount $) or about 15 cents per hour according to my Kill A Watt Power Usage Monitor
• Turn the heater off and sleep comfortably without heating your whole house.
  

This assumes you're using electric heat... like I said, I'm from the south so I have no idea how well this works in the frozen north or with heating oil, etc. I would appreciate some comments from you northerners.

5 Money Saving Tips for Pet Owners

If you are a pet owner like me, you know how expensive owning a pet can be. But to me and probably most other animal lovers, the joy your pet brings you is more than worth the cost. Here are some money saving tips I've encountered along the way:

1. Buy large bags of pet food versus smaller bags and store in an airtight container to preserve freshness - For instance, an 8 lb bag of science diet dog food runs about $10 ($1.25/lb), but a 40 lb bag can regularly be found on sale for around $30 (75 cents/lb) - a 40% savings!.
   
   
2. Buy toys at the Dollar Tree. I've purchased many expensive toys that don't last as long as the Dollar Tree toys. Dollar Tree toys can be cheaply made as well, so please inspect all toys regularly.
   
   
3. Choose your vet wisely as they can vary greatly in price even within the same town. Ask for prices up front before they care for your pet. Ask if they offer a discount for full payment in cash.
   
   
4. Take good preventative care of your pet to prevent future expensive and painful health problems. Invest in good quality food (just look for good deals on high quality supplies) - Cheaping out here just isn't worth it for you or your pet.
   
   
5. Check online for pet medications. Our vet is surprisingly competitive in price to online stores and they treat us fairly on care, so I buy them from our vet.
   

Stay away from the snack machines

I'm always amazed at the number of people I often see going to the snack machine every morning. I understand there are times when you've forgotten to bring a snack or drink to work and the snack machine offers the convenience to get what you want. However, I don't understand the people who you consistently see near the snack machines every morning. Why would I want to pay an inflated price for a drink, when I can go buy a case of drinks at a grocery store for less than what people spend on 5 drinks a week at the snack machine.
I really wonder if people just don't realize they are paying a much higher price. Maybe they just say "well, it's only a dollar and I'm thirsty." Maybe they're just too lazy to go to the store and buy drinks ahead of time. Maybe they just don't think ahead or know any better.

I think it's important to think about these little financial decisions we all make on a daily basis. So when you know you'll be at work all day:

• Take a few minutes the night or day before and figure out what you'll need for snack or drink
• Purchase these items in bulk from your local grocery store or club
• Avoid the snack machines
• Be amazed at the amount of money you save week after week

Excessive Student Loan Debt - Bad Decision

Many college students these days are extending themselves (in the future) for a good education. Watch TV and you'll see quite a few commercials from private companies offering students loans up to $40,000 per year. Many students are coming out of expensive private schools with $50k, $75k, or $100k or more in loan debt and lucky to have a job making $25k a year. Many of these students were fooled by society or their parent's generation to get a good education at "any" cost. "It'll pay off in the future!" Well I'm here to tell you that for many students, it probably won't pay off or for at least 20 years after graduating.

The cost of college has gotten prohibitively expensive, yet many people from past generations think of college as a way to guarantee a spot in life above most. With so many college students and graduates, it's hard not to feel as though a Bachelor's degree is the new high school diploma, while a graduate degree is the new college degree and even that I wonder about some days.

I think it's important for college students to look at the future and not get caught up in the "getting a college degree at any cost" mentality. I came out of college with around $15,000 in student loan debt with some additional credit card debt. I've since consolidated the loans with a rate of 3.375 and have slowly paid the balance down to around $12,000. I wish I didn't have the loans, but the interest rate is quite low and therefore low on my list to pay off. And, since I've gone back to graduate school, these loans have automatically gone into deferment. I'm not sure I like the idea of these loans automatically going into deferment for me. One of the loans is still accruing interest and it seems as though these companies like the idea of you delaying payment for as long as possible. I can't imagine having over $100,000 in student loan debt! Good luck to the future generations!

Learn how to conserve energy

I recently acquired a product called the
Kill A Watt Power Usage Monitor. This product will plug into any outlet in your house and monitor whatever electronic device you have connected to it. It will allow you to determine if you have "vampire" electrical devices that draw power even when they are turned off. It will also estimate the KWH for a device to give you an idea of how much power a device pulls. I intend to use this throughout my house and report my findings along the way.

Using Compact Fluorescent Light Bulbs

I've slowly been converting all our incandescent light bulbs to compact fluorescent light bulbs in an effort to conserve energy and therefore lower our electricity bills. I had been turned off by these bulbs due to:

• Price
• Potential mercury hazard (will have to dispose properly when the time comes)
  

While at walmart a few weeks ago I noticed the bulbs (walmart brand) have come down considerably in price (although they're still considerably more expensive than incandescent). So I bought a box and converted a few fixtures and lamps in our house and have to say I'm pretty happy with the light they put out. Even at much lower wattage, the bulbs seem to produce much more light (although the light seems to affect how colors are perceived). I have since, bought more bulbs and basically converted the entire house now. Hopefully I will start to see a slight decrease in our electricity bill. I will post my findings in the next few weeks.

Utilize 0% Interest Promotions on Large Purchases

Been to a retailer lately and noticed 0% interest for a set period of time on certain purchases? Two retailers that come to mind are Circuit City and Lowe's. For instance, purchase a TV from Circuit City over $999 and receive no interest for 36 months. If you're looking to make a large purchase, this may be an opportunity to make more money. Here's how:

• Use the 0% promotion
• Keep that money in your high interest savings account
• Calculate your estimated monthly payment in order to have the item paid off in the required time frame
• Set this payment up to pay online through your online bank so you don't miss a payment
• Have the item paid off and have the interest you earned from having your money in your high interest savings account

But be careful to make your payments on time and calculate correctly or you may face fees or penalties.

Found this great money blog

Check out this great money blog for more personal finance information: shauna26.wordpress.com

Middle Class Squeeze

Do you consider yourself middle class? What is middle class these days? Sometimes I feel like my wife and I make a decent income and all is well and other times I feel as though we’re barely making forward progress. It seems as though everything has gone up considerably in price in the last few years. I remember when gas was actually affordable. I remember when we could get a cart full of groceries for around $50 without using coupons. Now it’s difficult to get out of a grocery store for under $80-$100. We have definitely adjusted our lifestyle accordingly as we drive less and look for better deals. I often wonder what the future holds for the middle class of this country. Have you adjusted your lifestyle because the cost of goods have gone up? Do you think many other people have done so as well?

Buying a used car versus buying a new car -- may not always lead to a beneficial financial decision

Turn on the TV or radio these days and any financial advisor will tell you that buying a new car over a used car is one of the worst financial decisions young people can make today. Does buying a new car versus buying a used car always have to be financial suicide? There are obvious reasons why buying a new car is troublesome:

• · Depreciation: according to Edmunds.com, a $20,000 new car depreciates 12.2% of its value in the first year

• · Typically have to carry more expensive insurance

It is my argument that purchasing a new vehicle over a used one is not just a simple numbers game. I think it’s important to assess the risk of such a purchase as well. Also, there are many other possible costs associated with used vehicles. These TV and radio financial advisors will tell you to go out and buy a $2000 car and pay cash for it. What kind of car is the average person going to get for $2000? A car that probably:

• · Isn’t feasible to take on extended trips (renting a car for trips = more expenses)

• · Will require minor to major maintenance

• · Be less fuel efficient (possibly due to improper maintenance, but this isn’t always the case)

• · Be less reliable than a new car

• · Embarrass your kids (joking here; probably true, but who cares what anyone thinks)

As you can see, there are many unknowns when purchasing a used vehicle and if you’re not a mechanic, you may be in for more than you bargained for. Would I personally want to invest in a $3000 transmission on a $2000 car? No and obviously anyone would tell you to go buy another $2000 car. Well at what point does this become absurd and cost more than making payments on a new, reliable, and under warranty new car? Believe it or not, I’m not a car salesman and I’ve never been one. I have purchased used and new vehicles and I’ve been burnt on both, but at least the new cars were under warranty.

I’m not defending one position over another; I just think it’s important to point out that for the average person buying a used car, it may not always lead to a smart financial decision. If by having an unreliable used car, a person is consistently late for work and loses her job, then a used car purchase can lead to a poor financial decision. I think it’s important to thoroughly research ones needs and make a decision based upon many other factors in addition to just the cost, as the cost is typically the only message I hear from financial advisors these days.

ING Direct Account

I've been an ING Orange savings account holder since September '07. They may not offer the best rate for an online savings account, but overall I'm happy with the site's ease of use. When I initially signed up, I contacted a random stranger offering a link for a sign up bonus of $25. When I funded my account with $250 or more, I got $25 added to my account and he made $10. Not a bad deal. So, if you're interested in signing up with ING Direct, please send me an email at slapdash.blog@gmail.com and I'll send you a referral and we can both win!

Roth IRA

About 9 months ago I began investing in a Roth IRA through Fidelity. What attracted me to Fidelity is the ability to make monthly contributions and not need a typical $2,000+ initial funding. Since I have quite a few years until retirement, I have invested in the Freedom Fund 2040. Fidelity names their funds after your "projected" retirement date. Over the course of 9 months and contributing $1800 I have managed to lose about $80, most of which occurred this year '08. I think there's a great benefit to investing into my fund monthly. Some months are up, some months are down, but by buying in every month, I'm not locked into paying what may be a high rate at the beginning of the year. If the market goes down as is predicted this year, I will continue to buy on the way down and hopefully be better off in the future when the market heads back up.

Personal Finance

I have been very interested in personal finance over the past few years and I'm always looking for ways to manage my family's budget. I have developed several scripted tools over the years and they have worked out ok, but I have to say I'm very impressed with Bank of America's new portfolio tools. I know, BOA... cringe... I have been using these tools for several weeks now and I am very impressed with the ability to effortlessly track my net worth. BOA makes it very easy to add and track accounts.

My first blog post

This is my first attempt at blogging. I routinely encounter many different and interesting topics daily and look forward to posting them here. Please check back daily!