A Fresh Start!
Photo Courtesy of Tanatat
2012 is here and what better way to celebrate the new than by taking a fresh look at our finances? Are we saving accordingly? How are our investments doing, is our money growing or is it stale? Is our credit card company charging us too much in added fees? How about our utility providers, are they charging us too many services fees and what can we do about it?
Let’s take this time together to go over our overall financial health and pinpoint what we can make better. Next week, we’ll start by taking a close look at our savings, and then well sink our teeth into that stack of brokerage statements that have been sitting underneath out desk since last year. Each week we’ll take a look at a specific aspect of our finances and go over the bad, the good and the ugly so stay tuned!
A lifetime of free checking
When Bank of America announced its new monthly debit card fees, customers got upset. They started looking for ways to get around these fees by checking out better offers at other banks. One Long Island credit union in particular has been attracting these customers by offering new account holders guaranteed “fee free” checking accounts for life. Bethpage Federal Credit Union is offering new customers who open a Bethpage Bonus checking account a lifetime of no debit card fees, no transaction fees, no monthly maintenance fees, no minimum balance fees and no ATM fees for using other banks’ ATMs. The only fees they charge are the insufficient funds and overdraft fees. According to the New York Times, this credit union has opened 1,500 new checking accounts- double the regular account openings for a three-week period. Since more big time banks are trying to add all kinds of fees to customer accounts, offers such as the one this credit union is offering is sure to attract the customers these big banks are letting slip away.
Ways to Find Financial Peace (Part 1)
Photo Courtesy of Stefg74
In order to gain a foothold on your financially busy and complicated life, you’ll need to be proactive. Cathi Brese Doebler author of “Ditch the Joneses, Discover Your Family” and founder of Ditchthe.com has some good tips on how to find financial peace in our lives. “One of the things to focus on is on setting a budget.” she says Doebler.
Doebler gives three steps for budgeting:
1. Brainstorm all of the items you spend money on in a year, and then make a list of each of the items.
2. Go through the list and check off all of the items that are truly necessities. All of the remaining items are not necessities, but are called “wants”.
3. Decide which of the “wants” you can stop buying. Determining which items you “want” versus which items are necessities will help you to better manage your spending.
Joel Ohman, Certified Financial Planner and founder of CarInsuranceComparison.com suggests savers write down an action plan for getting on track financially. “This can make all of the difference in helping one to feel more relaxed and sleep better at night because the focus shifts from a financial problem to a financial plan,” he says.
He adds that carrying high interest consumer debt (especially when used to purchase non -appreciating and non- income producing assets) is almost never a good idea. “These are the biggest sources of worry, frustration, and stress in the lives of most consumers. Working to cut out this type of debt and staying away from it will go a long way to bringing peace and stability to your finances and your disposition.”
Ways to Find Financial Peace (Coming soon!)
7A4XCUGUMHJ4
Top reasons why we don’t save!
Photo Courtesy of Alan Cleaver
We all have excuses on why we don’t save enough. We have children, we want to go on a vacation, we just don’t have the time, etc, etc, etc. The list goes on and on till the break of dawn. Right? Well, the list goes on if we let it, but there are ways to sneak in savings.
Jonathan Stein, CEO of the investment site Betterment says, people regularly overspend and don’t save enough money to achieve the goals they have planned for the future. Whether their goal is to afford retirement, college tuition, or big-ticket purchases, saving with an eye towards future financial needs is key. In other words, “I live paycheck to paycheck. I save for short term things.”
“I have a savings account, isn’t that enough?”
Stein says, “People don’t take enough investment risk with their savings to achieve their goals. Instead of investing in stocks and bonds, they park their money in a savings account, which has its own risk: not keeping up with inflation.” He says that under-investing is what happens when people fail to see the huge opportunity cost of parking money in savings.
Sometimes we’re just too darn busy!
This one’s a biggie. When we fail to maintain our accounts, we lose. “People tend to slack off after they’ve set up their accounts, says Stein, “That’s like joining a gym and then never going to work out – you get little benefit.” It’s important to stick to rebalancing, contribution and diversification routines, or, if you’re subject to slacking, like most of us, chose a service that does these important things automatically for you he says.
Ways to overcome bad habits
How much can you contribute?
Stein advises savers to decide how much money they need to contribute regularly to meet their goals. “Work backwards from where you want to end up and understand that you’ll need to be patient with yourself and the markets.”
Maximize risk
Another strategy he suggests is to maximize the risk we’re taking with our savings, given of course our limits for risk tolerance because as he puts it, what may seem like playing it safe could actually be ruining our chances of ever hitting our financial goals.
Extreme Ways to Save on Gas
The national average of gas prices are going up, up, up! According to the Fuel Gauge Report produced by AAA, last year the average cost for a gallon of regular gas around this same time was $2.776, currently the price is $3.542, that’s a 27% increase.
According to Phil Reed, senior consumer advice editor with Edmunds.com, of all the states California and Hawaii have the highest gas prices “The west coast always pays higher gas,” he says, “Hawaii’s is high because of shipping costs, there are no refineries in Hawaii so shipping costs are added to the price of gas thus making it higher than average. California has taxes and a lot of additives put in for environmental reasons.”
12 Month Average for Self-Serve Regular
Source: AAA
Not surprisingly, in order to save on gas and stretch their fuel economy, some consumers are going to extremes.
Fill up your tank in the morning
Reed has heard of some out of the ordinary steps people are taking to save on gas. ”Some people fill up on gas early in the morning because that’s the time when the temperature is colder and when the temps are low, the liquid gas has more density.”
He explains that drivers get more energy out of the gallon of gas because it has a greater volume in the morning then later in the day when it’s warmer. While this concept is true in theory, some argue that the temperature in the tanks underneath the ground where the gas is stored doesn’t vary much to make a big difference.
“Magic” additives and driving on white lines
“People think they can find “magic” additives,” says Reed. He explains that some folks have even resorted to using acetone as a gas additive. “I wouldn’t recommend this but some people add this additive to their tank claiming it can boost their fuel economy.”
Hypermilers, drivers who push the limit on fuel economy drive with one of the tires on the white line dividing the highway to the breakdown lane says Reed. Supposedly, this allows less rolling resistance and gets them a better mileage gauge.
Why not use fryer oil?
Restaurant owner Carolyn Redendo says she’s had some customers who have approached her to obtain the restaurants used fryer oil. “They have converted their car so that it can take the fryer oil as gas. As a restaurant owner it usually is a cost to get rid of it, this way it is taken free of charge from us. The hardest part is just coordinating pick up times.”
These are indeed extreme ways to save on gas and some can be quite dangerous, so please don’t try to copy them. Instead follow these safe and harmless tips.
Consumer savings expert Andrea Worach offers a few.
- Always travel with cash. Gas stations advertise the price per pump for cash-paying customers since it’s usually 10 cents cheaper than the price you pay with a credit card. Many plastic paying drivers are unaware that the price they are paying is higher.
- Drive a little slower. Speeds exceeding 40 mph forces your car to burn fuel at a faster rate because it needs more energy to overcome forceful wind resistance. For highway motorists, driving less than 40 mph is not really an option so keep your speedometer at 60 mph or under. Going any faster will burn right through your gas.
- Smart phones have tons of “smart” apps to help you save money especially when it comes to finding the least expensive gas in your area. GasBuddy shows you a list of surrounding gas stations based on your location and their respective prices per gallon. CheapGas navigates you to the least expensive gas station on your route so you can easily find that cheaper pump that may be half mile off the exit ramp without getting lost. Other apps to test drive are FuelFinder and Carticipate which helps you find like minded neighbors seeking to share rides.
- Test out electronics or fuel efficient hybrid cars. Electronic cars go up to 80 miles before they need to be recharged which is great for local driving needs. There’s no better time than now to switch to a car that will cost you less on fuel than now as prices skyrocket at the pump.
