Buying a Car? Make Sure You Follow These Tips

The days of being a clueless consumer walking into a dealership and letting the car salesmen explain all of the features of the new models are over. Today, you have the internet on your side. You can learn anything you’d ever want to about any car on the market before stepping foot into a dealership. You can research crash ratings, fuel efficiency, insurance rates, and even build a car with all of your desired options right from the web. With this knowledge comes power and you’re less likely to be scammed by a car salesman. But all of this information is useless if you don’t use it.

If you just walk into the dealership, pick out a car, and do the financing on the spot, you could be walking away having paid hundreds, even thousands, of dollars more, directly or indirectly, than you should have. That’s the old way to buy a car, and even though some people still do this, if you’re reading this you’re already one step ahead.

Here are the top six things you should know to be ready to buy a car at the best total price. Remember, it isn’t just the dollar amount on the sticker that matters since there are dozens of ways to save on car expenses over the life of ownership.

1. Are You Upside Down On Your Current Car Loan?

Welcome to the world of the 60-month (or longer) loan. Newsflash: vehicles are rapidly depreciating assets and the longer you finance them, the longer you’ll be upside down and pay excessive interest. While being upside down on a $15,000 vehicle is not as bad as being upside down on a $150,000 house, it’s still a stupid financial mistake. What makes it so stupid is that cars have a known depreciation rate so you can easily calculate whether or not you’ll be upside down on your loan, how long it will take to pay it off, and what you’ll pay in interest over the life of the loan. You can’t do this with real estate, at least not in this market. Because real estate values can go up and down at different rates over time it’s understandable that some people can be caught upside down. There’s no excuse when it comes to your car loan.

There was a time when car loans were a standard 36 months. Gradually the term became longer to enable more people to qualify for loans they couldn’t really afford, by lowering the monthly payment. The longer the term, the more you’ll pay in interest, so a lower payment is really not your friend. Does this sound familiar? It should, because the mortgage industry did the same thing. The 30-year fixed rate mortgage with 20% down used to be the standard. Over time they introduced zero-down loans, adjustable rates, balloons, ARMs, and even interest-only loans to allow more people to buy something they really couldn’t afford. It’s no different when it comes to buying a vehicle these days.

If you try to sell your car before the loan term is over, you may find that the car is worth less than you owe on it. To buy a new car, you’d have to pay off the balance on the original loan or roll it into the new loan, which creates an even more expensive car. Buying a car that depreciates quickly is another thing that can cause you to be upside down on your loan. If you buy a model that depreciates roughly 20% each year you’re going to lose money on it faster than a car that depreciates maybe just 7-10% a year. Don’t get into a cycle of constantly financing an upside down vehicle and letting your car make you poor.

2. Have You Researched the Trade-In Value of Your Current Car?

Keep the trade-in of your old car and the purchase of your new car as separate transactions. Get the trade-in offer before discussing the price of the new car, or finalize the price of the new car before discussing the trade-in. Some dealerships will offer you a good trade-in but will just raise the price of the car you’re buying, or if they already give you a good deal on a new car they might come in with a low-ball number on your trade. You need to know the trade-in value of your current car so that you have a rough idea of what to expect the dealer to offer for it. If the number is much lower than expected you know you may be getting taken for a ride.

One of the easiest ways to research the trade-in value of your car is to look it up at Kelley Blue Book. Here you can enter your location, vehicle make and model, mileage, condition, and features. It will then give you various prices for private party value and trade-in value. The trade-in value is obviously going to be less than what you’d get selling it privately because the dealership has to make money on it when they resell, so keep that in mind. If the difference is significant, you may want to consider trying to sell it privately first.

3. Have You Researched Interest Rates on Car Loans?

Don’t evaluate the deal based on the monthly payment. This is one of the biggest mistakes most car buyers make. Do you think it’s just coincidence that most car commercials advertise new cars by just stating how low your monthly payment can be? The interest rate is where most of the cost lies if you don’t put a significant chunk down. Know how much you’ll pay over the life of the loan by using a vehicle loan calculator to model some different loan amounts and rates.

One thing you can do before even shopping for a car is to check with your local bank or credit union about auto loans. See what they currently offer and whether or not you qualify. If you go into the dealer already pre-approved for a loan with your bank you know exactly what your interest rate is and how much you’ll be paying. If you wait for the dealer to try and find financing for you you’ll almost always get approved for something, but by the time you get to the financing stage you’re so emotionally sold on buying the new car that you don’t even care about the interest rate and just want to finalize the deal. This could literally cost you thousands of dollars.

4. Have You Considered the Benefits of Buying a Used Car?

There’s nothing like the feeling of buying a new car, but consider the cost. Cars depreciate sharply in the first two years — some models as much as 25-30%. The car you paid $25,000 just two short years ago may be worth only $17,000 now. If you’re someone who keeps cars for 7-10 years or doesn’t bother buying a new car until long after the first one has been paid off this isn’t as much of a concern. You’ll get your money’s worth. But if you don’t think you’ll keep the car 10 years you need to consider the potential savings by buying used. You can buy a car that’s literally only a year old and with only 15,000 miles on it and save 15-20% over new in many cases. The car may have had a previous owner, but it’s still nearly new and carries all of the original warranty. If you think about it, the money you save by buying a slightly used car will probably cover the insurance premiums on that car for as long as you own it.

5. Do You Know the True Cost of Ownership of the Car?

Don’t find out too late that you can afford to buy the car, but you can’t afford to own it, due to operating expenses, insurance, gas mileage, annual excise taxes, and other costs of ownership. You’re not ready to buy a new car until you’ve researched and considered this information. Just like when you buy a house, there’s much more to it than the monthly mortgage payment. This is how so many people get into financial trouble because they are told they can afford the monthly payments, but really can’t afford everything else associated with it.

New car buyers often don’t consider the higher costs of repairs and maintenance for certain models, tires that cost twice as much as those on other cars, higher gas costs, and higher insurance (depending on make, model, and even color). This is especially true once you begin looking at SUVs and luxury models. Insurance rates can be nearly double that of a smaller or less expensive vehicle.

One of the most important considerations is the repair record of the make and model. Does it have a history of problems with the transmissions? Brakes? Electrical systems? What does it cost for routine repairs and maintenance? You can find all this information at Edmunds.com. It doesn’t do any good to find a great deal on a car only to find out you’ll be spending $1,000 a year fixing common problems with that particular model once the warranty is up. This is a great site that can really help you save money and avoid being taken advantage of.

6. Have You Evaluated Any Dealer or Manufacturer Offers Like Rebates or Financing Specials?

A $2,000 rebate on your new car may sound good, but are you sure it beats the low-interest-rate deal the dealer may offer as an alternative? Don’t be fooled by the lure of cash upfront as it isn’t always the best choice over the long run. Evaluate the incentives and offers before you start seriously shopping. Check all of the manufacturer websites, ask your local dealers about incentives, and be armed with your options ahead of time. This will help you make sure you get any incentives you’re entitled to while also objectively comparing the true savings between offers.

The Bottom Line

Do your homework. Don’t roll the balance of an upside down loan into a new loan just because you’re tired of your old car and you’re just ready for something new. Don’t just walk into a dealer without having done your research and expect to be given the best possible deal. Don’t buy a new Lexus just because you can finally afford it if you get a 6-year loan. Vehicles are wealth destroyers, not wealth creators. While it may feel good to impress your friends or commute in style, foolishly wasting money on a vehicle is a sure way to retire broke.

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.

6 Things You Need to Know Before Buying Your Next Car

New Credit Card Statements Help You Get Out of Debt

The new laws from the CARD Act have created a number of changes for credit card holders. Teenagers now find it very hard to get a credit card, card companies can’t stick your past balances with a higher interest rate, and new credit card statements make it easier for consumers to see the consequences of their actions. The new statements are something I want to quickly touch on today as most of you should begin seeing something similar hitting your mailboxes this month if you haven’t seen them already.

In the past, credit card statements were not very user friendly. They contained a detailed list of card activity, your balance, minimum payment amount, and the due date. That’s about it. It was then up to you to decide how much to pay, and since most of the time people would see the minimum payment as the amount due, that’s what they paid. Paying the minimum credit card payment is a big mistake. The minimum can literally cost you thousands and take over a decade to get the balance paid off.

Thankfully, the new credit card laws make some important changes to credit card statements that will go a long way in helping people get out of debt. To give you an idea of what you’ll see on the new statements I took a picture of one of our recent card statements:

This is a big box prominently displayed right on the front page of the statement. There’s no way to miss it, and that’s good. There are a few things that make this new box so important. First, it recaps the balance, minimum payment, and the due date right at the top. These are the three most important pieces of information regarding your credit card bill, so it makes sense to highlight them again. But even better is the paragraph just below that, the late payment warning. Here, in very clear terms it tells you exactly what will happen if your payment is late. It tells you how many days you have as a grace period, what the late fee will be, and what will happen to your interest rate. Try getting this information on your old statements! It was impossible because it wasn’t there and you instead had to sift through the fine print of your credit card agreement to find it.

Even better, look at the minimum payment warning. Now instead of making the minimum payment seem like that’s all you should be paying they actually attach a warning to it to hopefully show people how bad of an idea that is. In my case, our balance is $1,600 and if I were to just make the minimum payment each month it would take 13 years to pay it off. That’s right, 13 years! Think about that. If you go out and buy a $1,600 TV and then only make the minimum payment on the card you used the TV will probably have died or gone obsolete years before you’ve ever paid for it.

I like how it also shows you how if you pay a little extra each month you can shave literally a decade off of your repayment and save nearly $1,000 in interest. For this card, the minimum payment right now is $40, so it shows that just by paying $12 more and continuing that payment can yield huge savings. I know at the top it says the minimum payment due is $79, but that’s because I was deliberately late so that I could test some of the new features from the credit card law. I wanted to see if it triggered any additional warnings on the statement and make sure they did not immediately jack up the interest rate, assess fees, etc. So far it looks like everything is working as promised.

Finally, there’s help for those who need it. At the bottom they offer a toll-free number for credit counseling services. In the past, people basically had to see this information out on their own and might not know where to turn. Now, they have a number they can call right on their statement. If they see the numbers and realize they are in over their head, help is just a phone call away.

The New Statements Are a Great Change

If anything good came out of the new credit card laws, it had to be the new statements. No longer are important details hidden within fine print and people don’t have to go and find a credit card payment calculator online just to see how long it will take them to pay off their balance. This information will be right in your face each month, and if seeing that it might take you over a decade and cost thousands to pay off just a small balance doesn’t kick your butt into gear, I don’t think anything will. It will be a while before we begin to see the effects of this statement change, but I’m certain that in the coming years we’re going to see decreasing credit card balances across the board and a group of informed consumers that finally understand how costly credit cards can be.

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.

The New Credit Card Statements Are Here

Today’s frugal fashionistas know a thing or two about creating an enviable wardrobe at a fraction of the cost of buying retail and they do this in a number of ways.  Some shop deep discount outlet malls to pick up their brand name attire while others dig diligently through the racks of the secondhand store in hopes of acquiring the precise type of apparel that they are looking for.  Other, more creative types, sit down with a sewing machine and a pattern and whip out designs all their own.  College students looking to recycle last season’s fashions, clear out their closet and host clothing swaps where each participant walks away from an evening full of fun with an armload of new attire and accessories to wear.  Families with small children shop yard sales and online auction sites to buy lots of gently used clothing for their little ones to wear. Rather than replace items on a whim, these parents wait to buy new clothes until their children wear them out or outgrow them.

Like past generations, a majority of today’s population works hard to reduce, reuse, and recycle the items that they purchase or acquire for free.  You can learn a thing or two from these individuals by learning how to look like a million bucks for less.  Here are a few secrets that they would like to share with you.

Don’t Overlook the Potential of the Thrift Store

On a regular basis, people find amazing brand name, quality items that are still in the box or have the tags hanging from them while shopping at a thrift store or secondhand shop.  I once purchased a brand new pair of Doc Marten boots for less than a dollar at the Salvation Army. And don’t forget the other side of the coin as well. If you have clothes you no longer wear you can basically put money in your pocket by donating it or even selling it at a second-hand store like Plato’s Closet.

Get Your Hair Cut, Colored, and Styled By a Student

Visiting a school that specializes in Cosmetology has its benefits.  In addition to helping a student acquire the hours that they need to graduate, you can have your hair cut, colored, and styled for next to nothing. Don’t be afraid of a bad haircut. Chances are you’re going to get a great cut or style and pay a fraction of the cost of going to a regular salon.

Join the Do-It-Yourself Bandwagon and Learn How to Alter and Reconstruct Clothing to Make It Look New Again

Ill-fitting or otherwise unattractive clothing can be cut, sewn, embellished, and repurposed into amazing shirts, pants, skirts, belts, handbags, and headbands.  Craft store sell yards of fabric, spools of ribbon, patches, leather fringe, beads, and buttons specifically designed to update the look of old duds.

Buy the Best Items That You Can Afford and Take Advantage of Life-Time Guarantees

Many companies guarantee the items that they sell you.  Take advantage of these policies and buy the best garments that you can afford.  A high quality item purchased from LL Bean carries a lifetime guarantee.  Although the initial cost of a new coat may seem overwhelming, it pales in comparison when you consider the cost of multiple new coats over the course of a few decades.

Familiarize Yourself with Freecycle

Free is the way to be.  Get to know your local Freecycle group.  Post items that you no longer want and request items that you know you will use.  Not only will you reduce costs, you will also help the environment by keeping perfectly good items out of the landfill.

As you can see, you don’t need to blow your budget buying all of the latest designer fashions, getting expensive hair cuts, or buying junk you’ll only use once or twice. Frugal is the new black, and if you’re smart with your money you can look like a million bucks without spending more than a few dollars.

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 Look Like a Million Bucks For Less

Working Remotely is the Holy Grail for Many Workers

Travel is liberating.  It allows us to experience places and cultural happenings beyond our wildest imaginations.  It puts things in perspective and gives us countless stories to recant to friends and family members who want to know what it feels like to dip their toes in the ocean, live out of a backpack or suitcase, and visit outdoor marketplaces where fruit and vegetables are sold by the bushel and where independent artisans weave rugs, handcraft jewelry, and paint portraits under the watchful eyes of tourists.

Travel lightens our spirits while toughening up our skins.  It teaches us to be patient and resilient and encourages us to live in the moment, a place often void of modern conveniences like BlueTooths and Cheez Whiz.  Travel takes us to new spiritual levels, provides us with fresh sources of inspiration, and forces us to think outside the box and to improvise.

For those that are inexperienced, long-term travel can cause anxiety.  There are a few reasons why people feel apprehensive.  Work and family obligations can limit a person.  Lack of financial resources can also damper an adventurous spirit.

Rather than forgo the trip of a lifetime, why not consider applying the skills and experience that you learned in the workplace to your new life on the road?  You would be surprised at how easy it is to be an excellent employee from any location in the world.

Nora Dunn, a freelance writer and “professional hobo”, enjoys stable income while she treks across the globe.  In addition to creating content for a number of websites and magazines, she has traded skills in order to secure accommodations.  One of her most memorable experiences involved milking goats.  She has also painted murals, led eco-treks, and landscaped yards in exchange for a place to sleep.

She offers this advice to fellow travelers:

Even if you don’t work in trade for accommodation, travel in general is an exercise in flexibility and having an open mind. It may not be a matter of life and death, but it will certainly affect your ability to “survive” the trip and come out the other side feeling fulfilled.

Negotiating a remote work location with your employer is far easier said than done.  It often requires a positive attitude and persistence.  Here are a few arguments to take to the boss:

• Some people double their efficiency by removing distractions.  You happen to be one of them.  Your track record speaks volume.  Not only are you a valued team player, you also know how to work alone.

• Your people skills are exceptional.  You know how to communicate with people from all backgrounds.  You may even know a language or two that will help you with your travels.

• You are irreplaceable.  You know your position inside and out.  There is no sense spending money on recruiting and training another individual when you can do your job from any corner of the globe.

Once you have agreed upon a plan, exceed expectations.  Communicate frequently with your employer.  Meet all deadlines and turn in quality work.  There is no excuse for failed internet connections or downed phone lines.  Have a backup plan just in case you run into any problems while abroad.

Living your travel dreams is possible with some assistance from your employer.  Keep a steady stream of income available to fund your journey by coming up with a plan that allows you to work remotely.  A week’s vacation in an exotic location pales in comparison to years of traveling and living in the country or countries of your choice.

Jeremy’s comment: As Charissa has explained, working remotely can be very rewarding. As you’re reading this I’m doing some remote working of my own. In addition to this blog I’m also a writer for About.com and work with Bundle as an editor, but guess what? I’ve been driving across the country over the past week while still using technology to work remotely regardless of where I am. It’s great! No longer am I bound to the office and I’m able to get all of my work done while enjoying the sights away from home. I know not every job has this type of flexibility, but it is becoming more and more common. At the very least, it might be something worth discussing with your employer if it’s something that interests you. The worst that can happen is they say no.

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 Negotiate Remote Work With An Employer

This is a guest post by The Financial Blogger: I’m working in the financial industry and I am specialized in personal finance. I’m always trying to find way to make money differently than receiving my pay check every two weeks. I recently hit a 6 figure income at the age of 28 and I am currently building my own online business while working 4 days a week at my day job.

Now that the stock market engine seems to be restarted for good (with a lot of volatility!), speculators are already trying to see which bubble will burst first! I am always surprised to see how quickly financial analysts are to predict that the stock market will crash again… I guess it is easier to predict the end of the world as sooner or later, it will happen and they could all say “I was right!”… only I was 5 years late….

So here are some of the bubbles that could burst at one point or another:

Precious metal, oh my so precious….

It’s been more than a year since we have seen gold push up from one record high to another. As many investors have enjoyed tremendous returns, more and more people are jumping on the bandwagon. I’d say that this is probably the first bubble to burst in the upcoming year. As far as historians remember (because the history of gold is way longer than any economic study), gold has always kept pace with inflation (but with much bigger fluctuations). In fact, an ounce of gold was good enough to buy a nice suit back in 2000 BC… and it is still good enough to buy a Hugo Boss today… after all this, the question remains: Do you really want to buy something that has already reached its peak? This is the case of gold in my opinion.

Canadian housing market to collapse?

As previously mentioned last week, the Canadian Government played with Canadian mortgage rules in order to reduce accessibility to the housing market. With these measures, it hopes to slow down the housing market and avoid a 2^nd American nightmare…

Since the housing bubble didn’t burst in Canada back in 2007 and we are still navigating through a low interest environment for a while, the government felt the urge to modify a few mortgage rules. While they ignore the concept of bubble yet, it is very possible that making a few changes over time will slow down the housing market and calm the flurry of first home buyers. If they could threaten to increase rates significantly, this would definitely put an end to this madness. However, economics is not as simple as raising or dropping an interest rate . This is why they opted for other alternatives.

Emerging markets – can they hold it for long?

Since 2009, emerging markets (more importantly the BRIC) has taken the world on their shoulders and are slowly taking most countries out of the recession with their huge appetite for resources. However, they also have started to run into a few speed bumps such as 8% inflation in China and striking employees looking for better working conditions in India.

These countries could experience their own industrial revolutions as well and god knows what will become of it. There is a lot of hope invested in the BRIC but their stock markets are inefficient and not transparent at all. I guess this is why we have such risk of having the bubble burst from the “truth”.

Among the top 3 bubbles to burst, I’d put my 2 cents on gold… I really don’t like this precious metal. In fact, I don’t even like its color… I prefer silver!

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 Possible Market Bubbles on the Horizon

This is a guest post from MD of Studenomics. A personal finance blog for 20-somethings that want to kill debt, make some cash, and enjoy life. If you like the article, please consider subscribing for free updates.

In the North American society it’s no secret that owning a home has become apart of life. For many years the adage that, “renting is throwing away money,” was rarely challenged. As young people graduated from college and went through their twenties, buying a home simply became apart of life. Well, that is until the recent mortgage and real estate problems. Now the 20-something crowd is starting to challenge the home ownership axiom. Young people are worried about all of the mortgage crisis and all of the recession talk. Now buying a home doesn’t seem like the greatest idea.

Listen, I know I’m just some random blogger dude behind a computer screen. I can’t make the largest (or one of) decisions in life for you. However, I do feel good knowing that I can at least influence your decision or give you something to think about before you sign over the mortgage papers:

How stable is your job?

Buying a piece of real estate won’t completely kill your flexibility, but it will come pretty close to doing so. I don’t like giving financial advice to friends (you know all the legalities and stuff), but when someone asks me about buying a home, I ask the same question: how steady is your current job?

As a 20-something in today’s economy there’s no telling where you could end up tomorrow, a week from now, or a few months from now. Gone are the days of life long jobs and mega corporations never going down. Anything can happen. I don’t want to scare you. I just want you to open your eyes.

Then there’s your side of the stable job equation. How much longer do you see yourself working in the same company? Perhaps you’re sick of the job and are waiting to get out. You could be looking to leave the company and venture out on your own. You could even be looking to do some long term travel in the near future. The options are endless. Just because you have a job today it doesn’t mean that you’ll have one next week.

Key takeaway point: Consider your job stability before you decide on where you’ll establish home base.

How much money do you really have?

How much money do you really have for a mortgage down payment? Okay you have 30 grand. That’s cool, but do you realize how much of that 30 grand will actually go towards your mortgage down payment? Not a whole lot. Once you factor in the cost of a lawyer, real estate agent, moving costs, and relevant property taxes, you’ll realize that your 30 grand didn’t go all that far.

You need to take a realistic lo0k at your financial situation to decide if buying a home is right for you. Many young people don’t like the fact that they have a large lump sum of cash in the bank, so they feel the need to invest in tangible assets. Unfortunately, many home ownership costs are often overlooked and a decision is based without knowing all of the facts.

Key takeaway point: Don’t assume that all of your savings will go towards the mortgage down payment.

What is the price difference between rent and mortgage?

This is usually the deciding factor for anyone that is on the edge of buying a home. If there’s a minor difference between all home ownerships costs (and I mean ALL) and rent, then the option of buying becomes very attractive. Unfortunately, many potential home-owners only look at the cost of rent and the cost of the monthly mortgage payment. All relevant home ownership costs need to be considered: mortgage, property taxes, maintenance fees, moving costs, potential repair costs, and insurance. Once you have considered all of the proper costs, you make a more educated decision on the largest purchase of your life.

Many of my readers from the Bay Area have made it clear that the difference between renting and buying is astronomically in favor of renting. In my opinion, it really depends on the area you want to live in. Nobody knows about your area better than you do.

Key takeaway point: Keep a close eye on the difference between rent and ownership costs when making your decision.

I hope I’ve provided 20-somethings with some food for thought when it comes to making a decision on home ownership. For further reading on real estate in your twenties check out my 2,00o word post comparing renting to owning a home.

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.

Do You Really Need a Mortgage In Your Twenties?

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

Even though birthdays come only once a year, businesses make your “big day” one to remember by offering you complimentary meals, gifts, and free admission.  Here are a few things offered to birthday club and mailing list members:

Cedar Point Amusement Park’s exclusive indoor waterpark resort, Castaway Bay, has a Birthday Club for children 12 years of age and younger.  By registering their children online, parents will receive “a day pass valid during the month of the child’s birthday or a Birthday Fun Pack that can be redeemed when you stay overnight for a free color-your-own t-shirt, free personal pizza and free arcade card.”  The resort is located in Sandusky, Ohio and is within driving distance of Cedar Point, America’s Roller Coast.

Sign up for Baskin Robbins Birthday Club and receive a 2.5 oz scoop of your favorite ice cream on your special day.  You will also be able to access coupons, special offers, and a sneak peek at new flavors and treats.

Firehouse Subs will send you a certificate during your birthday month for a free sub of your choice.  Meatball, Smokehouse Beef and Cheddar Brisket, Tuna, and Italian are a few of the items on the menu.

Denny’s gives you an Original Grand Slam platter with proof of birthdate.  Load up on pancakes, eggs, bacon, and sausage for free.  Don’t forget the maple syrup!

Become a Sephora Beauty Insider and receive a free Beautiful Eyes Kit.  Inside of it, you will find everything you need to make your eyes party-perfect—long-wearing eyeliner, pretty shimmery shadow, and volumizing mascara.

Lonestar Steakhouse will send you a coupon for a free entrée (a $15 value) when you join their e-club.  Grab a friend or two and make this year’s birthday memorable.

Discovery Cruise Line offers birthday boys and girls a free one-day cruise to the Bahamas with each paid adult.  In addition to a generous breakfast and dinner buffet, guests enjoy all types of amenities including free drinks, a game room, and movies.

Moe’s Southwest Grill will serve up a certificate for a hot, fresh burrito of your liking straight to your email box.  Add a couple of dollops of guacamole and red hot salsa for a real spicy meal.

Benihana gives all members of the Chef’s Table a complimentary birthday dinner.  You must provide email certificate and proof of ID to take advantage of this offer.

Get your feast on by registering online with Medieval Times’ Birthday Fellowship.  In addition to seeing a fantastic show for free, gorge yourself on cuisine fit for a King or a Queen.

Celebrating your birthday has never been more fun or economical.  Take advantage of everything offered to you and make this your best year yet.  From free meals and day cruises to full-blown entertainment, there are numerous opportunities awaiting you via the web.  For a complete list of restaurants in your area offering perks to their e-club members, visit FreeBirthdayTreats.com. What are some of the free things you’ve seen offered for birthdays?

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.

Birthday Freebies Worth Checking Out

Cheap BBQ Pulled Pork Recipe Can Feed a Crowd

One of the best ways to save money cooking at home is by using recipes that utilize an inexpensive cut of meat. The problem is that many people think cheap cuts of meat equals tough, or otherwise poor quality meat. This is not always the case. In fact, some of the cheapest cuts of meat produce the best tasting dishes you’ve probably ever had.

That’s why today we’re looking at the pork butt, Boston butt, pork shoulder, or whatever you want to call it. It’s a cut of meat that hardly anyone buys because it’s something you can’t just whip together in 15 minutes and requires low and slow cooking. If you’re a busy parent you may be thinking this recipe isn’t for you, but you’re wrong! The magic of this dish is that it only requires a crock pot and about five minutes of prep work and it cooks itself. Even better, you can usually end up with over 5 pounds of BBQ pulled pork to feed your family for days or entertain a crowd for a little more than $10. How frugal is that?

For the working person this is an ideal crock pot recipe because you can literally dump everything into the pot before you leave for work in the morning, turn it on, and come home to the most tender and delicious pork shoulder you’ve ever had. Since you should ideally cook this for 8-12 hours it’s perfect for those long days at the office or just cooking overnight on a Saturday so you have a no-fuss meal ready for Sunday with leftovers to last most of the coming week. It’s up to you, but it’s impossible to mess up so don’t worry about trying to time out the recipe exactly. I once  started cooking this and had something come up and the pork ended up going for nearly 24 hours. It wasn’t even a problem and tasted as good as always.

Ingredients and Cost

Above you’ll see everything you need to make this recipe.

• 5-7 pound whole pork shoulder (Pork Butt, Boston Butt, etc.) $0.99-$1.39/lb (Around $7 total)
• 1 medium to large onion $0.99
• A few cloves of garlic $0.25
• BBQ Rub Seasoning $2-$3
• Liquid Smoke $1.49
• BBQ Sauce $3.00
• Salt and pepper

I want to talk about a few of these ingredients before we get started. First, the pork itself.  What it’s actually called will vary by location. In some places it’s just a pork shoulder, in others it’s a butt, and sometimes even specifically referred to as a Bostom Butt. Regardless of what it’s called, it’s a hunk of meat from the top part of the front shoulder of a hog and in the whole form as we have here, usually includes part of the shoulder blade bone inside. This is what we’re looking for with pulled pork and it should be incredibly cheap.

Here’s mine. As you can see, we call it a Boston Butt up here. You’ll also notice I picked it up for just a dollar a pound. This was actually marked down slightly because it was one day before the sell by date. Regular price was $1.39/lb. Since this cut isn’t very popular it’s not uncommon to see these sit on the shelves for a few days and then get marked down to try and get rid of them. If you keep your eye out and plan your meals ahead of time you can almost always snag one for really cheap a day or so before the sell by date.

I also wanted to touch on the two other ingredients that may be a little confusing to you. First is the liquid smoke. If you recall from my award-winning chili recipe, I use liquid smoke as part of a marinade. This is the same stuff and we use it in this recipe because we’re trying to replicate some of that authentic smoked barbecue flavor.  Before the hate mail begins flooding in I do want to make a note that even though we’re making BBQ pulled pork, this is not authentic barbecue. In order to achieve that you need to smoke the meat for a number of hours low and slow. If you have a smoker and can do this yourself, then by all means do so. But for the folks who don’t have a smoker or want to make something as close as possible from the comfort of their kitchen this is the next best thing.

Finally, we have the BBQ rub seasoning. I happen to keep Stub’s brand on hand in our house, but if you already have a favorite BBQ rub that you use that’s fine too. If you don’t have a pre-made rub you can easily make your own with a few household spices you already have. In a small bowl mix in some salt, pepper, chili powder, paprika, garlic and onion powder. This is a real common mixture and it is a great rub to use on a lot of different things.

Total Cost

So far our cost for this recipe is a little under $15, and that’s if we have to buy everything listed. If you already stock onions, garlic, BBQ sauce and spices in your pantry you’re e really only looking at the cost of the meat itself. I can’t think of a cheaper meal.

Preparing the Pork

Do you hate spending a bunch of time in the kitchen chopping and cutting food just to get it ready for cooking, which then requires you to stand around tending to it for another half hour? Me too, which is why you’re going to love this recipe. First, take the onion and few cloves of garlic and give them a rough chop. Just quarter the onions if you want. Nothing fancy at all.

Now, just dump the onions and garlic into your crock pot. Go ahead and give them a good few pinches of kosher salt and some freshly ground black pepper. That’s it, we’re done with the vegetables already.

Now you just need to season the pork. Give it a nice good coating of the store-bought BBQ rub or your own spice mix. Don’t be shy as it’s nearly impossible to over season it at this point. If you really want some flavor you can season it and then wrap it in plastic wrap and keep it in the fridge overnight so that some of the flavors begin to really get absorbed into the meat. That is totally optional, but also totally delicious.

Drop the pork into the crock pot with the rest of the ingredients and it’s time to add some of the liquid smoke. This stuff is concentrated so a little bit goes a long way. For this recipe I usually use 1-2 tablespoons. We will be discarding the cooking liquid when we’re done anyway.

To top things off you’re going to want to fill it about two-thirds of the way with water. Be careful and don’t over fill it because it will get boiling and bubbling and you don’t want to make a mess on your counter to clean.

This picture isn’t very exciting, but this is your pork’s home for the next eight hours or so. How long you cook this is really up to you. If you crank it out on high you can finish it in about 3-4 hours. Personally, I usually put it on low and then let it go overnight for at least 8 hours. On a few occasions I got busy and it’s cooked for 12+ hours and it’s still fine. We’re adding enough liquid that there’s no real danger of it all boiling off and burning your meat so don’t get too concerned about the exact cooking time. Also, for reference I believe this is a 6 or 6.5 quart crock pot and it holds a 7 pound pork shoulder with just a little room to spare. Obviously, keep the size of your crock pot in mind when deciding how big of a piece of meat to get.

After letting it cook for a number of hours this is what you’re left with. A big brown juicy hunk of awesome. The only thing left to do now is separate the meat from the bone and most of the fat so that we can drain all of the liquid. So, go ahead and grab the single shoulder blade bone and just pull it out. The meat is so tender at this point it will slide right out.

Once you remove the bone you can just take a slotted spoon or some tongs and fish out all of the chunks of meat from the crock pot and set it all aside in a large bowl. This is also your chance to separate all of the fat and everything sticking to some of the meat so in the end you’re actually left with a relatively lean pile of meat.

After you’ve pulled all the meat from the crock pot you can go ahead and dump all of the liquid, fat, onions, and everything that remains. I’m sure you could find a use for this stock if you wanted, but in my experience it tends to be really fatty since you render almost all of the fat out of the meat so it isn’t the most useful. Once you’ve dumped the liquid and fat you can throw the meat back into the crock pot.

Now we get to actually make it look like pulled pork. The meat is so tender at this point that there’s not much pulling involved. All you have to do is take two forks and use them to shred the meat. As you can see above I’d hold one in each hand in the position they are and then drag them toward the outside of the pot. Repeat this for a few minutes and you’ll have a perfectly shredded pile of pork.

All that’s left now is to add the BBQ sauce. I prefer Sweet Baby Ray’s, but any sauce that you love is perfect. Depending on how big your pork shoulder is you may need anywhere from a half a bottle to a whole 40 oz bottle of sauce. In my case, the 7 pounder required nearly a full 40 oz bottle of sauce. Start by adding a small amount and then mix it in to see how it looks before adding more. You can always add more sauce, but once it’s mixed in you can’t remove it. So play it safe and start slow.

And there you have it. After adding all of my sauce and mixing it in for a few minutes I’ve reached the consistency I wanted, which was perfect for putting on a bun to make a sandwich. At this point the pork probably needs to be heated up a bit, but here’s a little tip. Because you’ve now added sauce to the mix that is high in sugar you have to be careful with the heat. Even on low, if you let it sit for maybe a half hour you could find it starting to burn on the sides. Low is fine if you’re able to keep stirring it every 10 minutes, but don’t let it sit unattended at this temperature. If your crock pot has a “keep warm” type setting, this will work perfectly. Otherwise, as long as it’s warm enough to serve, your pork is done! I bet you already know that, because if you’re like me you’ve been picking at it for hours.

And here is my final product. This is how I eat it, nice and simple. A pack of hamburger buns, a quick toast on a hot pan, and a big pile of pork. It doesn’t get much better than that. When serving them to others I always like to keep some cole slaw and dill pickles on-hand to go with it, which are very traditional sides. But how you eat it is up to you. My wife is happy with just scooping some into a bowl and eating plain, it goes good on a big fat piece of Texas style garlic toast, and even makes some great BBQ burritos.

With so many options and the fact that it freezes nicely it’s great to make a big batch of it and then eat it fresh for a day or two and then freeze the rest so you have a quick meal on-hand for those busy nights when you don’t feel like cooking. For us, this is just one of those things that’s perfect for entertaining. When we have a poker party or a group of people over to watch a game it’s easy to just let it sit out in the crock pot staying warm and put a pile of buns next to it so people can make sandwiches as they come and go. And for $10-$15, can you really go wrong? I hope you enjoy this BBQ pulled pork recipe as much as I do.

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.

Crock Pot BBQ Pulled Pork Recipe for Under $15 – Easy and Frugal

Raise your hand if you’re ready for spring. That’s what I thought. If you’re like me and many others up here in a cold part of the country you’re probably anxious for March to arrive next week and hopefully bringing warmer weather with it. It seems like it’s been an abnormally long and cold winter, but I think I end up just feeling this way every February regardless. But if I recall, I believe we had our first snowfall of the season back in October and we still have a lot of snow on the ground heading into March. As far as I’m concerned that’s near six months of winter, which is too much.

What I really love about the arrival of spring are the 3 Gs: golf, gardening, and grilling. I especially can’t wait for golf this year. Now that I’m working from home I will have a little more time to practice my game. Instead of just playing once every week or two I should be able to get a round in a few times a week. This will likely have a huge impact on my game. Gardening is going to be a bit of a challenge since we’ve moved. We no longer have a garden and also have a nice irrigated back yard so it’s tough trying to decide what to do. I’m almost thinking about doing a few raised garden beds but haven’t yet decided. But I’ll have to do something because growing fresh tomatoes is a requirement!

While I think about spring you can enjoy these links.

TurboTax 2010 Has Some Nice New Features – I’ve been a fan of TurboTax for a number of years even though I now have a CPA do my taxes, but each year they seem to offer a lot of new improvements that make the tax filing process even easier. Here are this year’s new features.

Square Foot Gardening: How To Grow Vegetables In Your Own Backyard – This is similar to what I had in mind for our garden, although on a slightly bigger scale. I really like the idea of not having to prepare and till the existing lawn.

Mortgage Interest Deduction Myth – As Jim points out, the mortgage interest deduction isn’t all it’s cracked up to be. It’s nice if you have a large enough mortgage to make it worthwhile, but for many the standard deduction is still the better deal.

The Key To Living Frugally – Want to live a frugal life? It’s probably no surprise that requires living within your means. That can be hard these days, but here are some steps to help put you on the right track for a frugal life.

How to Get FREE Manufacturers Coupons – Coupons are great because they are an easy way to save money, but did you know that many manufacturers offer all sorts of coupons and usually all you need to do is ask? Learn how to get your own free coupons.

Do You Have to File a Gift Tax Return? – Did you give a child, relative, or someone else a substantial gift last year? If so, you may fall under the gift tax. My Dollar Plan talks about the gift tax and what you need to know.

Workplace Violence – Ever feel like punching that annoying co-worker in the cube next to yours in the face? You’re not alone. Workplace violence is a real and serious problem.

Graduate School Costs & Options – I spent some time trying to get an MBA a number of years ago, but in the end the costs began to outweigh the benefits. Choosing graduate school isn’t a decision to be taken lightly so it pays to understand the costs and options.

Credit Card Act: New Laws Are In Effect, So What’s Next? – As you probably know, the new credit card laws took effect this week. There are a lot of changes that affect almost everyone, so what’s next?

Analysis Paralysis: The Cost of Inaction – I’ve talked about this before, and the cost of waiting can be huge. People always want to wait until the time is right, especially when it comes to finances and investing. News flash: the longer you wait, the bigger of a hole you end up digging yourself. Waiting to take action could end up costing you more than the reason you waited to begin with.

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.

Friday Finance Findings for February 26th