There Are Many Ways to Save on Car Costs

Do you own a car? You probably do, and that means you probably know how expensive it can be. Did you know that the average person will spend over $500,000 on vehicles and vehicle-related expenses over their lifetime. It really starts to add up. Vehicles don’t last forever so you need to replace them over time, you need to put gas in them, and then you have to think about insurance and maintenance–and that’s just in today’s dollars, not adjusted for inflation. Half a million dollars just to drive a car. When you think about it, that is kind of absurd when the average retirement account balance for most baby boomers these days is under $50,000. No wonder our cars are making us poor. How wealthy would we all be if we took the money spent on owning a car into an investment account?

Unfortunately, cars are a necessity for most of us. Without an extensive public transportation system we rely on buying our own cars so we can get around. It’s one of those things that we can’t escape. But just because it’s a necessary expense that doesn’t mean there aren’t ways to save on your car expenses. In fact, if you’re good you can literally save hundreds or thousands of dollars each year on your vehicle expenses. Save $1,500 a year for the next 40 years and that puts $60,000 in your pocket. Then if you use that savings wisely you’ll be living comfortably in your later years. Here are 28 tips that can help you save money on your car expenses.

How to Save Money on New Car Purchases

• Keep your car longer instead of trading in or upgrading every couple of years. Not only does the cost of new cars rise each year, but cars depreciate quickly, and when you trade frequently, you lose money on low trade-in values. And don’t forget about interest if you have to finance part of the purchase. Buy a good quality car and keep it for at least five to seven years. Potential Money Savings: $400-1,000/year.
• When buying a new car, consider the smallest model for your needs. Smaller cars are often cheaper, and because they’re lighter, they usually get better gasoline mileage. In addition, insurance tends to be cheaper on most cars compared to a large SUV. Potential Money Savings: $400-600/year.
• When buying a new car, consider the impact that various options have on fuel economy. For example, you sacrifice a few miles per gallon when using air conditioning on the highway and even more in stop-and-go traffic; automatic transmissions get about five miles per gallon less than manual transmissions; and six-cylinder engines get about four to five mpg less than four-cylinder engines. Potential Money Savings: $400/yr or more by choosing the right options.
• Don’t buy credit life or credit disability insurance through your car dealer when purchasing a new car. Some dealers do a hard sell on these coverages, but they are highly overpriced, and if they’re folded into your car loan you not only end up paying 100% to 500% more than you should for the coverage, you also pay interest on it. Stick to regular life and disability insurance through your employer or an individual policy. Potential Money Savings: $300-500.
• Be extremely wary of purchasing service contracts or extended warranties on new automobiles through your dealer. Many of them have very limited coverage (in spite of what the salesman may lead you to believe) and they cost much more than policies purchased directly from providers. Make sure you understand what your current warranty covers so you’re not just throwing money away. Potential Money Savings: $500-1,000.

How to Save Money on Maintenance

• Keep your car properly tuned. A poorly tuned car uses between 25% and 33% more gasoline each year. It’s also cheaper to pay the cost of a tune-up than it is to repair a major problem. Potential Money Savings: $50-100/year.
• Change the oil and oil filter in your car according to your owner’s manual. A 3,000 mile oil change may not be necessary since many cars are now built to go much longer between oil changes. Potential Money Savings: $50-100/year.
• Check your car’s air filter monthly. A dirty filter drags on engine efficiency and reduces gasoline mileage up to 10%. You can clean the filter by removing it and blowing it with an air hose, or you can replace it. Potential Money Savings: $130/year or more.
• Use the proper tires for your vehicle. Having extra wide, large, or performance tires may drag on your gas mileage.  Potential Money Savings: $100/year or more.
• Unless your manual suggests it, don’t waste money on premium gasoline. For most cars, premium gasoline offers no benefit. Unless your car has a high-performance engine and your manufacturer recommends a high-octane gas, use the less expensive gas. Premium gas costs 10% to 15% higher than regular. Potential Money Savings: $200-400/year.
• Check your tire pressure regularly. You can improve your gas mileage by around 3.3 percent by keeping your tires inflated to the proper pressure. Under-inflated tires can lower gas mileage by 0.3 percent for every 1 psi drop in pressure of all four tires. Properly inflated tires are safer and last longer.. Potential Money Savings: $100-250/year.
• Add thousands of miles to the life of your tires by having them balanced and rotated once a year. In addition to destroying the tread, improperly balanced tires can wear out your shock absorbers and damage your suspension system, leading to more expensive repairs. Potential Money Savings: $125-200/year.
• Check fluid levels regularly. Make sure your power steering and radiator fluids are at proper levels with each oil change. Also check automatic transmission fluid, brake and clutch fluids. A bottle of fluid costs just a couple of dollars. Replacing a broken or worn part due to low fluids will cost you hundreds. Potential Money Savings: $50-300/year.

Save Money on Gas

• Pump your own gas if you can. Self-serve gas is usually 5% to 10% cheaper than full service. Potential Money Savings: $50-100/year.
• Combine errands when driving. If you plan your drive so that you hit all of your errands in one outing instead of making extra trips you’ll save on gas. If you save just 10 miles a week that’s over 500 miles each year. Potential Money Savings: $25-75/yr.
• Purchase your gas with a cash-back rewards credit card. You can likely save up to 3% on all future gas purchases. Potential Money Savings: $50-100/year.

Save Money on Insurance

• Ask your insurance agent how much money you can save by raising the deductible on your auto collision insurance. Often, raising the deductible from $250 to $500 can save you 10% to 30%. Increase it from $500 to $1,000 and save even more. If you have a good driving record, you could come out ahead. Potential Money Savings: $50-225/year.
• Make sure you notify your insurance company of all the safety features that qualify you for discounts on auto or homeowner’s insurance, such as automatic seat belts or air bags in your car, smoke detectors in your home, etc. Non-smokers or non-drinkers can often get additional discounts and it requires little more than letting your insurer know. Potential Money Savings: $50/year.
• If you drive an older car, consider dropping collision and comprehensive coverage (but don’t drop liability coverage). Collision coverage is required if you have a car loan, but for older cars that you own free and clear, weigh the car’s book value (what the insurance company would pay you if the car was totaled) against your collision premiums. If your car is over five years old or is worth less than just a couple thousand, keeping collision and comprehensive coverage may not be worth what you’re paying in insurance premiums. Potential Money Savings: $100-300/year.
• Before buying a new car, ask your insurance agent whether the model you are considering will require a surcharge due to higher theft, damage or repair costs. Certain vehicle makes and models do carry higher premium.  Potential Money Savings: $50-200/year.
• Shop around for insurance. If you’re getting good service from your company and are happy with the rates, you may want to stay with them, especially if you have had accidents or tickets. But if your record is good, shop around to see how much you can save, then decide if the savings are worth the switch. Potential Money Savings: $50-200/year.
• Consider combining your auto and homeowner’s insurance under one policy. Many insurers give a 5-10% discount for having multiple policies. Potential Money Savings: $50-200/year.
• If you have a high school or college student under 25-years old in your household, ask about the good student discount for auto insurance. If your student qualifies, you could save up to 25%. Potential Money Savings: $100/year or more.
• This is common sense, but avoid tickets for speeding or moving violations. Many insurance companies give a discount of up to 20% if you have not had an accident or ticket for three years or more. Potential Money Savings: $100/year or more.

Save Money While Driving

• Car pool to work if you can. By sharing the drive with just one other person, you could save an average of $20/month or $200/year in gasoline alone, if your commute is 20 miles round-trip each day. Sharing the driving with two others increases your savings even more. Savings vary depending on the length of your commute and the current price of gas. In addition to savings on gasoline, you’ll save maintenance costs and wear and tear on your car. Potential Money Savings: $400-700/year.
• Another benefit to car pooling is that it reduces the annual mileage on your car. Since this reduces the risk of accident, your insurance company may charge you less for your coverage. Potential Money Savings: $25-50/year.
• Wasteful driving habits can double your fuel consumption. Develop gas-saving habits, such as: (1) always accelerate gently (2) watch traffic ahead of you so you can anticipate slow-downs and avoid stops (3)coast up to traffic jams by lifting your foot off the gas pedal instead of approaching at full speed and slamming on the brakes. It takes 20% more gas to accelerate to normal speed from a full stop than it does from four or five miles per hour (4) don’t drive too fast or too slow. It takes 20% to 30% more gas to drive at 70 mph than 50 mph (5) maintain a steady speed on the highway by using the cruise control. Avoid getting stuck behind slow cars where you have to slow down to their pace and then speed up to pass. Potential Money Savings: $200/year or more.
• Don’t warm your car up by letting it idle for lengthy periods of time. Modern car engines are running efficiently just seconds after ignition so a long warm-up time is not necessary. And idling wastes about a quart of gas every 15 minutes. Potential Money Savings: $20/year.

Hopefully you’ll be able to use some of these tips to keep your car expenses to a minimum. Saving $20 here and $50 there really does add up. There are probably other tips out there, so what have you found works best for you when it comes to saving money?

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

28 Tips to Save Money on Car Expenses and Save Thousands of Dollars

Mistakes can be costly.  With that being said, there are two ways to get out of a financial crisis.  The first strategy involves assessing the amount of money being brought into a household on a monthly basis and employs a multiple stream of income approach to increase a family’s finances.  The second tactic involves a disciplined plan of attack that decreases expenses and pays down debt.  Each step is crucial for long-term sustainability.

Without an adequate amount of money coming in, men and women have a tough time sticking to a budget.  Items that once were paid for with cash now get put on charge cards which generate interest and cost a person more in the long run.  Add late fees, overdraft charges, and penalties and you have a recipe for disaster on your hands.

These financial blunders damage budgets and halt progress economically.  Not entirely avoidable in some cases, they are:

• Cashing in your 401K plan early. If you withdraw funds from a retirement plan before you reach 59 ½ years of age in most cases, you are subject to a 10% additional tax on early distributions.  This is on top of the taxes you would normally pay on the amount of money taken from the account.

• Not filing your taxes on time. The IRS charges a penalty for filing taxes late to the tune of 5% for each month or part of a month that a return is late.   This amount never exceeds more than 25%.  The penalty is based on the tax not paid by the due date and disregards extensions. Filing is easy and often free with TurboTax.

• Paying exorbitant interest rates on your credit cards. A lot of people fail to read the fine print.  Credit card companies entice consumers with promises of low introductory APRs and rewards programs.  Once you accumulate a balance, however, things change rather quickly.  Amendments are made on policies and percentage rates slowly rise.  Grace periods are shortened and late fees are charged.  Rewards points become harder and harder to redeem.

• Not getting a fixed rate cell phone plan. Extras like pay-as-you-go text messaging and internet access add extra costs to skyrocketing usage charges.  Choose a carrier with unlimited local and long distance calls for a fixed rate to avoid overages.  Know the conditions of your plan and ask for a discount.  You can save yourself up to 30% with one phone call to customer service.

• Spending more than you make and living beyond your means. Many people experience lifestyle creep with dual incomes.  Bills increase as income increases.  Rather than pay off the debt already owed, men and women continue to spend ridiculous amounts of money buying new things.  Higher mortgage and car payments are taken on and the amount of money being put in savings remains at a standstill.  If one of the dual income earners loses their job, they have a hard time staying financially afloat.  Without the recommended six months of living expenses saved, many couples have their vehicles repossessed or lose their homes to foreclosure.

You can avoid making these costly errors by employing multiple streams of income, paying off debt, reducing your costs of living, maximizing your retirement savings, and filing your taxes on time.

A savvy person is one who knows how to stand up to life’s challenges.  Overcoming financial obstacles becomes easier with a plan.  Make yours today and reap an abundance of rewards including more financial freedom and less dependency on credit.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Five Financial Mistakes That Can Cost You Significantly

These Tips Can Help You Simplify Your Finances Any Time of Year

While we’re just a few days into the new year a lot of people have set some new goals or made some resolutions as to how to improve their finances. The new year is a great time to begin making changes, you don’t need a calendar to tell you to do these things. Sure, there isn’t an instant cure for unemployment, the economy, or the housing market, but there are still some steps you can take today that will simplify and improve your finances.

1. Organize

One of the first things you can do that will help you improve and simplify your finances is some organization. Have you ever sat down to do your taxes and realized you don’t know where all of your receipts, statements, or tax documents are? It’s okay, we all do it, but being organized like this can prove costly. You could miss a deduction, waste time looking for things when you could otherwise be working, or even miss an important tax deadline. It’s not just for taxes, either. Just think about all of the financial documents you receive on a regular basis. Bank and credit card statements, investment account information, letters from your mortgage company, copies of your property taxes, utility bills, and the list just goes on and on. What do you do with this information as it comes in?

It’s time to organize all of these documents. At the very least you should be creating a safe place to store important financial documents. It could be in a lock box or file cabinet, but one way or another you want to keep these items tucked away safely and where you can easily retrieve them if necessary. Next, find a way to separate different types of documents. Usually, just a simple collection of folders can take care of this. Keep a folder for your receipts that might be used for tax deductions, keep your investment account statements separate from your bank account, and so on. It doesn’t matter how you develop your system as long as you are comfortable in using it.

Go Paperless

If you haven’t been forced into paperless statements already I’m sure you’ve heard about it. Many companies are urging customers to go paperless, and it could be a good idea for you, too. For one, every account that you have setup as paperless is one less account you have to worry about organizing the paper when it gets mailed to your home. Instead, all of your information can be retrieved online 24 hours a day. Granted, the trade-off might is that you will have to rely on electronic reminders when it comes time to pay a bill, but you should be able to save time and money since you don’t have to buy stamps and you can make payments or account changes on your own time.

2. Automate

After you’ve organized your finances it’s time to automate them. In this day and age it’s usually harder to find an account or financial task that you can’t automate than ones you can. From getting paid to paying the bills, in many cases you can set it up so that you never have to cash or mail a check again. This can save you a lot of time and remove some of the worry when it comes to managing your day-to-day finances.

Automate Savings

The biggest benefit of automating your finances is when you’re talking about automatic deposits into savings or retirement accounts. This is how you pay yourself first. If you have money automatically deducted from your account each week or month you’re ensuring that the money actually gets saved. Over time, this will really start to add up and you’ll be glad you did it. So, start with creating an automatic savings contribution. It’s easy enough to set up an automatic and recurring transfer of funds with your bank that will move money from your checking to savings. Once you set this up you’ll never have to worry about transferring money into your savings account again.

Next, look at your retirement contributions. If you have a 401(k) through work this is already automated. Your contributions are taken right out of your paycheck, and that’s great. But what if you don’t have a 401(k) or you use an IRA instead? You can still automate this process. Every brokerage or fund company will allow you to set up systematic contributions. So, just like with your 401(k) you could actually set up a weekly or bi-weekly IRA contribution that coincides with your pay day. And there you have it, the money is sent off to your retirement account before you even have a chance to spend it.

The real benefit is that automated contributions made frequently hurt your bottom line less than waiting and making larger lump sum contributions. For example, if you’d like to maximize your IRA this year you’d need to contribute $5,000. For many people, that is a lot of money to move all at once, but with automatic contributions each week that goal becomes much more manageable. In fact, if you start at the first of the year you can maximize your IRA by contributing just $96.15 a week. If you take into account that you actually have until April 15th to make prior year contributions you could technically stretch that out further and make it a 75 weekly contribution. As you can see, it isn’t going to hurt as bad making a weekly deposit rather than waiting until the end of the year and having to come up with a large chunk of money.

Automate Expenses

Automation doesn’t just deal with building savings and investment accounts. In fact, one of the most powerful financial tool is to automate your bills. Do you hate sitting down to add up what you owe each month and then either log in to a bunch of different accounts to manually make payments or physically mail a check? These days, you usually don’t have to. Whether you use automatic bill pay through your bank or directly with the vendor, you can set up automatic payments for most of your expenses.

This is especially useful when it comes to regular monthly payments that don’t fluctuate much. Your mortgage, car loans, student loans, some utilities, etc. You know you have to pay these bills each month and they rarely, if ever change, so why waste time each month worrying about making the payments? Put these on autopilot! By doing so you’ll avoid late fees, stamps, and free up some of your time so that you can do more meaningful things. After all said and done, you should be able to limit your time paying bills to just a few minutes a month.

3. Analyze

Now that you’ve organized your finances and put virtually everything on autopilot, it’s time to take some time to analyze how things are going. How are your investments doing? Are you really using the best bank? Is your money earning enough interest? And have your financial needs changed in the past year? If you don’t take the time to sit down and really analyze your overall financial situation at least a couple times a year it won’t matter if you’re completely organized and automated. You may still be headed down the wrong path.

Investments

Let’s start by taking a look at your investments. How are they doing? This is a bit of a subjective question, but if you take the time to understand what’s in your portfolio and compare that to what the expected return is given the economic conditions you should be able to get a rough idea of whether or not you’re doing well or not. But it’s not just about if you’re doing good or bad in the market. You also need to regularly look at your investments, see if the fees you’re paying are reasonable, whether or not you have the right allocation, and rebalance. A good portfolio from two years ago could be a nightmare today. The funds could have changed, added fees, and a dramatic market swing could have turned that perfect portfolio into a real dog. You want your investments to be simple, but remember–’buy and hold’ is not the same as ‘buy and forget.’

Don’t forget about your old accounts. Do you still have a small 401(k) left over from an old job? Sure, it might be doing just fine where it is, but why not consolidate? Moving it to an IRA, existing or otherwise, can make your life easier and give you more control over your money. A lot of times people just leave their old accounts open because it can be a bit of a pain to move the money. Even so, it goes back to the first tip above: organize. Consolidating may be good for your portfolio, but it also means less to track and file away. If you’re thinking about rolling over your 401(k) I’ve put together a helpful guide that explains how to roll over your 401k.

Banking

When was the last time you changed banks or credit unions? A bank that was good for you a year ago may not be best for you today. Banks are regularly changing accounts, adding or removing fees, and changing their overall level of service. I know, the thought of changing banks is pretty low on my list of things I want to do, but don’t let apathy cost you. If you are unsatisfied with your bank, go ahead and explore other options. At the very least, go into your current bank branch and speak to a banker or manager about your accounts and what your needs are. You may be able to make changes that save money without even switching banks.

Let’s talk about online savings accounts for a moment. A few years ago there were a ton of different banks offering attractive interest rates and signup bonuses. If you’re like a lot of people, you opened a lot of different savings accounts to make a few extra bucks. The online banking landscape has changed over the past year and the rates aren’t what they used to be and there are fewer bonuses. So, you probably stopped chasing rates, but what about all of those bank accounts? Do you have money sitting at 5 different online banks all earning virtually the same interest now? There’s really no reason to have money spread out all over the place. It just makes it harder for you to keep track of everything for little or no financial gain. Instead, find a good high-yield savings account and consolidate. Unless you’re able to get an interest rate more than 0.5% higher or are dealing with upwards of $100,000, the benefits of chasing rates these days don’t outweigh the cost.

Overall Financial Needs

Finally, you need to spend a few minutes analyzing your financial needs and how they may have changed. Our goals and financial ambitions don’t remain constant. We all go through major events in our life that will dramatically change how we value money. Having a child, getting married, getting a divorce, moving, or changing jobs are just a few things that can completely alter your financial needs. What has changed in your life, and do these changes require you to make any financial changes? This isn’t something I can help you with, but instead I can only tell you to take a look at your life and determine what changes may need to be made financially.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

3 Things You Can Do Today That Will Improve Your Finances in 2010

2009 saw its fair share of economic hardships.  With bank closings, bad mortgages, and unemployment rates at an all-time high, people found themselves cutting back and doing without items that they once purchased and enjoyed.

Family vacations became shorter while the average workday got longer.  Items like eggs, milk, and gasoline gradually increased in cost and ate away at even the most liberal budgets.  People scaled back, Freecycled, and bought secondhand but could not help feeling the throngs of financial uncertainty.

With the promise of change serving as a backdrop for the previous year’s Presidential Election in the United States, not everyone was convinced that the nation was headed in the right direction.  Topics like health care reform and government bailouts were heavily debated on Capitol Hill.

In the worst of times, select cities triumphed.  Communities came together and people from around the world shared stories and advice concerning budgeting and other money related matters.  Towns printed their own money as a way of stimulating local economies and people learned the power of bartering goods and services through websites and swap meets.

Self-sufficiency became a hot topic as people started growing vegetable gardens, making their own clothes, and repairing items by hand with more fervor than years before.  In a sense, many people were more efficient in stretching their dollars.

Although I cannot predict this year’s financial forecast, I can offer you a few thoughtful tips that will help you achieve prosperity in 2010.  In no particular order they are:

1. Spend less. Find ways to live below your means.  Lower the interest rates on your credit cards.  Bundle service packages.  Skip all the extras offered with your cell phone.  Ask for discounts.
2. Make more. Create multiple streams of income.  Make the internet work for you.  List items that you no longer need on Craigslist, eBay, or Amazon.com.  Start a small business on the side.  Join the ranks of Stay-At-Home Moms and Dads and telecommute.  There are a number of ways to make extra money without sacrificing large amounts of your time.
3. Get creative. Learn to think outside the box.  Rather than use your hard earned cash to buy things, see if you can get them for free or through yard sales, auctions, and thrift stores.  Wear things out and repair them yourself.  Bake your own birthday cakes.  Make your own holiday gifts.  Sew and mend your own clothes.  Not only will you get the satisfaction of doing-it-yourself, you will also save yourself a mint.
4. Connect with others. Join an online community and share your wealth of knowledge about couponing, contesting, and parenting.  Having a group of like-minded individuals support you throughout your quest for frugality will make it that much easier. You may also want to update or even create a profile on LinkedIn where you can network with others in your industry.
5. Keep your options open. Do not remain committed to one location or employer.  If opportunities arise, seize them.  If securing a better future requires you to relocate or change jobs, so be it.  Bite the bullet and take the plunge.  You’ll be thanking yourself in the long run for being so brave.

The key to survival in tough economic times is a positive attitude and the willingness to go the extra mile no matter how difficult or frightening it may be.  Being resilient takes persistence.  Every challenge produces a number of solutions.

Start the New Year out right.  Take an active stance in securing you and your family’s financial future.  You’ll thank yourself later on.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Five Foolproof Financial Strategies That Will Ensure You a Better 2010

There’s nothing like waiting until the last minute to do your holiday shopping.  Holding out for the sale of the century often results in you having to rush around like a mad man (or woman!) to find the most sought after gift items of the season.  Adding overnight shipping charges or driving to thirteen different retailers isn’t the best way to be economical.  Here are a few last minute holiday gift ideas for the financially challenged:

• Give the Gift of Your Time. Offer to babysit for free one afternoon for your best friend who works outside the home.  Promise to do all the cooking one evening for your time pressed neighbor down the street.  A handyman?  Help paint your brother-in-laws house and or cut down unwanted tree limbs.  Believe it or not, the gift of time is a priceless commodity.

• Give the Gift of You. Spend time over the holidays with your loved ones in whatever way that you see fit.  Traveling long distances by car or plane may not be in your budget but you can call your loved ones, send them an e-card, or host a video call using Skype.  Take a lot of pictures and post them to a social networking site like Facebook or MySpace for everyone to see. Twitter in real time as you and your children open gifts so that every member of your family will feel like they are a part of your big celebration.

• Give the Gift of Gratitude. Create a list of special moments for that you have shared with the most important people in your life.  Handwrite it out, post it online, or record it to post on YouTube.  Rather than call and thank a person for a gift, create a handmade card using scrapbook paper, ribbon, glitter, and stickers and write a personal message inside.  With email being one of the most popular choices in communicating with people from all over the world, Thank You cards have fallen by the wayside.  A quick way to brighten someone’s day, the gift of gratitude never disappoints.

• Give the Gift of Charity. Spend Christmas serving hot meals to the needy.  Make a donation in the name of a loved one instead of buying a generic gift.  Drop off an unwrapped toy or game to various organizations like the Salvation Army or Toys for Tots.  Purchase gifts for local artisans and crafters who donate part of the proceeds to impoverished people.

Rather than spend your precious time and dollars searching for the latest fad in electronics, opt instead to preserve your sanity and your bank balance by giving from the heart this holiday season.  A gift doesn’t have to cost a fortune to be worth its weight in gold.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Last Minute Holiday Gift Ideas For the Financially Challenged

Does the present state of the economy have you hoping for a better future?  Have you considered how detrimental it would be to your lifestyle if you were to lose your job today?  Is there anything left in your budget to cut back on or are you stretched so thin that you are not sure how you will buy groceries in the upcoming weeks?  Are you hoping for better luck financially next year?

You don’t need a windfall or rich uncle to live a good life.  In fact, I am a firm believer that in every situation, good and bad, lays a learning experience.  Through my fair of struggles and less-than-satisfactory events, I can honestly say that I have a great amount of knowledge when it comes to financial matters.  I may not be the best person to give you investment advice but I can tell you which supermarkets double coupons and what websites offer legitimate money making opportunities.

With that being said, happiness is a state of mind.  You can enjoy all the luxuries in life without spending a fortune on them.  The following list gives you examples of ways that you can benefit from a rich life without spending horrendous amounts of money to do so.  With the rising costs of living forcing everyone to tighten their budgets in one way or another, it is a relief to know that the best things in life are free, or at least deeply discounted. Here’s a few ways that you can live high on the hog without being buried under mountains of debt:

• House Swap, Couch Surf, and Care Take. Are you dying to take a vacation but can’t afford to pay for accommodations?  Why not give house swapping, couch surfing, or caretaking a try?  In addition to saving an armload of money, you have the opportunity to stay in one location longer than a couple of days.  Websites like HomeExchange.com,  CouchSurfing.org, and Caretaker.org tell you how to successfully reduce the costs of lodging.  Travel to virtually any destination in the world on a shoestring budget and reap the rewards of some much needed rest and relaxation.

• Take FREE Online Classes Through Open Courseware and Increase Your Knowledge. You don’t have to be enrolled in a college or university full-time to want to know more about the world around you.  Open Courseware software affords ordinary people the luxury of attending some the finest classes in the world in the comfort of their own living room.  Classes range from Aeronautics to Women’s Studies and require no upfront fees.  Students receive all class materials online and can optionally purchase the textbooks listed on the syllabus.  No credit is given but men and women around the globe can take satisfaction in knowing they completed courses at MIT, Harvard, and Notre Dame. And if you’re looking for courses to help you learn more about money, here are 20 free online financial courses.

• Try It Before You Buy It. This philosophy applies to virtually anything you can get your hands on.  Test drive several vehicles before making a commitment to one dealership.  Request product samples before buying make-up, office supplies, and grocery items.  Fill out forms online and mail-in money back guarantees on items that don’t fit the bill.  Offer to join a Street Team or write a review for a company in exchange for their products.  Check out DailyFreebies.com for a helpful index of offers and member tips.

• Host a Clothing Swap and Get Yourself Some New Duds. Grab a group of your friends, family members, and neighbors and host a clothing swap one afternoon.  Each person brings a pre-determined number of items to trade with others.  Items can include but are not limited to: shirts, jackets, slacks, sweaters, jeans, t-shirts, dresses, hair accessories, purses, scarves, and jewelry.  The same type of party can be held for just about any item you can think of.  Got last year’s bestsellers lying around?  Want something new to read or watch?  Throw a Book and Movie Swap.  Prefer to give away the toys that your children have outgrown to someone that you know and trust?  Dust off the Power Wheels and Chutes and Ladders game and bring them along with your next neighborhood swap meet.

A little bit of creativity works wonders in combating the doldrums of budget living.  No matter what your current financial situation may be, having a few tricks up your sleeve will help you enjoy a long, fulfilling life without incurring large amounts of debt.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

How to Live a Rich Life Without Spending a Fortune in Today’s Economy

This is a guest post by Mr Credit Card from Ask Mr. Credit Card. Today, Mr Credit Card is going to write about ways to keep your finances organized. If you are looking for a credit card, then be sure to check out his best credit cards list section.

Telling folks to be organized in their finances is easy to say, much harder to do. I’m going to share some ideas that I myself have implemented and hope you find them helpful for yourselves and your situation.

Set Monthly Bills on Autopay – I find it such a hassle to constantly go through my utility bills, cell phone bills, internet connection bills, credit card bills, mortgage etc. For me, I find that putting all my bills on automatic bill pay works for me. There are a couple of ways to do it. You can set it up from your online bank account, or with the entity which you are paying the bill. What I also do is to put some of my utility bill on my credit card to earn extra reward points!

Some folks prefer to manually check the bills and write the checks themselves. For me, I find that this will not work because I just cannot be bothered with things like that. I also do check my bills even though they are on autopay to make sure there are no errors. The only thing you have to be aware of is to have enough cushion in your checking account. You do not want to be short of money and go into overdraft!

Have a separate box for warranties – Ever bought a new blender and forgetting where you put the warranty after you send them in (normally within 30 days though most folks actually forget about it!)? I used to lose warranties and instruction manuals because I had no set place to put them. Well, I now put all product instruction manuals and warranties in one place (more like a big box). That way, even though I am unlikely to ever need to refer to it, I always know where it is.

Have a separate file or box for your insurance policies and wills – We all buy insurance policies and once the payment starts, we forget why we buy them! Some folks don’t even remember buying them! I find that it is a good practice to keep these documents in a separate area. I frequently forget about the nitty gritty details of my health insurance and when I want to check them, I know where to get the documents.

Have lots of files – I file all my statements in bright colored files that I get from statements. For me, I refuse to receive “email or online statements” from my credit cards or utilities. I receive my statements in the mail and file them promptly.

Use Quicken – I use Quicken to track my accounts (both personal and business). My CPA told me to set up my business accounts in Quicken so that she has less work to do come tax time (and would presumably charge me less!). Since I moved over to Quicken, I found life so much easier. I could track my expenses and see patterns in my spending (obviously, you could use use services like mint.com. But for me Quicken does the job.

One trick that I’ve been taught was to set up my expense categories in my business accounts according to the expenses listed under the Schedule C (Form 1040 – where you file your business P&L). This makes it easy for your CPA if you just give him or her your Quicken file.

Use Separate Business Credit Card for your business – I used to use one personal credit card just for my business expense. But I found that I occasionally used it for personal use as well (most of the time by accident! or to make use of reward points!). But it gets messy because it gets in the way of keeping your business and personal finance separate. I finally bit the bullet and got myself a small business credit card. The card I got was the American Express Plum Card, which earns me cash back if I pay in full within a 10 day cycle. I also get no preset spending limits, which allows me to charge a higher than normal expense if the need arises.

Keep track of all your autopay accounts you charge to your credit card – Once I got my new business credit card, I had to call the vendors (or change them online) to change my credit card account. My web host for example has my old credit card information. Google has my old credit card information. My Verizon FIOS had my old credit card number. I had to either call them to tell them to charge to my new credit card or do it online.

Track your portfolio performance – Whether you have a single or multiple accounts with various online brokers, you should always consolidate your accounts into a platform for performance tracking. Quicken for example, does a good job of that. If you only use one brokerage firm, then the task is relatively more simple as most will have some form of annual performance tracking tool. But part of keeping your finances organized is to be able to say precisely what was your return last year net of fees.

Get a safe – I would recommend getting a safe to keep important documents like birth certificates, marriage certificates, your college degree. You could obviously keep your jewelery in it as well.

Have a list of important phone numbers – Make a list of your banks’ numbers, your brokerage number, your attorney’s number, your health insurance agents number, your doctor’s number. You never know when an emergency might come up and you want to have those numbers on hand.

I’ll stop here – These are some of the things that I have done to try to keep my finances organized. I hope you will find some of these tips helpful. The one thing that I have not really figured out is how to organize my pile of receipts! I hate filing them and I am very tempted to get something like Neat Receipts where I can just scan in my receipts and it can be transferred to my Quicken account and the images can be used for IRS audits. But I’m not sure if scanning receipts is an improvement at all. If anyone has any ideas for these, I’m all ears.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

A Few Things I Do to Organize My Finances

The holidays are a time for delicious food shared with company. Most of us will be hosting holiday parties, entertaining family, or making traditional holiday goodies to pass around with friends and family. Whatever your tradition, chances are you’ll be spending a little more time in the kitchen in the coming month or two than you would be otherwise.

Unfortunately, this extra time in the kitchen means higher energy bills. Both electric and gas stoves and ovens use quite a bit of energy so if you’re not making the most of the energy they use you could be throwing money away. Here are a few ways you can maximize your holiday cooking so that you’re saving as much money as possible.

Oven Tips

• When cooking a turkey you typically stuff it in the early morning and then put it in the oven to roast for a number of hours. Since you’re utilizing a long, slow cooking method, there’s no need to preheat your oven. That extra 15 minutes it takes for your oven to preheat without any food in it is just wasting energy. Put all of your large and slow-roasting meats directly in the oven and preheat while the meat is inside. Since you do usually need an already hot oven when cooking breads and pastries just plan ahead so that you put those items in later in the cooking process after the oven is already warmed up.
• Resist opening the oven door. We all want to peek on progress of the food, but resist the urge to open the door. Each time you open the door you can easily lose 25 degrees of heat. This just means longer cooking time and wasted energy.
• Cook several items at the same time to cut down on cooking time. Your oven is probably pretty big and it can fit a number of dishes at the same time, so make use of the space. A lot of people worry that you can’t cook foods that call for a different cooking temperature at the same time, but as long as the temps called for are somewhat close it won’t pose a problem. You can cook something that calls for a 375 degree oven in a 350 degree oven just fine. All you need to do is compensate with a little added time and plan ahead. This makes a lot more sense than cooking one thing at 350 and then waiting until that’s done before increasing the temp to 375 to cook the second item.
• In most ovens, but especially electric, you can actually turn off the oven during the last few minutes of cooking and still retain almost all of the heat to finish cooking your food. Of course, this works best if you resist the urge to open up the oven door.

Stovetop Tips

• Match the size of your pan to the cooking element on the stove. The closer the size of the bottom of the pot or pan is to the electric element or gas flame size, the more energy is transferred directly to the pot and isn’t being lost to the outside air. The California Energy Commission says that a 6″ pan on an 8″ burner will waste more than 40% of the energy! That’s a lot of waste, so pay attention to what you’re cooking with and where.
• Keep your burners and reflectors clean. A clean area surrounding the burners will provide better and more efficient heating. When it comes to electric stoves, those metal reflectors under the burners can get dirty real fast. They are cheap and can be easily replaced by visiting any major department store. High-quality and clean reflectors can save up to a third on the energy used.
• Utilize residual heat with electric burners. If you have an electric stove you already know that when you turn the burner off the element stays very hot for quite some time. Use this to your advantage and you can turn off your burners a little early and still capture the residual heat while finishing up your dish.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Cooking Tips to Help You Keep Your Energy Bills Down This Holiday Season

Black Friday (the day after Thanksgiving in the United States) provides consumers with bargains beyond their wildest imaginations.  Retailers offer their goods and services at decreased prices as a way of persuading men and women to start their holiday shopping earlier. Seasoned pros know just how difficult it is to find parking on this day so they line up hours in advance to secure a place in line before a store or mall opens.  A few brave souls camp outdoors in hopes of getting an electronic gadget or household item at a ridiculously low price.

Last year’s stampede at a Wal-Mart in Long Island, New York left one of its workers dead and caused a customer to have a miscarriage in the store as shoppers raced their way through the front door.  Rather than be subjected to maddening crowds, nasty salesclerks, and empty shelves, many individuals opt to do all of their shopping online.  If you happen to be one of the many men and women who actually enjoy visiting storefronts, there are a few simple things that you can do to help you find the things that you want and to get through the day relatively easily.

View Doorbuster Specials Online Before Heading Out

A simple web search can save you exorbitant amounts of time.  Put in “Black Friday Specials” or “Doorbuster Specials” and the name of your favorite retailer and watch hundreds of sites pop up.  Carefully review the store’s policy concerning rainchecks and take notes on their hours of operation.  Many companies have set aside a specific timeframe for selling their most sought after items.  Do not show up at midnight and expect to purchase something that is advertised at 6 A.M.

Bring Along a Family Member or a Friend

If you need two of one item and are not allowed to purchase it yourself due to a store’s limitation, bring your mother, father, sister, brother, or friend along with you and give them the money to buy the item.  Expect to pay cash for the second item and do not make a show out of what you are doing.  Many retailers frown upon these types of transactions and may even turn you away if they know you are trying to get multiple items at a low price.

Carry Drinks and Snacks With You

Food lines are often as long as those stores advertising holiday specials.  Don’t be afraid to pack your bag with a sandwich, some pretzels or other snack items, and a bottle of water.  Staving off hunger will help you get your shopping done faster.

Take Advantage of Rainchecks

If a store offers rainchecks, make sure to take advantage of them.  When the product is back in stock, you receive the same special pricing that you would have received on Black Friday.  Few stores offer this option with their doorbusters but it never hurts to ask a member of management if there is a “while supplies last” restriction on an item.

Be Prepared to Wait

You pay the price for bargains by standing in line.  Be prepared.  Avoid bringing small children with you if you can help it.  Get your coupons in order before getting to the counter.  Be conscientious of the people standing behind you and try to make your transaction go as quickly as possible.

For those die-hard shoppers looking to get the most out of their dollars, Black Friday offers a lot of potentially great products at reduced prices.  Considering what we know about the “busiest shopping day of the year,” you can apply the tips listed above and get the kind of savings that you have come to expect without all the hassles.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

A Few Black Friday Shopping Tips

Retirement is one of the major end goals for many of us. After putting in a few decades of hard work we hope to be able to break free from the daily grind and do what really makes us happy. That could be starting a new career, traveling the world, or simply enjoying a slower paced lifestyle. Whatever your idea of retirement is, there are plenty of roadblocks standing in your way.

In a perfect world you will have enough money set aside so that come retirement day you have absolutely nothing to worry about. You’re free to carry out your plans without the added stress of wondering whether or not you’ll have enough money to pay the bills. Unfortunately, most people don’t have this luxury. Instead, they come to the realization that they can’t afford to retire and end up spending the later years in their life unhappy because they have to either keep working or simply don’t have enough money to do any of the things they had hoped. Here are five reasons most people will retire broke and unhappy.

1. Not Saving Enough

Not saving enough has to top the list because let’s face it, not having enough money in retirement is the biggest problem. How much money do you really need to have saved up by retirement to fund your dreams? Well, according to a recent poll I took on the site most people feel they need between 1 and 3 million dollars saved by retirement. So, ask yourself where you stand. Are you on track? Do you have some catching up to do? Or do you feel there’s just no possible way to save up enough money by retirement? Even if you are behind in savings that doesn’t mean you should give up. You still have many years ahead of you to make a difference, and every little bit counts. One thing is for certain, and it’s that not having enough money saved for retirement will have a negative impact on your lifestyle down the road.

If you don’t have enough saved up for retirement a few things are certain:

• You may have to work longer.
• You may not be able to do the things in retirement you planned on.
• You may become a burden on your children.
• If you encounter serious health problems it could mean liquidating your assets and going on Medicaid.

If none of those things sound like fun you better start saving. Even if you’re in your 30s and haven’t put a penny aside for retirement it isn’t too late. Take advantage of your employer’s retirement plan such as a 401(k) or 403(b) if they offer one. This is the easiest way to get into the habit of saving since it comes right out of your paycheck and it’s pre-tax money. Even better, if they offer a match you need to at least save enough to get the match. That’s free money! This is the only time someone else will put money into your retirement account for you, so don’t miss out.

Beyond that you should set up your own retirement account such as a Traditional IRA or Roth IRA. It doesn’t matter if you can only afford to put a hundred dollars a month into your account, but you have to start somewhere. Even just $100/month over 30 years earning around 7% will put over $120,000 in your account. Sure, you won’t be able to live off just that, but you can’t tell me that having an extra $120,000 for retirement is a bad thing. So, start small, and start right now. Every little bit helps even if you are getting a late start when it comes to saving.

2. Making Poor Investment Choices

Did you know that you can be on track to save enough yet still find yourself in the poor house come retirement? Just ask all of the baby boomers who planned on retiring in the next few years and were invested too heavily in stocks. Their retirement plans were destroyed in a matter of months. Granted, we don’t have crystal balls and can’t predict what the markets will do, but you can follow some basic investing principals so that you’re not putting yourself at unnecessary risk.

Poor investment choices go both ways. You have those who might be far too aggressive and can’t whether a steep decline shortly before retirement, and you have those who invest far too conservatively from the start and come up short in the end. You need to strike a balance and adjust your investment strategy over time as you age and your needs change. There’s no magic portfolio that works for everyone, in all market conditions, all the time. But it’s up to you to understand what you’re investing in, what the risks are, and how those investments play a role in your long-term objectives.

Finally, don’t neglect fees. You can’t invest without fees, that’s just a fact of life. But in most cases you can limit how much you pay. It may not seem like much, but even choosing investments with 50 more basis points in annual fees could literally cost you over $100,000 by retirement. The sooner you make smart investment choices and understand the impact of fees, the longer your money has to grow so that it can adequately fund your retirement.

3. Neglecting Health Care

Want to retire broke and unhappy? Just ignore the impact that health care will have on your retirement. As a member of Generation X you may have seen this first hand with aging family members. Even when it looks like someone has set enough aside for a comfortable retirement it just takes one major health incident to derail everything. This country obviously has some flaws with its health care system, but that doesn’t mean you have to just take it.

Health care issues can ruin your retirement before it even starts. Did you know that disability is the number one reason for bankruptcy and foreclosure in this country? If you’re still working and rely on your income to pay the bills what happens if you get hurt or become disabled, either for a few years or permanently? In many cases people don’t have disability insurance and even if they qualify for Social Security Disability it isn’t enough to pay all the bills. Just a two year disability in your 30s could be enough to severely impact your retirement, especially if it causes a financial hardship such as bankruptcy or foreclosure. So, make sure you’re adequately protected even while working so that you don’t jeopardize your retirement.

An even bigger problem often comes in retirement. Our health is unpredictable for the most part. We don’t know what kind of health issues we will develop as we age, and depending on what it is and treatment required it could end up quickly draining your retirement fund. Don’t just assume that having Medicare and a Medicare supplement will do enough to cover most of your medical expenses. If you are in a situation where you need long-term care you’ll find that this isn’t covered by Medicare. And don’t be fooled by the name, but most long-term care stays are only a few years. But did you know that the average cost of a year of long-term care is upwards of $50,000 or more? Just needing a few years of care could quickly begin to wipe out your retirement nest egg. If you run out of money paying for this care you’ll either become a burden on your family while they try to pay for or provide the care. If they can’t keep up you’ll be faced with liquidating any assets you do have, and then will likely end up on Medicare. I don’t think anyone looks forward to that kind of retirement.

Finally, a little preventative health care goes a long way in helping you live a long and healthy retirement. Take some time while you’re young to make smart health choices today so that you’ll have a better chance of remaining healthy in retirement. Some good habits today could end up saving you hundreds of thousands in health care down the road.

4. Retiring Too Early

Raise your hand if you’d like to retire earlier rather than later. Stupid question, right? For most of us we’d love to retire a few years early and get a jump on doing the things we planned on in retirement while we’re still young and healthy. Unfortunately, early retirement is simply in the cards for most people. It really comes down to underestimating what just a few years of early retirement can cost financially. For example, say you and your spouse would like to retire at 62 instead of 65. Assuming you each earn $50,000 after taxes at your current job those three years of retiring early will cost you $300,000 in lost income. Even if you elected to begin drawing Social Security at 62 that isn’t going to come even close to replacing that income. If you have a pension, chances are taking it at 62 is also going to be a reduction in payout. So, depending on what your income needs are during those three years you could be draining your retirement account by a few hundred thousand. When you factor in the 20 or more years you still have in retirement that early retirement could significantly reduce how long your nest egg will last.

And it isn’t just about tapping into your retirement assets early. Let’s not forget about health insurance. You don’t qualify for Medicare until 65, so if you retire early where are your health benefits coming from? If you’re lucky enough to have a working spouse you might be able to get by using their plan, but what if you both want to retire early and you don’t have any retiree health benefits offered by your employer? Get ready to open your wallet and pay for an individual plan. This is a common oversight by many early retirees as they get dead set on retiring early and then underestimate the significant costs of health care until reaching age 65. This can be a costly mistake.

Retiring early is doable, but you have to plan well in advance for it. That means saving even more money and thinking about the impact of early retirement, both in terms of your nest egg and health care. If you rush into it like many people you could be giving up a significant chunk of your later retirement just to quit working a couple years early. Weigh your options carefully.

5. Lifestyle Creep

It’s just human nature that as you earn more money and become more successful you generally spend a little more money on the finer things in life. After all, isn’t that what it’s all about? You want to make more money so you can enjoy some of the fruits of your labor. It’s great to be able to buy things that improve your quality of life, but this lifestyle creep can go too far. It starts out with small stuff, but eventually it turns into a bigger house, nicer cars, and maybe even more elegant vacations. If your income goes up but your expenses also continue to go up the net result is often zero. You make more, spend more, but still don’t have enough left over to save more.

As you go through your career and begin making more money it’s important to keep your spending in check. You still might opt for a nicer car or a bigger house, but don’t let those things interfere with your ability to save. When you start making more money make sure you treat your retirement savings like any other expense. If you’re willing to spend 20% more on a new car payment you should be willing to put 20% more into your retirement account as well.

If you don’t increase your saving along with your other expenses you’re going to be in for a rude awakening upon retirement. What you’ve done is built up this more affluent lifestyle and when retirement comes you’re probably hoping to at least maintain a similar lifestyle but without going to work. If you haven’t been increasing your saving over the years to match the increase in lifestyle, guess what. You’re not going to have enough money to fund that retirement. Then you’ll probably find yourself unhappy in retirement since you had to reduce your lifestyle or try to continue that lifestyle and end up broke ten years into retirement. Neither of which is a situation you want to be in.

Will You Retire Broke and Unhappy?

Hopefully not, but as you can see, it’s pretty easy to do. While it’s easy to retire broke, it’s just as easy to start putting measure in place today to ensure it doesn’t happen to you. Start by saving more. Think you’re already saving enough? Think again. Even if you’re just getting started for the first time, every little bit helps. Now that you’re saving you need to make sure you’re investing it properly. Take some time to learn about your investments, understand what they are going to accomplish, and keep expenses low. Next, don’t underestimate health care costs both now and in retirement. Take steps today to make sure poor health won’t drain your retirement fund. If you want to retire early, make sure you plan for it. Early retirement requires additional savings and considerations when it comes to health care. And finally, don’t let lifestyle creep during your working years ruin your retirement. Keep spending in check and adjust your saving accordingly so there are no surprises in retirement.

If you can keep up with all of that you should be able to enjoy a wealthy, happy, and comfortable retirement.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

5 Reasons Why You Will Retire Broke and Unhappy