My Personal Finance Journey

How Much Is Your Smart Phone Data Plan Really Costing You?

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

The following was originally published as a guest post on Free Money Finance written by me on January 20th, 2011.

Recently, I took a trip to the lovely land of Verizon Wireless.

I embarked on this journey due to the fact that my family’s chocolate lab, Portia, had chewed up my cell phone the day before, after it accidentally fell out of my pocket. Poor phone!

Needless to say – I was desperately in need of a new phone.

Before I elaborate further on the story, one thing you should know about me is that one of the things that I feel is unnecessary in my life is a smart phone (i.e. a phone with internet, chat, Facebook, etc capability). I am a big fan of regular phone calls and text messaging, but I realize that with my personality, I would be way too addicted to a smart phone if I got it. Just think – a PF blogger having 24/7 access to their email and blog. My friends would never let me hear the end of it!

Nevertheless, when I entered the store, I was amazed at how numerous the options for smart phones were (Droid, HTC, Blackberry, Palm – just to name a few that I saw). In fact, the options were so numerous that upon checking out, I inquired with the clerk as to if she could give me an estimate of the percentage of people that come in using smart phones.

She mentioned that definitely more than half of people are using them currently. This definitely wasn’t very surprising, considering how common it is to see people using their smart phones in public.

However, this got me thinking – just how much is having a smart phone / data internet plan costing consumers in the immediate and long term? Let’s take a look, shall we?

Smart Phone Data Plan Cost Analysis

According to Verizon’s website, an unlimited data plan (what I hear from my friends that most people choose) costs $30 per month on top of the regular phone/calling charges. That’s a whopping $360 per year!

In order to make this analysis more applicable to real life, let’s consider that our imaginary friend, Jim, is a tech-savvy 25 year old. He’s in the generation that grew up when social networking was becoming popular. He lives and breathes Facebook, Digg, Twitter – the works!

We’ll then consider two competing scenarios.

Scenario 1 – Jim pays the $30 per month every year from now until he retires at age 65.

Scenario 2 – Jim instead saves the $30 per month every year, and invests the savings in a Total Market index mutual fund. His savings in this fund will be assumed to earn 10% per year in interest.

Results

In Scenario 1, the total cost of Jim’s data plan is $14,760.00. Quite astounding if you ask me!
In Scenario 2, not only does Jim avoid this ~$15k expenditure, but his savings accumulate to $175,626.65 as a result of the miracle of compound interest.
Note: for the specific calculations performed to obtain these numbers, please see the Google Docs spreadsheet below at the link below. Simply save a copy to your computer to allow for editing the file.

Google Docs Spreadsheet – Long Term Cost Analysis of Smart Phone Data Plan

Conclusion

The final step in this analysis is to try to make some sense out of these numbers. Clearly, $14,760 is a significant sum of money to be spending over the years for a data plan. Furthermore, if compound interest is added in to the mix, the magnitude of the savings amounts to something along the lines of a down-payment on a person’s house during his/her retirement years.

While for me personally, having a smart phone data plan isn’t worth it, I think it is up to everyone to determine individually whether having a data plan provides enough value in your life. I know that for some of my friends, their smart phone is a “part” of their life – something they wouldn’t want to do without.

The key is to know how much it is truly costing you, and to make your respective decision from there.

So, I leave you with a final question – Is it worth it to you? Share your thoughts by commenting below!

***Photo courtesy of http://www.cameraphonesplaza.com/wp-content/uploads/2009/08/smart-phone-definition3.jpg

What Would You Do If You Needed to Buy a Car? – Part 1 – Sell Your Current Car

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 2 copies of H&R Block At Home Premium Edition

Note: This article was selected as the winning article in the May 2nd edition of the Best of Money Carnival hosted by Crystal @ Budgeting in the Fun Stuff. Head on over to Crystal’s site to check out the rest of the top editor’s picks!

Recently, one of my graduate school friends asked me for some advice on how he should proceed in buying a car. Unfortunately, I was only able to give him general guidelines on this subject.

Why was this you might ask? The reason lies in the fact that I have been lucky enough to avoid the car buying process since being out of college, since I have been driving my parents’ 2004 Honda Accord for the last 7 years. (Side note: Wow! I can’t believe it’s been 7 years!)

While I may not be the world’s foremost expert on the car buying process (after all, the Buying a Car For Dummies book was written by Deanna Sclar, not Jacob @ MPFJ, haha!), the goal of this multi-part posting series is to force me to do some research on car buying and get some great feedback from you readers out there in the process!

So, let’s get started answering the question, “What would you do if you needed to buy a car?”

In thinking about how to shed some light on this topic, the best place I found to start was to determine the best way to sell your car (if you are someone who currently has a set of “wheels”, like the baby in the picture above).

How To Sell Your Current Car

Step 1 – Determine if selling quickly or selling for the highest price possible is most important

When it comes to selling your car, I believe that people generally fall in to one of two categories. And, the first step in successfully achieving your car-selling goals is to identify to which category you belong. A description of each of these two categories is given below.

Category 1 – People who want to sell their car as quickly and easily as possible –
- This category describes individuals to whom price is really not the main issue when buying a car. These people are well-off enough to be able to afford a car comfortably, with the biggest concern being that their normal life is not interrupted by the car purchase process.
- Examples of people who fall in to this category are doctors, lawyers, professional workers, etc. that have enough money in their bank accounts to pay for a new car (or can easily obtain the financing required).
- I would propose that these individuals typically receive high enough pay that the extra 10 hours of time that would be required to become a semi-expert in car value in their local area would not be worth it financially. After all, if you are a lawyer or contractor charging $300-$500 per hour, that extra 10 hours could be costing you THOUSANDS of Dollars.
- However, you could also fall in to this category if you simply do not have the will, desire, or capacity to learn about the in’s and out’s of car buying and car value. While this is perfectly acceptable, I would definitely encourage everyone to read Category 2 below before deciding to which you belong.

Category 2 – People who need to fight for every bit of value from the sale of their car –
- As you might have guessed, the majority of people fall in to this category, where price and value are the deciding factors for car-purchasing.
- This category includes those of us that need to focus on optimizing our personal finances in order to achieve financial freedom. In other words, people in this category will not achieve financial freedom simply by showing up to a $500 per hour-paying nine to five job every day.

Personally, if I were to sell my car, I would most likely be looking to squeeze every last penny out of the sale. Why is this? Simple! Because as an engineering graduate student, my time is currently only worth $9.58 per hour! (Side note: Wow! I am slightly not impressed by that figure! Maybe I should not have calculated that.)

If I can perform several hours of research and squeeze another $2000 of value out of the sale of my car, it could have a significant positive impact on my personal finances!

So, take a moment and decide which category you belong to before reading the rest of this article…30 sec….45 sec….1min……Got it? Ok, time to proceed!

Step 2 – Determine the value of your car

Having determined what type of consumer you are in Step 1, Step 2 involves determining an appropriate value for your car. Please note that the value of the car is not simply the price that the local used car dealer offers to buy it from you in exchange for positive financing on a new car.

As with many financial actions, selling your car is no different in the respect that there are many great resources available on the internet! Some useful resources that can be used to determine car value are shown below, as well as some specific results for my 2004 Honda Accord.

Edmunds.com – Used Car Appraisal Tool
Kelly Blue Book.com – Used Car Value Tool
- Both of these websites are great, FREE, resources that you can use to enter the year, make, and model of your car-to-be-sold, and it will give you 1) dealer trade-in, 2) Private party, and 3) Dealer retail pricing.
- However, I liked Kelly Blue Book’s appraisal tool more because there were more customization detail options available in comparison to Edmunds. I feel like this would result in a more accurate appraisal. Nevertheless, the price estimates generated by Edmunds (for my car) were more conservative (lower) and were therefore the ones cited below.

For my 2004 Honda Accord, the pricing is shown below (from Edmunds).

$5,521 = Dealer trade-in value
$6,464 = Private party sale value
$7, 527 = Dealer resale value (so the price the dealer will charge the next person after you sell it to them).

Step 3 – Determine where you want to sell

After determining the estimated value of your car or truck in Step 2, it is now time to cash in your old car and think about where you want to sell it! As was implicated by Step 2 above, there are basically two options here: 1) trading in your used car at the dealership for a new car or 2) selling to a private party that you find.

As can be seen from the pricing estimates above, you can make considerably more money by selling your car to a private party than you can by selling to a dealer. This is due to the fact that the dealer has to pay less in order to turn a profit for himself/herself when he or she sells the car again.

Because of this, I would propose that your selling strategy be based off of the category of consumer you are (discussed previously).

If you fall in to Category 1, the best place to sell your car is to simply trade it in at the dealership. This will be your quickest and easiest option.

If you are in Category 2, things are not so simply, and we are presented with several options for selling our cars to private parties. Each of these options is discussed below.

However, in my opinion, the first step to selling your car publicly is to buy 1-2 nice-looking “For-Sale” signs to place on your car windows. On each of these signs, be sure to list the pertinent details, including price, mileage, year, model, etc. This turns your car in to a rolling advertisement. And, once you have the signs on your car, don’t be ashamed to frequently shop at crowded areas where your car in the parking lot will get lots of exposure.

Places to sell your car for Category 2 Individuals

eBay – eBay’s motor section is always a good option. However, you must remember that there will most likely be a hefty selling fee involved.
Craigslist – Craigslist has become truly a great place to buy and sell items. Listings are FREE!
Newspaper ads – In the grand scheme of selling a car, the small fee charged by newspaper to list your car are nominal, in my opinion.
Facebook – Facebook isn’t just for teenagers any more! Every one is on it, and Facebook now offers the Facebook Marketplace to buy/sell items.
Friends/Acquaintances/Word-of-Mouth – This is probably the best alternative because you will not be selling to a complete stranger. However, be sure that both parties get a competitive price, even though you may be friends.
Online ads on car buying sites (Autotrader.com, Carsdirect.com, Edmunds.com)

Personally, if I were to sell my car, after determining when should I sell my car, I would probably focus on the FREE options first (friends/word-of-mouth and Craigslist). Then, I would move to newspaper ads, car buying website ads, and then to eBay.

How about you all? How would you or have you gone about selling your car? Did you proceed through a dealership or another outlet? Is price or speed of sale most important to you?

Share your experiences by commenting below!

The Comcast Soap Opera Continues!

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

Dictionary.com defines the word “soap opera” as “a serialized drama, usually dealing with domestic themes and characterized by sentimentality.” That sounds about right for my relationship with Comcast!

In the ongoing, drama-filled saga that is my relationship with Comcast (my cable internet provider), there has been a recent occurrence that I wanted to fill everyone in on!

Background

In my last post regarding Comcast, I discussed/ranted about how Comcast’s customer service team tried to hide the cheaper, Economy, internet package from me when I requested a lower priced service. I was doing this because my Performance internet promo offer was running out and threatening to revert to the $60 per month pricing.

As a result of this post, we even attracted the attention of Comcast’s social media team, which was concerned about me voicing my negative experience with their customer service team, and wanted to correct it. This was very considerate of them. 🙂

In the end (after 2-3 repeated phone calls to the Comcast customer service line), I was able to downgrade my internet service to the $40 per month Economy package two months ago. And, with automatic payments with my Chase Freedom Credit Card enabled to pay my internet fee each month, I figured that I would just be able to sail off in to the internet sunsetting horizon for months to come! Guess again, Jacob! Comcast had other plans for me!

Current Affairs

Having set up my account for auto-payments for my $40 per month Economy internet package fee and being told by the Comcast rep that my account was paid in full until the April billing cycle, I figured my affairs were in perfect order.

However, on Thursday of this past week, I received an email from Comcast (my BEST friends!) saying that I owed them $80 for two billing cycles + late fees for not paying my March balance.

In other words, my account had been marked “delinquent.” Now there’s a lovely word, isn’t it!? Nevertheless, this special occasion called for another lovely call to Comcast’s customer service line! Yah!

Surprisingly, Comcast’s customer service rep was quite pleasant this time. She saw that my account was correctly set up for auto-payments and acknowledged that the error was due to a glitch in their online payment system. She even took off the late fees! Quite nice!

And, on top of this, the customer service rep told me about a 6 month promotional deal for the Performance internet package (faster than the Economy package I currently have) for $20 per month. I jumped at this opportunity because this was half of what I am currently paying.

Furthermore, after checking on Comcast’s website, I found out that they are also currently offering a promo for Blast internet (super fast speed!) for only $30 per month. This is a reminder to us all to keep checking with our utility providers to ask for discounts periodically. It can really save a lot of money!

Is Comcast going to be responsible for making my credit score go down?

Needless to say, I was surprisingly satisfied with my Comcast experience for once. However, one question remained in my mind – would Comcast’s mistake in marking my account as delinquent make my credit score go down?

My initial guess to this question was that it most likely would negatively affect my credit report. However, I wanted to do a brief investigation just to make sure. Listed below are several useful/illuminating links I found on the subject:

Privacy Rights.org – Description of Credit Score Calculations
WikiAnswers – Effect on credit score of late internet bill payments
CreditBoards.com – Effect of utility payments on credit score

The general consensus from the above resources seems to be as follows – “The late payments won’t affect your FICO credit score unless the account gets reported to the credit bureaus. Most utility companies don’t report their accounts unless the debt gets charged off. However, there are some utilities which report to the CRA’s (credit reporting agencies = credit bureaus).”

So, I basically take this as, “it depends on the company.”

Recommended Action Step

Since it appears that the effect of your payment history with utility companies on your credit report varies quite a bit, I would recommend that everyone check their credit report for free once per year (using Annualcreditreport.com) to see which of your utility accounts is actively reporting.

Personally, I just checked my credit report (hadn’t viewed it since March of 2010, so it was definitely time to look again!), and none of my utility bills are being reported. Therefore, I think I may have dodged a bullet on this mistakenly-delinquent Comcast account problem. Good to hear!

Also, be sure to do yourself a favor and place a recurring, automatic reminder on your electronic Google or Outlook calendar (and sync the two) to check your credit report for free once per year on the site above. I just did!

How about you all? Have you had any interesting experiences with Comcast recently? Has your credit score ever been negatively impacted by a mistake in billing such as this?

Share your experiences by commenting below!

***Photo courtesy of http://www.businesspundit.com/wp-content/uploads/2009/12/comcast.jpg

My Personal Finance Journey Vs. The United States of America – How Much Do You Save For Retirement?

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————
Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

For most of the first year of My Personal Finance Journey’s existence, we were running a poll on the left sidebar of the site. This poll was seeking an answer to the question below:

What percentage of your salary do you contribute to your 401K retirement account each month?

In the course of the year that the poll was running, we received a total of 97 votes, with the answer distributions as shown in the pie chart below:

As you can see in the chart, the majority of people on My Personal Finance Journey save approximately 5-10% of their income for retirement each month. This is very good! Great job readers!

Second place was saving 10-15% of your income, and third place was saving 5% or less.

How Does This Compare With The Rest of The United States?

So, we were able to see that the majority of MPFJ readers save 5-10% of their incomes for retirement. Having established this, we then wanted to see how these numbers compare to the rest of the country.

In a study by the Employee Benefit Research Institute of 401K plan usage in the USA, the results below were found:

On average 401K participants saved 6.8% of their salary on a before-tax basis.

So, it looks like our results above were fairly representative!

The typical American household, headed by a 43-year-old, has retirement savings of $18,750.

Yikes – this is a little on the low side!

The typical pre-retiree household (age 55 and up) has a retirement savings of $60,000.

Also yikes! I don’t think this will be enough money for them to live on.
Save some Social Security benefits for my generation! Don’t use it all up! 🙂

Thanks so much to everyone for participating in the poll. Now that this one has been wrapped up, the next poll (up now!) will be asking about savings accounts interest rates you all are earning.

In today’s age, interest rates on savings accounts are going lower and lower, and I think doing a poll such as this would be a good way to make sure we’ll all getting the most competitive interest rate possible!

For example, DollarSavingsDirect.com is currently offering a 1.00% APY interest rate on their FDIC insured savings accounts. On the other hand, Bank of America is offering 0.05% APY. WOW!!!! That is barely anything!

Let’s all make sure we’re not on the wrong side of that coin!!

How about you all? Were the results above indicative of how much you save in your 401K account?

Share your experiences by commenting below!

Also – please share what sort of interest rate you’re currently receiving by voting in the poll on the left sidebar of the site.

Can You Be Denied Approval For a Credit Card Because You Have No Credit Card Debt?

Well folks, I think it finally happened; I’ve actually been “punished” for being too fiscally responsible. Haha!

Yesterday, I was trying to take advantage of one of the free money promotions I posted about (the $100 cash back bonus for signing up for the Citi Dividend Platinum Select MasterCard).

After entering in the normal pertinent details for applying for a credit card, I received the usual “you’ll receive an answer in several business days” message. I thought nothing of it.

To my surprise, this morning, I woke up and had the message below in my email inbox.

Dear JACOB:

Why we’re writing you
Thank you for applying for the Citi(R) Dividend Platinum Select(R) MasterCard(R) account. Unfortunately, we are unable to approve your request for the account at this time because of the following:

Your credit bureau report shows you have no revolving accounts with a balance.

How about that folks? The way I read this news is that I was denied the credit card because I have no credit cards on which I am carrying a debt balance from month-to-month.

In other words, the credit card companies are not making money off me (except for the fees they charge the merchants for each card transaction I make – which by the way, MAKES THEM A LOT OF MONEY).

After half-way coming to terms with what had just transpired, I then did a quick Google search to see if this had happened to anyone else and if they could shed some light on the situation (see the link below for details of my findings).

Google Search For Reasons Why I Was Rejected For Not Carrying a Balance
CreditNet.com Discussion Board About Being Rejected For Not Carrying Balances
CreditBoards.com Discussion Board – Being Rejected for Having No Credit Balances

As it turns out, this has happened many times to people applying to CitiBank credit cards. And, the only thing that the others could figure out was that they were rejected because they were currently paying off their balances in full each month.

What Can You Learn From This?

I think the key thing to learn from this is 1) to not apply for CitiBank credit cards for free money bonuses unless you are carrying a balance month-to-month on your credit cards and 2) to stick to what you know is right and keep paying off your balance in full each month (even if society seems to be enticing you to SPEND, SPEND, SPEND, AND SPEND MORE).

How about you all? Have you ever been denied a credit card for seemingly strange/weird reasons? What did you do about it? Did you ever get the company to overturn their decision?

Share your experiences by commenting below!

***Photo courtesy of https://www.flickr.com/photos/cafecredit/27297023342/sizes/l

Free Money Promotions Catch-Up!

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

It’s been quite a while since I reported on the various free money promotions around the web. So, today, I wanted to fill you in on all the deals I’ve caught wind of in the past few months so that you can take advantage of them, if you are a finance nerd like me!

Listed below are the free money bonuses currently available for signing up for no annual fee credit cards.

Citi Dividend Platinum Select Credit Card

Get $100 cash back after spending $500 in the first three months of opening the account.
1% cash back on all purchases.
Click here to apply.

Chase Freedom Credit Card

Get $100 cash back after spending $500 in the first three months of opening the account.
1% cash back on all purchases.
5% cash back in rotating categories throughout the year.
Click here to apply.

Discover More Credit Card

$50 cash back after making $250 of purchases in your first three months.
5% cash back in popular rotating categories throughout the year.
Click here to apply.

BankAmericard Cash Rewards Visa Credit Card

$50 cash back after spending $100 in retail purchases in your first two months.
Click here to apply.

Bank of America Accelerated Cash Rewards AMEX Credit Card

$50 cash back bonus.
Click here to apply.

Remember: When you sign up for these credit cards to get the free money bonus offers, follow the instructions below to avoid damage to your credit score:

Keep the credit card account open after completing the initial requirements for the free money promotion.
Schedule an automatic, small charge each month on the credit card to extend your credit history. This benefits your credit score.

And, going along with the second piece of advice above, schedule an automatic payment of your credit card balance each from your checking account.

Lastly, I would not recommend signing up for all of these at once. Typically, signing up for a new credit card every 3 months is considered “almost too much.” I would stick to doing two per year or so.

How about you all? Have you taken advantage of any free money promotions lately? Which ones were they?

Share your experiences by commenting below!

***Photo courtesy of http://instructors.dwrl.utexas.edu/schell/sites/instructors.cwrl.utexas.edu.test/files/images/free-sign.gif

On Managing Your Finances as a Young Professional

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

Today’s guest post comes to us from Alvina Lopez. Alvina is a freelance writer and blog junkie, who blogs about accredited online colleges.

On Managing Your Finances as a Young Professional

Entering the real world can be a daunting experience, especially for the many college students these days who were given assistance from grants, loans, scholarships, and their parents.

The truth is, we don’t fully appreciate the money in our bank accounts unless we’ve poured our own blood, sweat, and tears in to earning it. As responsible adults, it’s important that we manage it properly in order to avoid going broke, damaging our credit, and generally making life more difficult than it should be. Here are a few tips we’ve compiled that’ll help you get off to the right start financially:

Resist spending too much from the get-go

This one is certainly common sense, but you’d be surprised by the amount of young adults who go crazy after their first few paychecks. You can avoid that by composing a monthly finance sheet. Once you’re familiar with how much you’ll be earning after taxes, calculate how much you’ll be spending on bills — you’ll likely have rent, electric, water, internet, phone, student loans, car insurance, and hopefully not much else. Subtract those necessary expenses from your income after taxes and you’ll have your disposable income, which can be used for food, gas, clothes and entertainment.

After a couple months of familiarizing yourself with your finances, you should know if you can afford to take on any additional payments. You don’t want to live month to month.

Save, save, save

Have some money left over after each month? Great, then you’re doing your job. However, don’t be tempted to splurge on items and services you don’t truly need. For example, you don’t need the premium cable channels. Don’t eat out each day. Bring your lunch to work. Set a limit to how much you spend on food each week, and only buy what you know you’ll eat from the store. Plan your car use and save on gas. The money you save can be used for more necessary stuff or put into savings. It’s always good to have cushion just in case unforeseeable circumstances — like car troubles or being laid off — affect your pocket book.

Enroll in online automatic bill-pay programs

The bills will add up now that you’re entirely on your own. Keeping track of all of those bills and when they’re due can be difficult given your other newfound responsibilities as an adult. Fortunately, you can save the hassle by enrolling in online automatic bill-pay programs on the websites of either your bank or the company you’re paying. As a result, you won’t miss payments and you’ll build your credit, saving money in the long run.

Determine when the time is right to purchase a car

Living in a commuter city and still driving that hunk of metal and plastic your parents bought you for your 17th birthday? You may not have much of choice but to buy (or lease) a car. Of course, you should consider doing so only if you earn enough and spend modestly, otherwise you should consider public transportation and carpooling.

Leasing can offer lower monthly payments, but you’ll be paying for a while until the lease is up. If you plan to buy, you should be prepared to provide a hefty down payment. Obviously, the process of buying (or leasing) is extremely complicated and requires a considerable commitment of time in order to get the best price possible. Here’s some a great advice about car buying from mint.com.

Enroll in a personal financial management service such as mint.com

Free of charge, the aforementioned Mint.com provides more than just financial advice, allowing users to track their bank and savings accounts, loans, credit cards, and spending habits. That information also helps them set goals and establish budgets. Even if you aren’t earning a lot of money and your financial situation isn’t overly complicated, it’s a great tool to have. You can never be too prepared on your new financial journey.

How about you all? What tips helped you get ahead on your finances after joining the real world after college? What didn’t work for you?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

@ Resisting spending from the get-go

I am continuously amazed at how many people feel seemingly obligated to load up on a extra debt the minute that they have a real job. You think, “Hey, I’m making $60k, I gotta spend it somehow, right?”
But, you really can give yourself a head start on life by resisting the urge to buy a house, a new car, new furniture, and new sound equipment the first year out of undergrad.
Another fact of life is that having more debt makes you less flexible in your life plans. Think about it, if in 2 years after starting working, you want to go back to graduate school, you won’t be able to afford to take that step if you are $100k in debt on cars, houses, etc. The same thing goes with if you were asked to move to be with someone you were wanting to marry.

Two of the most important things I did coming out of college were 1) establish an emergency fund with 6-9 months of expenses in liquid, cash assets (high yield money market online savings account) and 2) set up and fully fund a Roth IRA each year. Do both of these things and you’ll be well on your way to financial freedom!
@Mint.com – I have signed up for Mint.com, but have never really used it. For me, I have a very good idea about where I am financially each month that the budgeting interface Mint offers doesn’t add any value.

How about you all? Do you use Mint.com? How does it work out for you?

***Photo courtesy of http://www.clevelandwomen.com/images/virginia-marti/03-26-08column/young-professional-women-2.jpg

How to Ease Your Gasoline Pain: A Few Tips

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

Today’s guest post comes to us from Tara Miller, who regularly writes for Psychology Degree. Enjoy!

How to Ease Your Gasoline Pain: A Few Tips

With the recent trouble we have seen in the Middle East, oil prices have dramatically risen in the past few months, causing gas prices all over the world to reach new highs. As the summer comes around, we can expect those prices to rise as they usually do.

So, if we’re trying to be frugal with our money and expenses, then we should also strive to be frugal in how we consume gasoline in our cars. I’ve tried to list a few cost-saving ideas for those of us who want to ease our pain at the pump.

It’s Important To Do Regular Maintenance

First of all, think about the state of your car: is it in relatively good shape? If not, then that could be one of the factors behind your higher gasoline consumption and spending. Think about how important it is for an athlete to stay in shape if he or she wants to be competitive, and then you should try to apply that to your own car.

If its air filters are clean, if it has new oil, and if its tires are inflated properly, then the car can operate more efficiently and use less gasoline doing so. Always follow the maintenance schedule recommended in your vehicle’s user manual, and be sure to check the tires for proper inflation every few days.

Know The Traffic Situation

Being aware of the traffic patterns and backups along the routes you mostly travel is especially important as well because that knowledge can help you minimize the amount of time you spend on the road burning gasoline.

Use a GPS device or your smart phone to get live traffic updates when you drive around as well, as this will help you adjust your route when you do in fact hit bad traffic. Combining your knowledge of the area and your real-time information regarding the traffic situation will help you skirt past the backups while everyone else wastes gas as they wait to move.

Plan Your Errands

When you do have to drive around, either to and from work or to run errands, you should take some extra time to plan out your route and your tasks. Creating this kind of plan will ensure that you make the most of your gasoline and your driving time. For example, if you have errands to do, try to do them to and from work, so that way you don’t have to take extra trips. Likewise, use a mapping application to figure out the shortest and least congested routes between each location you have to visit.

Try Alternate Forms of Transportation

This is perhaps the toughest tip, as it might require you to change a great habit of your life, but it might be worth it in the end. If you’re able to, try to take alternate forms of transportation when you can. This means you could take the bus to and from work, or you could use the subway system to get around the city. Or even just using these forms once or twice a week could greatly reduce your fuel consumption and help you save money.

How about you all? How have the higher gasoline prices affected you so far? What techniques do you use to lower your spending on gas?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

@ The Importance of Regular Maintenance – I am definitely in agreement that regular maintenance is important in order to keep your car running well and in a fuel efficient manner.

However, one thing that I do not know how to handle is the following – when I take in my car for the regular “every-3000 miles” service, they mechanics always come up with a laundry list of problems that could be potentially fixed. If I got them all fixed, I would probably spend close to $2000 each time I brought the car in.
How do you discern between what really needs to be fixed, and what doesn’t?

***Photo courtesy of http://progressivestates.org/sync/images/dispatch/gasMoney.jpg

How to Save Money without Being a Cheapskate

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

The following is a guest post from Ally with Home Loan Finder.

How to Save Money without Being a Cheapskate

These are hard and trying times; people appreciate it when you can save money without being a miser. But, how can one be frugal without being labeled a cheapskate? It’s all about making smart spending choices that allow you to get the most for your money without affecting other people negatively.

There is a significant difference between frugality and borderline cheap. A frugal person is disciplined, showing restraint when spending money. A cheapskate, however, is stingy, and will avoid spending money at all cost. A frugal person is careful and economical, always comparing choices and figuring out which will benefit him best in the long run. A cheapskate will not think twice about going for the lowest expense, even for inferior and knock-off products. A frugal person will make money decisions that will affect only himself; while a cheapskate will try to get by, by leeching of another. Frugality has an almost heroic quality, while being a cheapskate is labeled as selfish. Frugal people know how to save money to be spent for achieving their life’s happiness. Cheapskates, on the other hand, save money simply for the sake of it.

You want to be the person that everyone wants to emulate because of your resourcefulness; not the person who they stay away from because you tend to rely on them for freebies. Here are a few ideas that can help you on your way to saving money without becoming a cheapskate:

Reduce and Reuse Your Waste

Live a greener lifestyle; it will not only help the environment, and it will also save you money. A person who helps nature is never a cheapskate. Here are some tips:

Use glass, ceramic, or steel utensils as long as they’re dishwasher-safe. The reason for this is so you don’t get lazy with doing the dishes and be tempted to use disposables. Always think of non-disposables and sustainability when buying things. Instead of disposable plastic cutleries and paper plates, use the real thing.
Always keep a canvas bag handy so you can avoid paying for extra plastic bags when you go shopping. It should always be fold-able to fit in our purse or bag.
Lessen paper consumption at the home and office. Use both sides of copy paper and stationary. Turn into scratch pads those papers that have only been used on one side. Send emails or chat messages rather than written letters or memos.
Avoid printing out materials whenever possible. If you must, use the printer-friendly version and always use the back side of used paper. Optimize your printing by reducing margins to print as many data in one page. Choose font that consumes less ink like Ecofont and Evergreenfont.
Switch from paper to cloth napkins; paper towels to sponges (or old but clean small cloth towels). Cloth napkins can be washed repeatedly; the same goes for sponges which can be cleaned in the microwave or dishwasher. Also, remember to switch off lights and other electrical items when not in use.

Seek Efficiency and Sustainability

Always choose quality over quantity. This goes for everything, from food to fashion items. The higher the quality, the more effective and durable it is. Branded items do not necessarily mean better quality.

When choosing between similar items, select the one with the least superfluous packaging; it adds to the cost and waste.
Switch to compact fluorescent bulbs; they last ten times longer than incandescent bulbs and use 75% less energy.
Avoid loading your phone bills with services such as call waiting and call messaging.

Avoid Costly Habits

Here are some examples of bad habits that waste a considerable amount of money when kept that way:

Forgetting to pay bills on time
Paying for a gym membership and never using it
Overstocking groceries like vegetables that only go bad in the fridge. This will diminish your meal savings in no time!
Buying stuff at full price without even trying to look around for discounts or sales.
Paying for services that you might be able to do yourself.
‘Pigging out’ or engaging in ‘retail therapy’ when you’re bored or emotionally disturbed.

Avoid Temptations

Don’t get catalogs or emailed announcements from companies trying to sell you cool new products or announcements of sales; it only tempts you to buy something you don’t need. Remove yourself from listings and reduce the amount of junk mail you receive at home and the office.

Look For Cost-Free Options

A resourceful person can save a lot of money by learning how to do things rather than buying new things or paying somebody else to do it for them. Look for free or cheaper alternatives with everything.

Reduce your subscription to newspapers and magazines you buy by sharing it with someone or read some or all of them online. You can also get them at a library which is better because you’ll lessen your electrical consumption with the free air conditioning or heater. Going to public buildings such as malls and museums for leisure or when you want to relax also benefits you the same.
Cut out mobile and cable TV, or downgrade the subscription package you’re getting. There’s a lot of call, messaging options, and free streaming online if you look.

Borrow or barter. Rent, borrow, or share occasionally used items such as party supplies, ladders, lawn tools, and so on, instead of buying them. Give books and clothes and toys you don’t need anymore to your friends and family and ask if anyone has something that you need as well. Barter. Learn how to get the things you want and need for things that you don’t. You can even offer services for them in exchange.

It is essential to balance everything, including money. Take a close look at your principles and be sure that you aren’t sacrificing your them in the pursuit of free or cheap. When your approach about spending and saving money affects other people or you find yourself almost always anxious about money, it’s time sort of your money saving principles.

How about you all? For you, what is the defining line between cheap and frugal? What techniques do you use to make sure that you don’t fall in to the cheap category?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

This is a good post on an interesting topic. As a personal finance blogger, I tend to walk a thin/fine line between being frugal and cheap. It is sometimes a little hard to understand what makes someone cheap and what makes someone frugal.
However, some examples on how I would personally draw the line are shown below:

Cheap = Signing up to go on a ski trip in West Virginia with a group of friends, having something come up that makes you have to cancel after the group leader has already made the lodging accommodations, and not paying them back for your share.
Frugal = Respectfully saying that you can’t go because something came up, but still paying the group leader back for your share.
Cheap = Going to eat at a fairly nice restaurant, spending more money than you are comfortable with, and then tipping only 5%.
Frugal = Eating at the nice restaurant, spending more money than you are comfortable with, tipping 20%, but then not eating out at all for the next two weeks to make up for the error.

***Photo courtesy of

http://jeremyfain.files.wordpress.com/2009/05/cheapskate.jpg

Taking Responsibility for Your Actions

————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————

Click here to enter my free giveaway for 5 copies of H&R Block At Home Premium Edition

This is a guest post from Eric at Narrow Bridge Finance as part of the Yakezie blog swap. This week, everyone wrote about their biggest financial pet peeve. You can view my post at Eric’s blog too by clicking here.

We all have opportunities to impact our personal finances. When you are offered a new credit card, when you go to the store, when you get a check in the mail, and when you are out for lunch you are making financial choices.

Nothing bothers me more than when people make choices, they have bad results, and they blame someone else.

When you were in college, you had a choice to say no to the free pizza for getting a new credit card. When you were at the mall, you could have walked past the shoe department. When you got your birthday check, you could have put it in the bank. When you went to lunch, you could have picked a burrito place over a steak house.

Not that any of these exact scenarios apply to you, but these, and many similar scenarios, happen to each of us every day.

You always have a choice. No one made you do anything. I have a few great stories from my days in banking that prove my point:

· A woman came in crying because of her overdraft fees. She said her husband had been laid off and that they were struggling to pay the rent. I opened up her account and saw that they were chronically low on funds and had a handful of bounced checks. I also saw that she “had enough money” to go to the liquor store at least once a week. Now she is blaming the bank and her husband’s former employer for her financial problems. She should look in the mirror.

· A man came in and said that the bank “stole his money” from his account leading him to overdraw. I went through his ledger with him line by line and proved that it was not the case. He blamed us for stealing his money. He should have blamed the ATM at the casino where he had spent the last two days. Without that weekend in the mountains, he would not have had a problem. We didn’t make him go to the casino, it was a choice.

· A young woman was incredibly angry when the bank took money from her account an applied it to her outstanding credit card balance with the bank, which she had not made a payment toward in over six months. When she was done screaming at me, I read her the notes from her customer record. We had mailed six letters and called dozens of times. She did not respond to either. Maybe she should have responded or not spent the money she didn’t have in the first place. I didn’t force her to go to the store and buy stuff.

My biggest financial pet peeve is not taking responsibility for your actions. It is okay to screw up. We have all done it. However, you can respond by blaming someone else or taking action to fix the situation. I did overdraw once. I talked to the bank (calmly), brought my account current, and asked them to waive the fee. They were happy to. It pays to take responsibility and fix your problems.

How about you all? What financial moves that people make make your blood pressure rise?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

@ Accusing the bank for “stealing your money” – This story is a true gem! It’s wonderful to know that there are people out there that think that just because you swiped your debit card at a store, it doesn’t mean that you authorized your bank to take it out of your account! Pure genius!

***Photo courtesy of http://www.flickr.com/photos/dfoster/2809020321/sizes/m/in/photostream/

Category Archives for Saving Money & Frugal Living