"The Total Money Makeover" (Chapter 2)

Continuing the theme of attitudes, Dave Ramsey's 2nd chapter is entitled, "Denial: I'm Not That out of Shape."

For many, this is the major attitude that must be overcome. I know it was for me, before Leah and I got serious about money.

People with this attitude can look at someone in their family or neighborhood who is worse off than they are and say, "See, we've got more stuff than they do." To ask a simple question: why are you worried about stuff???

Many people are leveraged to the hilt! They are paying on a mortgage, 2 cars, 5 or 6 credit cards, student loans and 2 or 3 personal loans. They are, literally, one bad day away from total financial disaster. We need to stop using thoughts like, "I only have $5000 in credit card debt," or "It's student loan debt, so it's not that bad."

We need to learn to see debt as a problem, but a problem that can be overcome. Overcoming debt takes change, though, and change is hard for many people. Quoting page 15 of the book:

Change is painful. Few people have the courage to seek out change. Most people won't change until the pain of where they are exceeds the pain of change.

It is when we look at the person in the mirror and are able to say, "I have a money problem," that we are able to begin attacking that problem.

Look in the mirror...then continue with the book!

Sometimes It Hurts

Getting out of debt isn't easy. It takes focus. It takes sacrifice, at least to some degree.

But sometimes, like today, it hurts a bit.

I know we aren't supposed to be attached to "stuff," but some "stuff" has sentimental value, and today we got rid of two pieces that were a little hard to get rid of.

First, we put some things in a yard sale with a neighbor. We didn't have enough items to have our own, so we asked if we could just combine with them. They were kind enough to allow us to do that. One of the items was a futon that we bought just before moving to Haleyville. It was our "big piece" in a den in our first house in Haleyville. Not a major loss, but it still was a part of us that moved from Somerville to Haleyville.

But, the other WAS a big deal. About 5 minutes ago, a guy drove off with a car. My 1991 Ford T-bird sold on eBay yesterday, and the man came to pick it up today...and actually hauled it off! This was the car that Leah and I dated in. We took it on our honeymoon. It's been to Kentucky many times. Faughnmobile II is no more.

But, while getting rid of stuff like this hurts a bit, the cash in my pocket is really helping things. And, then, when I think of going to the bank tomorrow to put that cash on our loan...things really start to brighten up!

...and it's just "stuff" anyway!

Gas $$ Saving Tips: A Review

Today we posted our 21st and final gas saving tip. We hope you have found these helpful. Some may save a little, while others may save a lot, but add them all together, and you've got some good tips.

Below are links to all 21 tips.

Tip #1: Use GasBuddy.com

Tip #2: Keep Your Tires Properly Inflated/Use Nitrogen

Tip #3: Combine Trips

Tip #4: Buy Gas when the Temperature is Cooler

Tip #5: Walk or Ride a Bike

Tip #6: Don't "Top Off" the Tank Excessively

Tip #7: Buy Gas on Wednesday

Tip #8: Don't Jackrabbit

Tip #9: Use the A/C Sparingly

Tip #10: Use Cruise Control

Tip #11: Use the Lowest Octane Gasoline Your Vehicle Can Handle

Tip #12: Don't Stop if You Can Avoid It

Tip #13: If You are a Member, Buy Gas at a Discount Club

Tip #14: Avoid Excessive Warming Up of the Engine on Cold Days

Tip #15: Don't Pack Heavy Stuff

Tip #16: Don't Idle too Long, but also Don't Start and Stop the Engine Excessively

Tip #17: Remove Anything that Causes Drag

Tip #18: Anticipate Hills

Tip #19: Buy a Hybrid

Tip #20: Change the Oil (General Car Maintenance)

Tip #21: Use Overdrive Gears when Possible

Got other tips, or thoughts on any of these? Please feel free to leave a comment.

Gas $$ Saving Tip #21

I am nowhere near a "mechanical" guy. Dave Barry once said of himself what I often think about myself: "I'm the kind of guy who, if the 'check engine' light comes on will fix it by putting duct tape over it." That's very much like my level of mechanical know-how.

So, I do not understand how today's tip works, I just know it does. When Possible, Use Overdrive Gears. Obviously, this does not mean to use overdrive when you are traveling at 25 mph going to the grocery store. But, when you are going highway speed (especially on the interstate), this is a great way to gain a few mpg.

"The Total Money Makeover" (Chapter 1)

In the opening, and brief, chapter of The Total Money Makeover, Dave Ramsey tries to get the reader to understand that the problem lies with them. So often we want to blame our troubles, including our financial woes, on others. We need to answer the question Ramsey asks on page 3: "Are you ready to take on the guy or gal in your mirror?"

What a great question!

Chapter one is the first of the "attitude" chapters, as I call them. We need to take a look around and see what is happening to our finances. Ramsey is very forward in pointing out that, if things were going swimmingly with our money, we wouldn't have bought the book! He teaches us to try his way--all the way. While later chapters will actually unveil the plan, he wants to lay the groundwork now that it takes a total effort (and, if you are married, a total team effort).

Chapter one also gives the "motto" of The Total Money Makeover: "If you will live like no one else, later you can live like no one else." That statement is found at the bottom of every single page of the book, so the reader will continue to see it and believe it. To explain the motto, Ramsey writes:

It's my way of reminding you that if you will make sacrifices now that most people aren't willing to make, later on you will be able to live as those folks will never be able to live. (pages 5-6)

Chapter one is brief, but a very good introduction. Some will not want to work, so will not continue reading. I hope you will be different from them. This book contains valuable information in upcoming chapters.

Gas $$ Saving Tip #20

My dad would be very proud of the tip for today. In fact, I think most dads would. This is one of those tips that your father always told you to do, but, to be honest, you never figured out the reason for until you were older.

Change the Oil. In fact, this tip really includes all general maintenance (air filters, tire rotations, etc.). Time and again it has been shown that, when a car is properly maintained in a general way, that car gets better gas mileage.

If someone changes your oil for you, it is worth the couple of extra dollars for a "full service" visit. They will check all the things that need checking to insure good mileage. If you change your own oil, don't forget to check the other things as well.

The Total Money Makeover: An Overview

For those trying to get out of debt, books by Dave Rasmey are often recommended. I listen to his radio show about once a month (we can't get it where I live, so I have to listen via internet), and I have seen him at a live event in Birmingham.

He is probably best known, though, for his books. The Total Money Makeover simply walks readers through two major sections.

• The first part of the book (chapters 1-5) deals with how to view money. Myths about money are discussed as are attitudes.


• The second part (chapters 6-13) deals with Ramsey's "baby steps" to wealth.

In these reviews, I will simply give my impression of each chapter of the book. I own the book and have read it cover-to-cover three times. While I don't follow everything in it, I see the wisdom behind the book.

Overall, the book is helpful, and I hope you will see the value of picking it up as we discuss each chapter, starting tomorrow.

If you wish to order the book, you may click on the ad below.

Dental Insurance: Is It REALLY Worth It?

Since I haven't been to the dentist in about 2 and a 1/2 years, and Stacey hasn't been in 5 or 6 years, we're starting to plan to go to the dentist. Since we don't have dental insurance, this post is personally one that I have been examining with great interest.

Cost of Premiums: Two alternatives will be examined.
1. BCBS Dental Insurance - True dental insurance for an individual and spouse through Arkansas Blue Cross/Blue Shield is $55.20 per month, or $662.40 per year.
2. Dental discount groups - These discount groups are not true insurance, but can be purchased for pretty cheap and give considerable savings at some dentists. One example is Dentemax Discount Dental Plan available through dentalplans.com. The cost of this plan is $150 per year (and that includes any dependent children).

Expenses in Need Without Insurance: I called the dentist office I plan to go to for the first time here soon for prices. $130 for a new patient exam and x-rays, $50 for the cleaning. Assuming both Stacey and I do an initial visit, plus an extra visit each (say $80 for that visit, cleaning and exam), and that we have one filling (at $100...estimated based on this dentist's prices compared with those here) the price for all of this without any discounts or insurance would be: $620. However, I don't think the extra visits or a filling would really be that much from this dentist.

Cost of Premiums + Deductible in Use
1. BCBS Insurance - There is a $50 deductible for fillings and other covered restorative services. Coverage is 80% for preventative and minor restorative services. Thus for the visits listed above with this insurance: $114 'co-insurance' + $50 deductible + $662.40 = $826.40.
2. Discount Plan - In depth checkup twice at $33 each; 6 month checkup twice at $22 each; Adult Teeth Cleaning 4 times at $43 each; One filling at $65. Total cost: $347 at the visits + $150 for the plan = $497.

Conclusion: Dental Insurance really doesn't make sense, unless you are going to be needing major restorative service (in which case the BCBS plan above only pays 50%, and pays out a maximum of $1,000 per member per year . . . so it still might not be worth it). A dental discount plan may be very beneficial, depending upon where you live. I would have to drive at least an hour to find a dentist which accepts the discount plans described, so it's not worth it to us. Since I've only had one filling ever in my life, I don't expect to need any for a lot longer. So dental insurance and discount plans aren't for me. Instead, we'll try to deposit a little extra each month into savings, and spread it out over time in that way, “self-insuring.”

NOTE: Over the following weeks I will return to this series (Insurance: Is It REALLY Worth It?). I believe it will be beneficial to examine car insurance, cell phone insurance, and extended warranties or service protection plans, although perhaps not in as great of detail. If you have other types of insurance you would like me to examine, post a comment, and I'll consider doing so. This is the last post concerning insurances relating to health, though.

Gas $$ Saving Tip #19

The tip for today may not be feasible for everyone. It certainly is not for me at this time. However, if the cost is worth it, this may be the best tip of all:

Buy a Hybrid.

Many people, though, see "55 mpg," go out and get themselves into major car debt. Hybrids are not cheap. However, if you are going to use the car primarily for city driving (stop and go), and you can get a nice used hybrid at a decent price...and can pay cash for it...then this tip may save you a ton of money.

To help you do some research, here is a link to hybridcars.com. While, obviously, they are trying to get you to purchase a hybrid, the site is still good for a starting point in your research.

Also, it's not too far in the future that we will see cars that are all electric. In fact, Chevrolet is coming out with the Volt, possibly by the end of the year. Here is some information on that car.

Gas $$ Saving Tip #18

Monday afternoon, I broke this tip, oddly enough because I was thinking about this post!

Today's tip is Anticipate Hills.

You know how you are rolling along and then, all the sudden, out of nowhere, there is this hill?! Okay, you know it doesn't work that way. We usually know where hills, especially large hills, are. And, when we get half-way up and then press down on the accelerator, we kill our gas mileage!

The best way to handle hills it to give your car some extra "juice" for the last 100-250 feet before ascending. Do this, and you will save a lot of gas, especially if you are in extra hilly terrain.

Shall Our Brethren Go To War Alone?

The flea and an elephant crossed the bridge. When safe on the other side
the flea said to the elephant, “Boy, we sure did shake that bridge, didn’t
we?”

That little story is all too characteristic of what we see in many congregations of the Lord’s Church. A minority of the people do a majority of the giving and supporting the work of the congregation. Christians must come to understand the shared responsibility they have with their brothers and sisters within the congregation. In chapter sixteen verse two of Paul’s first letter to the Corinthians, Paul instructed that “each one” of the Corinthian Christians was to lay something aside. Every single Christian has shared responsibility in the Lord’s Church; that is true in regards to our financial giving as well. However, far too often in the Church today some people give 25% while others will barely give 2%. This problem has been caused by people not carrying their fair share of the load. The story is told that J.P. Sanders saw a group of ants carrying a dead grasshopper along on their backs. Looking a little closer he saw that some of the ants had climbed up on the grasshopper and were just getting a free ride. God wants His children to get off of the grasshopper and start carrying their share of the load.
One of the greatest examples of this shared responsibility is seen in the Israelites occupation of the promised land of Canaan. In Numbers chapter 32, before Israel entered into Canaan, the tribes of Reuben and Gad requested that they be allowed to settle in the land of Jazer and the land of Gilead. They desired this land because they were cattlemen, and they saw that the lands of Jazer and Gilead were good for cattle. Moses replied to their request in Numbers 32:6 with some very penetrating words saying, “Shall your brethren go to war while you sit here?” Moses was making the point that the tribes of Reuben and Gad had an obligation to support the other tribes of Israel as they went to conquer the land of Canaan. The leaders of these two tribes reassured Moses that they would not abandon their brethren. The Bible tells us that Reuben and Gad were allowed to occupy that land only after they fulfilled their obligation to help their brothers and sisters take possession of the land of Canaan.
In the Church today we are at war with the army of the Devil in the same way that Israel was at war with the pagan nations of Canaan. Paul stressed this point throughout his writing. In Ephesians 6:11-13 Paul encourages his brethren to, “Put on the whole armor of God, that you may be able to stand against the wiles of the devil. For we do not wrestle against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this age, against spiritual hosts of wickedness in the heavenly places. Therefore take up the whole armor of God, that you may be able to withstand in the evil day, and having done all, to stand.” He admonished Timothy in 1 Timothy 6:12, “Fight the good fight of faith,....” And in 2 Timothy 2:3-4 he warns, “You therefore must endure hardship as a good soldier of Jesus Christ. No one engaged in warfare entangles himself with the affairs of this life, that he may please him who enlisted him as a soldier.”
This war which Paul describes can be won, but we need more preachers, more missionaries, and more benevolent acts so that the love and Lordship of Jesus Christ might be demonstrated to a lost and dying world. All Christians must understand that they have a responsibility to the Lord and the Church not to let their brothers go to war while they just sit there and do nothing. All Christians must take their responsibility seriously to support the war effort. That includes people of all ages, people of all economic levels, people of all social statuses, and people of all different situations in life. If one is a Christian then he has an obligation to give to the Church.
While most would deny the truthfulness of “faith only” salvation, too many of those same people in the Church are practicing “faith only” religion. They say that they believe in Jesus Christ. They say that His body is the most important thing in their lives, but they fail to demonstrate that faith by parting with their precious money. James said in James 2:17-18, “Thus also faith by itself, if it does not have works, is dead. But someone will say, ‘You have faith, and I have works.’ Show me your faith without your works, and I will show you my faith by my works.” Which is worse? Preaching “faith only” salvation or practicing “faith only” salvation. I would hate to be guilty of either on the Day of Judgment.
Wendell Winkler in his book Giving With a Purpose, a Promise, and a Performance illustrates this idea of working together by referring to the fact that the Empire State Building does not fall because every brick bears its own weight (44). We must all bear our own weight so that the Church of our Lord may stand strong and tall. Ask yourself the question, “If everyone in my local congregation gave in the same way that I give, what would be the result?” Would you have to let the preacher go, stop supporting those on mission fields, and close the doors because the light bill couldn’t be paid? Or would you be able to support more missionaries, give the preacher a raise, and reach out to the community in ways that your congregation never has before? We must not allow our brethren to fight the good fight and go to war alone. We must carry our own fair share of the burden of the cross of Christ. We owe that to God, and we owe that to our brethren.

WYTI Links: 06.26.2007

I'm doing these a little early...I will be moving stuff throughout the day.

• The High Cost of Being Fat (via Get Rich Slowly)
  
• 73 Great Debt Elimination Tips (via Zen Habits)
• There Is No Such Thing as a Budget Failure Interesting idea here. Applicable to us as individuals/families OR a church budget. (via Not Made of Money)
• And just for fun...How to Clean a Coffee Maker (via WikiHow)
  

WYTI Links: 06.25.2007

I'm glad to be back from a week in Ohio--although I'm not sure a youth trip could have possibly went better than this one did (I was gonna post from the hotel, but the wireless network was down. That's not necessarily a bad thing, though.).

Here are some Monday links:

• How to Start a Roth IRA (and Where to Do It) Planning for retirement personally is an absolute must for a preacher. This might be the best summary of the Roth IRA option (one of several options). Personally, I anticipate opening a Roth IRA in the next several months. (via Get Rich Slowly)
  
• What to Discuss Before You Get Married Might be helpful in your "Marriage Counseling" file. (via Dual Incomes No Kids)
• Ten Things to Do When You Move Into a New Home This is self-driven; Lord willing, we should be in the preacher's house by the end of the week. (via The Simple Dollar)
• Mom and Dad, Your Financial Decisions Matter Financial stewardship is certainly one of those areas parents are expected to train their children. (via Wisebread)
• And in honor of the release of the iPhone next week...Apple's New iPhone (via The Onion)
  

Gas $$ Saving Tip #17

Our final week in this series begins with a tip that I see broken nearly every time I go on a longer trip--especially if I go on interstate highways.

Remove Anything that Causes Drag. While there are times that certain items have to be attached to a vehicle, some leave items on a car or van even when not in use, and they cause drag. The more drag, the less gas mileage.

Some of these items include ski holders, bike racks, luggage racks and canoe/kayak carriers. Another that is often not thought about is a vinyl top over the front of the vehicle. Vinyl "catches" air more easily than metal, thus producing drag.

If you don't need these items for a certain trip, remove them from your vehicle and you'll greatly increase your miles per gallon.

Maternity Insurance: Is It REALLY Worth It?

Having a child can be quite expensive. The average cost of a birth is $8,000-$10,000 nationwide. Is it really worth it to purchase maternity insurance? Consider the factors.

Cost of Premiums - Our Maternity Rider costs $230.02 per month, or $2,760.24 per year ($27,602.40 over 10 years).

Cost of Premiums + Deductible in Use - Assuming that the maternity rider is kept in place for 10 years, and used for two births, the deductible and coinsurance each time would be $2,750 for our insurance plan. Total cost over ten years - $33,102.40.

Expenses in Need Without Maternity Rider - The average birth costs $8,000 to $10,000. Our standard health insurance covers complications of pregnancy, so the maternity rider isn't needed for C-sections, etc.

Ability to Pay Without Insurance - Without insurance, we would have to pay the bill over time, as would most people, though my understanding of medical bills is that no interest can be charged as long as you are making efforts to make timely payments.

Ability to Self-Insure - If you know how many children you plan to have and when, self-insuring may be possible. The factors below assume a monthly deposit or payment of $275.85 ($33,102.40/10/12) for ten years and assume a birth cost of $10,000.

• Example 1: Births at the end of years 5, 8, and 10. You could pay for all three births in cash. At the end of year 10, after paying for the final birth, you would be left with $8,951.62 in the account.
  
• Example 2: Births at the end of years 1, 3, and 8. You would not have enough in the account to pay for any of the births outright. At the end of year 10 you would be left with $3,600.57 in the account.
• Example 3: Things don't always go according to plan. Births at the end of years 1, 3, 7, and an unexpected birth at the end of year 10. At the end of the 10 years you would be left with a bill for $6,640. With insurance, you would have paid $38,602.40 over that 10 years, instead you will be paying $40,000.
• Example 4: Two planned births. Births at the end of year 4 and 7. You could pay for both births in cash, and be left with $17,729.72 in your account at the end of year ten, paying $20,000 instead of $33,102.40 and getting interest for the difference!
  
• You'll have to do the calculations yourself based upon the cost of your maternity rider and when you plan to have children. But don't forget - things don't always go nearly according to plan. The ability to self-insure is there if you have time to build an account up before it is needed.
  

Return in Payment vs. Premiums Paid In - Based on the information above, most people who keep this type of maternity coverage will pay in more than they receive in return, and quite a bit more.

Other Considerations - Nearly a million full-term newborn babies are placed in a nursery or observation for an average of 3 days, at $2,000 per day ($6,000 extra). You should check your insurance policy, but a maternity rider may be required to ensure that newborns are added to the policy from birth. With some plans a newborn will be considered for coverage only after reviews from their two-month check-up. This factor could quite easily change the value of the maternity rider if it is required to make the nursery care above, any illness and immunizations of newborns, and doctors visits for newborns all covered from their day of birth.

Conclusion - Maternity insurance is a toss-up. If your newborn will be covered from birth without it, you are going to have to pay high premiums for the rider out of your own pocket, and you don't plan to have several children in a short period of time, it could quite easily be more costly than it is worth. If the lack of maternity insurance will cause the pregnancy to be a stressful time for you, or you believe you can carry it for a short period of time, and if it is provided by your work or at a discounted price, it could quite easily be worth what it costs. You'll have to weigh the issues individually to consider if maternity insurance is REALLY worth it.

The Envelopes: What We Use Them For

Yesterday, we posted a brief article with a link to Dave Ramsey's website. If you have not read that post (The Envelope System: A Brief Introduction), please scroll down and do so before reading this.


So, what goes in those envelopes? Here's a solid answer: it depends.


Wow, aren't you glad you read this post?


Seriously, it all depends on what you want to put in the envelopes. My wife and I probably have more envelopes than many families, but we have a good reason. We would rather the money for certain expenses build up in an envelope that is earmarked for a certain item than be "spendable money" in our checking account. Keep in mind that we are serious about getting out of debt. If there is money in our checking account, we're very likely to spend it on our next debt. Then what happens when it comes time for an oil change? Uh oh!


Here are the items for which we have envelopes:

• Groceries and other "regular" items. We include diapers, formula, cleaning supplies and toiletries in this envelope because we buy all these things at the same stores. We also put coupons in this envelope.


• Life Insurance. We pay every six months, and our premium is low, but we still like having the cash available. We just put a small amount in an envelope each month and then, in June and December, there it is!


• Eating Out. We don't eat out anywhere near as much as we did before we starting using an envelope for this item. Admittedly, this is the envelope we "cheat" on the most, but we are also improving here. We basically put enough money in this envelope for 1 "sit-down" dinner and 2 fast food meals each month.


• Hair Cuts. Neither one of us spends much on hair cuts (which is an advantage we have over many families financially!), but the money still needs to be available when the hair needs a trim.


• Termite Bond. This is the type of expense that can creep up on you and kill your budget. We don't pay monthly on this, but it isn't cheap when the bill comes due. Much like life insurance, we like having the money there in cash when we need it.


• Dry Cleaning. We don't do a lot of dry cleaning, but, well, I'm a preacher, so those suits and sports coats have to be cleaned. This is a very small amount of money, but it's always available in our envelope.


• Car Maintenance. This is, by far, the hardest envelope to figure out. We make sure to have enough in there for oil changes, new air filters, etc., but what about those "big" things, like when the transmission fails? You can't budget for those things. The best piece of advice I can give it to use the money in the envelope for regular maintenance, then just know that there will be other, bigger, stuff happen. This is one thing your emergency fund is for, if needed.


• Birthdays/Gifts. We are lucky. Our family doesn't "overspend" on birthdays, but we do have several. These need to be budgeted. Also, we have baby and wedding showers and anniversaries to think about. And, yes, this money should be enough to pay for both the gifts and the cards. Don't let Hallmark break your budget.


• Christmas. We budget for Christmas year round! We put away a little each month in an envelope, then, when it's time to shop (after Thanksgiving, Amber), we have plenty of money to get everyone a nice, but not-too-fancy, present.

I told you that we had several envelopes. Many people choose not to have so many, but we have this many to protect us from..."us!"

What items do you budget with envelopes, and why?

Gas $$ Saving Tip #16

This tip was one that always confused me, because I never knew which one to do. I still mess up and do the wrong one. I don't make the mistake intentionally, but I do mess up.

Today's tip is Don't Idle for Too Long, but also Don't Start and Stop the Engine Excessively. When we first start driving, our parents/guardians get on to us for this all the time. "Don't let the car just idle." Then, though, when you turn off the car: "Well, you're going to have to start it again in a minute. You might as well have left it running!"

I was always so confused.

A good rule of thumb is to set a time limit for idling. If you are going to be stopped for more than, say, 2 minutes, shut off the car. Any less than that, let the car run.

There are all kinds of mathematical formulas you can actually use to figure our what's best. You may not be able to tell it from this series of posts, but I'm not THAT worried about 1 ounce of gasoline! However, I don't want to let my car idle for 10 minutes; I also don't want to start and stop it in 15 seconds.

The main thing is to think ahead. How long will you be sitting still? If it's a very short time, let the car run. If you aren't sure (like taking a cake to an elderly person, for example), it's probably best to turn off the car.

Now, I know what you're saying. You're saying, "I sure wish I had the other tips for this week right here in one convenient link list." Well, you get what you ask for! Here are the other four tips for this week.

Monday: Tip #12

Tuesday: Tip #13

Wednesday: Tip #14

Thursday: Tip #15

Next week, Lord willing, we will finish this series with 5 more tips. Then, on Friday, we will have links to all 21 tips you can use to help save dollars at the gas tank.

The Envelope System: A Brief Introduction

Tomorrow I plan on posting our family's list of items we pay for out of our envelope system. I would ask that you please be ready to comment on that article with additions or subtractions from your family.

Some of you, however, may not be familiar with this system. It is very basic and the name basically implies exactly what it is. However, if you are not familiar with this system, please take a moment and read this link from Dave Ramsey's website.

When done properly, this system really works. It may not be a perfect solution, but, if you budget well, it is a great addition to your financial lifestyle.

Gas $$ Saving Tip #15

I was guilty of not following this tip for awhile, and, when I changed, I really did see a difference.

Today's tip is Don't Pack Heavy Stuff. Many times we load down the trunks of our cars or the beds of our trucks with stuff and drive around. The heavier the stuff, the less miles per gallon we get.

For several months, I had about 5 garbage bags full of old clothes in my trunk. We put them there so we could go through them piece by piece without having garbage bags in the house. When we finally did go through them and I got rid of the bags, my gas mileage improved noticeably.

The weight issue also comes in to play in the Winter. While they may remind you of cold weather, knock off those icicles. They will kill your gas mileage!

What Your Checkbook Says About You

What does your checkbook say about you? Chances are that if you are reading this book you believe that you are a Christian who has given his/her heart totally to our Lord and Savior Jesus Christ. Probably everyone can easily pass that spoken test because it is simply a question of what do you say about your relationship with Christ. I pray that each of us passes that spoken test every day, but have you ever put your level of commitment to the checkbook test? It is a very simple and easy to complete test that will instantly tell you how devoted you are to the cause of Jesus Christ. All you have to do is open up you checkbook and write down on a separate piece of paper the amount of your weekly contribution to the work of the Lord’s Church. The test is now over. To grade yourself look at that number which you wrote down on the piece of paper and compare it to the amounts you spend on other things in your life on a weekly basis. Whatever that number is gives you a prime indicator of how devoted you are to Jesus Christ and His Church. This simple checkbook test is what Jesus told his followers about in Matthew 6:19-21 when he said, “Do not lay up for yourselves treasure upon earth, where moth and rust destroy, and where thieves break in and steal. But lay up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do no break in or steal; for where your treasure is, there will your heart be also.” You are as committed to Christ as your checkbook says you are.
What would you think about a man who proclaimed an undying love for his wife and children, but when he got paid he spent all his money on a boat for himself instead of buying clothes for his wife and shoes for his children? You might think a lot of things, but one of them would be that he didn’t really love his family. His checkbook simply would not support his claim. When Paul wrote to the Corinthians to encourage liberal giving for the contribution in 2 Corinthians 8 he said in verse 8, “I am not speaking this as a command, but as proving through the earnestness of others the sincerity of your love also.” (Emphasis mine, W.H.) To paraphrase, Paul told them that he knew they proclaimed to love the Lord, so he was giving them an opportunity to prove their love by putting their money where their mouth was. Every time that collection plate is passed on the first day of the week we each have an opportunity to prove the sincerity of our love by putting our money where our mouths are.
When my wife and I were dating I didn’t have a lot of money, but what I did have I spent mostly on her. I bought flowers, clothes, meals, movie tickets, etc. Every birthday or holiday was a day for which I would plan months ahead what I wanted to get for her. Why did I and every other boy trying to win the hand of a girl do that? She had my heart wrapped around her little finger. Wherever you find the heart, you will find a man placing his treasures there. I wanted to prove the “sincerity of my love.” No one ever doubted for a minute how I felt about Shelley Simmons. In contrast, think about the young man who does not have his heart wrapped around the finger of that special someone. He can take all of this money and buy a nicer car or finer clothes for himself because he is not trying to demonstrate his love for someone. I want the whole world and God to never doubt that He has my heart and that I am head over heals in love with Him.
How did you do on that checkbook test? I remember in school how, when I would get an A on a test, I would proudly lay that paper on my desk for the entire world to see, but when I got a bad grade I was so ashamed that I would hide that paper. Some people need to be ashamed of how much they give. Wendell Winkler tells of a little boy who, seeing the collection plate getting closer and closer, also saw a well dressed woman next to him not making a move to give anything. The boy said to the woman, “Here lady, you give my nickel and I’ll crawl under the seat.” If you feel a need to crawl under the seat, the great thing is that you can take the test again next week. Just like the student who must go back and study harder, you must make some changes in your giving if you are to pass the checkbook exam next week. Don’t be a Christian who just talks about how much he loves the Lord. Put your money where your mouth is and “prove the sincerity of your faith.”

Every Paycheck Counts for Something

I hate to budget, but I know it is necessary to keep me on track. My wife could, most likely, stay on course without a written budget, but I could not.

We are trying a system this month for the first time, and it is working beautifully. We have our budget, but we have added another side to the plan that my wife especially loves.

Each paycheck serves a specific purpose. While we already know we are going to have to tweak the system a little, here is what we have each check earmarked for:

• Week 1: Giving to the Lord, saving for estimated taxes, envelope money for the entire month, our loan at the bank for our adoption (has to be paid by the 10th of each month)


• Week 2: Giving to the Lord, saving for estimated taxes, car payment (due by the 16th), electric bill, water bill, pest control bill, DirecTV bill


• Week 3: Giving to the Lord, saving for estimated taxes, debt reduction


• Week 4: Giving to the Lord, saving for estimated taxes, house payment for the next month (due on the 1st)

Notice a couple of things.

First, notice that "giving" is the first thing from each paycheck. Wes is writing articles with that theme on this blog and will have more in the future, but we, as Christians, understand that God and His work come first!

Next, notice that our envelope money all comes out at the very beginning. I am planning on writing another article specifying what we use our envelopes for by the end of the week. But, just here, notice that we have all our money for the month right from the start.

Finally, notice that nearly an entire paycheck is spent to get out of debt. Instead of paying what's left over at the end of each week, we have a huge amount earmarked for that purpose.

Now, a couple of points as we close:

• What if I don't get paid weekly? To be honest, that is an advantage with this system. However, many get paid every other week, or can choose to do so. If you do, you can still follow this system, you will just have to be a little more disciplined and make each check do more.


• What about savings for things other than taxes? We are still reducing debt. We have some savings for emergencies, but we are not worried about building up a huge retirement account yet. You'll learn more about the reasons why when I begin to review Dave Ramsey's The Total Money Makeover in the next couple of days.


• What if there is another paycheck? I get paid every Wednesday (making today "payday," yeah!!!), and some months have 5 Wednesdays (August will be the next month where this happens). In those months, weeks 3 AND 4 are both used for giving, saving and debt reduction, and week 5 becomes our house payment for the following month.

As I mentioned, the plan still needs some tweaking, and our "order" would not work for everyone, but we both love this plan and it makes budgeting much easier.

Health Insurance: Is It REALLY Worth It?

Let's consider health insurance based upon the earlier suggested considerations. Sorry this one's so long! I've been working on it for a couple of weeks now, and now it's difficult to edit it down much more.

Cost of Premiums
The cost of health insurance premiums constantly rise due to inflation and individually as we age. Through the health insurance provider I currently use, an extremely healthy single male will pay $76,935.60 in premiums from age 20-64 for health insurance with a $750 deductible. For a couple who has children at home from ages 25-49, and continues with health insurance coverage until age 64, they will pay $192,020.40 in premiums for the family throughout those years.

Cost of Insurance & Deductible in case of Use
How much will it cost to be hospitalized, with or without insurance (based upon nationwide average costs)?

• Hospitalized for acute bronchitis - average charge: $9,888, but with my health insurance I would stand to pay $750 + 20% (up to $2,000), or $2,577.60, saving $7,310.40.
• Hospitalized for pneumonia - average charge: $21,388. With my insurance I would pay $2,750, saving $18,638.
• Hospitalized for a crushing/internal injury - average charge: $42,514. With my insurance, I would pay $2,750, saving $39,764.
• Now for a real example. I have a relative who recently was in a car wreck at 70 mph. He was life-flighted to a hospital, but luckily his injuries were limited to a broken femur and a cut artery on his head. They placed a titanium rod in his leg, stitched up the artery, placed him in the trauma center overnight. The next day he was in a regular room, and the fourth day after the wreck he went home (short stay!). Two weeks later he was back to work. Luckily, my relative had insurance. The average cost of a life-flight is around $10,000. The insurance company would only cover $2,000. The bills for the rest of the hospital stay were over $56,000. With his high-deductible insurance, having to pay the bulk of the life-flight, and with co-insurance he will probably have to pay around $12,000. That's much less than the over $66,000 he would have been facing otherwise! That difference will pay for many years of health insurance!
  

What about doctor's visits? Consider three of our doctor's visits from this past year.

• The first doctor's visit plus the blood and other tests were billed at $355. The insurance company allowed $163.66 of this, of which my part was $56.36.
• The second doctor's visit was billed at $177. Our co-pay, $30.
• The third doctor's visit with blood work was billed at $128, of which the insurance company allowed $83.32, of which we paid $50.77.
• With insurance we paid $137.13 for the three visits, instead of $660, saving $522.87.
  

What about prescriptions?

• With one monthly prescription at $50/month, with insurance we pay the first $250 of prescriptions and then 50%. With insurance we would pay $425 per year on this prescription instead of $600, a savings of $175. This doesn't take into consideration the amount saved on the prescriptions which went along with the doctors' visits.

This past year, we spent $562.13 above the cost of insurance (a total of $2,013.17 for health care). Without insurance, these same things would cost us $1,260. The cost of the insurance above the benefits it provided for this past year was actually $753.17.

Expenses in Need Without Insurance
This of course varies with what need or claim is being made. Our past year's health bill without insurance would have been $1,260. That's the health bill with just one prescription, three doctor's visits, and nothing nearly serious. That also doesn't include any physicals. Insurance would cover a physical up to $500 (for each of us) without any copay. Paying for our health needs without insurance is expensive.

Ability to Pay Without Insurance
Most people, including us, would be unable to easily pay for the cost of health care without insurance and without saving extra money just for that purpose. Especially if we were hospitalized or became seriously ill like my relative.

Ability to Self Insure
If we invested the amount we would otherwise spend on insurance (this year, $2,013.17), and paid out of the account for the cost of health care, this past year we would have invested a net of $753.17. Over 10 years, that amount invested at 5% would yield $116,953.95, which would cover the average cost of any of the top 259 causes of hospitalization. However, this type of investment would require us staying in extremely good health for several years to build such a fund. Self-insuring is mathematically possible, if we stay as healthy as the normal person and don't have any major health concerns in the next 10 years. However, I don't recommend self insuring because there is no guarantee that you will not have a major health concern for several years to build a fund. My relative in the car wreck was just 20. If he had begun building a self-insure fund two years ago, it would have been much too small to pay the bills. Additionally, if you become sick with an illness (such as a heart attack), not only will your self-insure fund be able to pay for the costs, but your illness would then be excluded from insurance coverage for several years or the rest of your life once you did get insurance! That's a dangerous risk.

Return of Payments vs. Premiums Paid In
It is very possible, feasible, and likely that we will pay in much more in premiums than we ever receive in return of payments. If one becomes seriously ill, this balance could easily shift in the other direction. Our health insurance has a lifetime payout maximum of $2 million - much more than we will pay in premiums.

Other Considerations
1 in 8 women is diagnosed with breast cancer at some time in their life and 1 in 6 men with prostate cancer. 1 in 3 adults get the flu every year, which would of course cause the health bills that year to be more with extra doctor's visits. Each year 114,000 Americans get sick enough from the flu to be hospitalized for it. With the possibility of major health problems, the unlikelihood of self-insuring, and the extra stress, insurance looks pretty good.
Additionally, many jobs provide health insurance, and pay very little more if insurance coverage is declined. In those cases, considering all of these factors, it would be foolish to decline health coverage.

Conclusion
Based upon these considerations, I believe health insurance is really worth it. It provides protection to possibly cover extremely expensive health care. Health care is one type of insurance I deem worthwhile, especially if your workplace provides health care, or provides it at a discounted rate.

Note: costs of health care gained through this site.

Gas $$ Savings Tip #14

As the temperature here in Alabama continues to plummet (all the way into the low 90s), I thought today's tip might be of some help. Okay, so the tip is actually for the Winter months, but it's one to file away, because a lot of people (me included many times) make this mistake and use up a lot of gas unnecessarily.

Today's tip is: Avoid Excessive Warming Up of the Engine on Cold Days.

You see those people every morning that the temperature is below 40, turning on their car for 10-15 minutes to "warm it up." Usually what they are doing is letting the defroster clear their windshield instead of doing so by hand.

Back to the engine, though. If you have a regular vehicle (car, truck, van, SUV), the engine only needs about 30 seconds to 1 minute to warm up, unless the temperature is insanely cold.

And, remember, when you are letting that car run for a long time, you are getting exactly 0 miles to the gallon!

Gas $$ Saving Tip #13

Today's tip is one that doesn't apply to me at this point, but I have read several articles around the 'net by those who say it really does add up.

If You are a Member, Buy Gas at a Discount Club, such as Sam's or Costco. Most of these clubs now have a gas station out front, and many offer pretty significant discounts on gasoline for their members.

I said that this does not apply to me, and that is for one simple reason: I am not a member of one of these clubs. The closest to me is a Sam's Club, and it is about an hour away. And, add to that, it does not yet have a gas station.

Now a word of caution. Some other stores offer a discount if you carry their credit card. As much as I like saving money, I don't do this. More articles are coming on this subject, but my family does not carry a single credit card. We used to, and we "only" used it for gas. Yeah, right! That's why we don't get a "gas card." We know that, if we had one, we'd use the savings to buy a candy bar and soda with every fill-up.

LIFE Insurance: Is It Really Worth It?

Life insurance rates are based upon considering the statistical probability of a particular type of person dying. This is calculated based upon mortality tables, the individual's basic health information, size, age, place of residence, etc. I personally purchased $300,000 of term life insurance on a 30 year term. The cost for my policy is less than $30 per month. By the end of the 30 years, I will have paid in just over $10,000.

Let's put my life insurance policy to the scales, and consider it based upon the factors (see earlier post "Insurance: Is it REALLY Worth It? - Factors to Weigh" for a description of each of these seven factors).

• Cost of Premiums: About $10,000 for our 30 year term $300,000 policy on my life. However, the policy we purchased is a Return of Premium policy. This type of life insurance returns 100% of the premiums paid in, if those premiums are paid in for the entire length of the term (in our case, 30 years). With my return of premium plan, I am really paying much less than it seems. The cost to me is REALLY the interest I could be gaining on the premiums if they were invested, and inflation.
  
• Cost of Premiums + Deductible in Use: There is no deductible. The payout would be $300,000, regardless of how many premiums I have paid in. This means that if the policy paid out in the final month, the true return would be about $290,000 ($300,000 less the premiums paid in.
  
• Expenses If the Need Arises Without Insurance: With funerals averaging over $10,000, that would be the first expense. However, the life insurance policy is purchased to cover funeral expenses, and additionally allow my wife a grieving period before having to go to work, provide for our children's care and education, etc.
  
• Ability to Pay Without Insurance: At this point in life, there is no way I can provide the protection which life insurance would provide for my spouse. In the future, any protection my savings will provide can be supplemented through the protection of life insurance. A 30 year term purchased at this point and paid throughout that term provides protection for my wife and future children until after those children have reached adulthood and left home.
• Ability to Self Insure: If the premiums are invested at 10%, the $30 a month would build to $67,814.64 over the course of the 30 years. However, it would be within the 14th year before the self-insured account would reach $10,000. This means that the ability to self-insure is really non-existent.
  
• Return in Payment vs. Premiums Paid In: Unlike some types of insurance, life insurance always provides more protection then it costs.
• Other Considerations: The peace of knowing that if I die at any time over the next 30 years my wife and children will be provided for financially is worth a lot more than the interest and inflation. This type of insurance will remove unnecessary stress if I become ill or injured.
  

All in all, I believe life insurance is a good purchase for us...but you have to consider the factors for your own situation. The Simple Dollar has an article that might be interesting to those considering life insurance.

Insurance: Is it REALLY Worth It? - Factors to Weigh

In examining several types of insurance, I have come up with seven basic factors to consider in determining if a particular type of insurance is REALLY worth it. This list could probably be lengthened, but these are the factors which will be considered in my posts about whether a particular kind of insurance is REALLY worth it.

#1 - Cost of Premiums
First, the cost of the premiums should be added up over a period of time. Looking at the monthly premium isn't a very good way of considering the cost of insurance. Add these premiums up over at least a year, or if possible, over the lifespan of the insurance policy.

#2 - Cost of Premiums + Deductible In a Claim
In considering the cost of insurance, one also has to consider how much they will have to pay in the deductible if they have to use the insurance. This is especially important in making a comparison to self-insurance or expenses without insurance.

#3 - Expenses in a Claim Without Insurance
In the event that you have to make a claim, how much would this claim cost if you didn't have insurance? Without considering this cost, you really can't consider if insurance is worth it. In some types of insurance several different types of claims will have to be considered.

#4 - Ability to Pay Without Insurance
If you don't have insurance, based upon your level of income and savings, would you be able to pay for the claim without insurance?

#5 - Ability to Self-Insure
Based upon the costs above, if the money is invested at a moderate rate with high liquidity (5% for my examples), would you be able to provide this insurance for yourself? That is, can you invest the premiums instead of paying them, and then pay out of the account in the event of a claim? How much less protection does this provide?

#6 - Return in Payment vs. Premiums Paid In
In the event of a claim, how much will you receive in returns from the insurance company in comparison to the premiums you have paid in. Is this difference really worth the risk that you will never make a claim?

#7 - Other Considerations
Other considerations may include the stress with or without insurance, your past history or family's history in this area, and many other factors unique to the type of insurance.

These factors will be considered now in several different types of insurance.

Product Review: ING Orange Savings Account

When you read other financial blogs and websites (okay, so you only read this one, I'm sure!), this product is the one you will see most often for online banking.

The ING Orange Savings account has several advantages that make it a great place to put money for an emergency fund (or, if you like online banking, your regular savings account).

1. It is FDIC insured up to $100,000.

2. The interest rate is first-rate (averaging around 5%).

3. Unlike some other decent places for an emergency fund, the Orange account does not have a minimum to get the interest rate. By way of contrast, some money market accounts have good rates for an emergency fund (3% or higher), but you must have a certain amount (usually $1000) in the account to get ANY interest. That is how they offer the good rates. ING's Orange Account gives the rate to all customers. So if you can just start an emergency fund with $100, you will still get something in interest.

4. Their site is quite easy to use. You don't have to be a computer geek to figure out how to use their online banking service.

For more information, including a short (and decently informative) demo video, click here.

And, by the way, if you decide to use this product for your emergency fund, set up takes about 5 minutes.

Where Wealth Comes From

American society is built upon the idea that anyone can accomplish anything if he is willing to work hard enough for it. Indeed it is a biblical principle that the harder one works the more that person will receive (Proverbs 13:11), but we seem to have to taken that principal to an extreme that says, “since I worked so hard for what I have no one deserves the right to tell me what to do with it.” What we so often fail to remember is that God is the One who gave us the ability to make money. In Deuteronomy chapter eight, Moses is warning the people about not becoming arrogant in themselves and forgetting God when He blesses them. Moses says in verses 17-18, “then you say in your heart, ‘My power and the might of my hand have gained me this wealth.’ And you shall remember the Lord your God, for it is He who gives you the power to get wealth,...” We are to work hard in this life, but always remember that it is God who gives us the ability to work hard. If you make your living as a public speaker, God is the one who gave you the ability to speak. If you are a steelworker, God is the one who gave you the ability to do your job. If you work with numbers, God gave you that ability. Truly, all that we have has come from the Lord and ultimately belongs to Him. Never forget to give the Lord the glory for all you have been given.

Gas $$ Saving Tip #12

Today's tip is one of my favorites, and it's one I can actually say I practice whenever possible (maybe that's why I like it so much).

Don't Stop If You Can Avoid It.

What does that mean?

You know how most people drive. We are rolling along on a highway at 65 miles per hour and then we see that sign: stoplight ahead. So what do we do? If we are like most people, we keep rolling along at 65 mph until the last moment and then we skid to a stop.

Why not touch the brakes, slow down a bit and keep rolling until the light turns green? Then, when it does, remember another tip: don't jackrabbit. Accelerate intelligently.

You see, when you stop, you are getting exactly 0 miles to the gallon! And, coming to a complete stop is harder on your mpg than slowing down reasonably.

So, while that guy in front of you screams right up to the light, you just take it easy...

...and, who knows, you may just pass him when he is stopped at the light and you are still rolling along. You may pass him at 25 miles per hour, but, hey, it's still a good feeling!

Insurance: Is it REALLY Worth It?

Insurance can become extremely expensive. Health insurance ranges from under $100 for an extremely healthy young person, to thousands of dollars per month for individuals with serious illnesses. Car insurance also has a wide range and even for a driver with a good driving record can cost several hundred dollars for full coverage insurance. Even lower levels of insurances that seem to be cheap can be quite costly when several factors are considered. With insurance currently costing so much, and with the rates of insurance only going higher and higher, a question that comes up is, “Is it worth it?” Off and on over coming posts, I'm going to be examining the question of the ‘worth’ of several different types of insurance.

Before examining specific types of insurance, I think it’s beneficial to consider how insurance works, that is to look at insurance from a purely statistical perspective. When an insurance company pays out to a client, they often loose money on that client. How do insurance companies not go broke? It's pretty simple really. They collect funds from a large group of people, invest those funds, and pay out to the few who qualify for distributions. Insurance is beneficial to many individuals because it provides them with protection they can not provide for themselves. It is profitable for the company because the average person will pay more in premiums (and the interest on those invested premiums) then they receive in payments. Therefore, mathematically and statistically, each of us would be better off without any insurance whatsoever. HOWEVER, IT IS BY NO MEANS MY SUGGESTION NOR MY LIFESTYLE TO LIVE WITHOUT ANY INSURANCE.

Those who purchase insurance do not purchase insurance because they plan to be the average person who pays in more than they receive in benefits. Nor do they plan to have a car accident or disease so they can get their money’s worth from the insurance company. They recognize that they may be the one who isn’t average - they may face a situation which they cannot provide for, and so insurance provides protection in case that happens.

The question, “Insurance: Is it really worth it?” is therefore not entirely simple, nor is the answer the same for every individual. This is a question that must be asked and answered in each category by each individual. Over the next few posts, we’ll simply be examining some things to help answer this question in these areas.

Gas $$ Saving Tip #11

Today's tip will require some "outside reading," so we saved it for a Friday. The tip for today is actually a two-for-one special.

The first tip is Use the Lowest Octane Gasoline Your Car Can Handle. Some, because they have more expensive vehicles, feel as if they have to use premium gasoline. While you should, of course, check your owner's manual or the manufacturer's website, most cars can take regular gasoline. At most stations, that means a savings of 15-20 cents per gallon.

Now, can you take this a step further? Our second tip is one you need to decide for yourself, because it will take some math. It is Decide if Ethanol Blends are Right for You. To give you some help in figuring out the math, read the following article. It is from The Simple Dollar, and is called, "Ethanol Blends: Are They Worth It In Your Tank?"

What, you say? You want all the other tips for this week again? Okay, here they are:

Monday: Tip #7

Tuesday: Tip #8

Wednesday: Tip #9

Thursday: Tip #10

Eleven down, 10 to go. We hope these tips are helping you feel less pain at the pump.

Congrats to One of Our Own

Just a quick congratulatory note to one of our writers, Wes Hazel.

If you do not receive the Gospel Advocate, you are missing a lot of helpful information. However, if you did not receive the June issue, you missed an article written by Wes. The subject? Giving, of course!

This is the 2nd time in just a few months that brother Hazel has had an article published in the Gospel Advocate. Just thought our readers would like to know!

Congrats, Wes!

Gas $$ Saving Tip #10

Today's tip is one of my favorites. I think, like most Americans, I have a little lazy streak; so any tip that lets me be lazy and save money on gas--it's almost too good to be true.

Our tip for today: When travelling at highway speed, Use Cruise Control. It's not that using the cruise compared to not using it saves gas; it's that keeping a constant speed saves gasoline.

Cruise control helps keep you at a safe speed (if you set it at a safe speed!) and, if you are going a constant 55 or 65, you are being better on gas than if you are moving from 55 to 60 to 52 to...

And one more added bonus. If you set the cruise at a legal speed, you'll avoid spending money on tickets!

WYTI Links: 06.14.2007

An Easy Way to Make Debt Disappear More Quickly...(via The Simple Dollar) Notice how the math adds up over time. Very helpful tip for reducing debt.

102 Personal Finance Tips Your Professor Never Taught You (via Ask the Advisor)

How to Avoid Being Audited When You Are Self-Employed (via Ask the Advisor) Helpful suggestions since most preachers and paid-ministers are considered self-employed for tax purposes.

WYTI Links: 06.13.07

Massive Personal Finance Resource List (via The Frugal Law Student) One word; two syllables: Jackpot.

10 Tips for Dealing with Car Salesmen (via Generation X Finance)

Confessions of a Former Circuit City Worker (via Consumerist)

Money Savvy Pig: The Piggy Bank for the 21st Century (via Money Savvy Generation) This looks quite cool...check out reviews at The Simple Dollar and Get Rich Slowly. Pig available in five colors; also available as a cow or football. Hmmm...do you have to be a kid to have a piggy bank?

Gas $$ Saving Tip #9

Wow, it is ever hot! Here in Alabama, we are expected to be in the mid-90s every day this week and there is about a negative-10% chance of rain. (Okay, so it's a bit better than that, but not much.) So today's tip may seem like one that comes straight from the torture chamber, but it will help.

Use the A/C Sparingly.

We often run the air-conditioner at full blast nearly year-round, only turning it off when it is extremely cold. We need to learn to use the A/C only when it is absolutely necessary. Depending on who you read, the A/C can reduce your miles per gallon by 3-10%. Even if it is just 3% that can be a significant amount, especially on a long trip.

So, how can you avoid using the A/C all the time? Here are a couple of ways:

1. On short trips (to the store, to work, etc.) when you will be going more slowly (in-town driving), roll down the windows. If you are driving at highway speed, this also reduced your miles per gallon, but at speeds lower than 45 mph, it is better than running the A/C.

2. If you must have the A/C (like I do this week!), run it until the car is comfortable, then turn it off. Yes, the car will get hotter, but not in just a few seconds. You can usually stand it for a few minutes. If you must have it blowing, turn it on "vent."

This tip is easier to follow in the Spring and Fall, of course, but can be used year-round to save a few dollars on gas.

Product Review: HSBC Online Savings

Okay, so you're finally ready to get out of debt. Good for you! Just admitting that is a major step in the right direction.

As you begin your journey, though, something happens. You have to stay in the hospital for a week. Your brakes go out. You find out you need a new roof. These are major expenses that can ruin a financial plan...

...unless you have money set aside for emergencies.

We'll have more to say about emergency funds on this site in the future, but one thing you must decide is where that money is going to go. It needs to be liquid enough so you can get to it in an emergency, but you don't want to make 1% or less on the money either.

One possible place is HSBC's Online Savings Account. Personally, I don't use this one, but I am thinking about it. While interest rates change often, today (June 12) the account is at 5.05%. I'm willing to say that's probably more than you are making at your local bank!

The account has many good features. One of my favorites is free electronic transfer of money. Also, the account comes with a debit card, so getting to your cash in a real emergency is possible.

As with any account, please take the time to look over the information and choose the one that is right for your situation. If you don't see a feature that you'd like to have, send a question to the company.

There are many good places to put money for an emergency fund, and we hope to highlight some of the best here over the next few days, but HSBC has a good history of online banking. Check them out for more information...

...but more importantly, get started on that emergency fund!!!

HSBC Online Savings Account information page

Gas $$ Saving Tip #8

Talk about "preaching to the choir." Today's tip is one that I really (really, really...) need to work on. It goes to the actual driving process.

Don't Jackrabbit.

What does it mean to "jackrabbit"? It's when you come close to a stop sign or light and hit the brakes hard. Then when it's your turn or the light turns green, you press the gas pedal really hard.

You see, when you are accelerating or braking really hard, you are wasting a tremendous amount of gas. Many hybrid cars (and some others) tell how many miles per gallon you are getting at all times. If you watch those screens, you will notice that the mpg drops an amazing amount when you brake hard or pound on the gas pedal.

Again, this is "preaching to the choir." I always seem to be trying to beat everyone off the line (in a Daewoo, no less). Slow down. Brake slowly. Accelerate slowly. Over time, you'll save a great amount of gasoline.

Saving Money in the Flower Garden

There are many ways to be frugal while working in the garden. Stacey has a flower bed in front of the house which she has really worked over, transforming it from a weed free-range to a beautiful display of different flowers. It may be a little late for these suggestions, but here are a few ways to be more financially wise while creating a flower bed.

First, consider purchasing flowers a little later in the year. Some of our flowers were purchased at the end of April, some in May, and some at the beginning of June. Those purchased at the beginning of June were much cheaper. They looked a little worse when we first bought them, but our daily watering routine brought out the best in them very quickly.

Second, look for ways to reuse the waste. Stacey had to dig up entirely one section to get rid of a vine that was taking over her flowers. We purchased top soil to go fill in the area. The dirt we had dug up with the vine in it was used in our backyard to fill the holes our dog had dug.

Third, purchase dirt wisely. Sounds crazy, I know. Last year I was filling some holes the dog had dug. Looking around inside Wal-Mart's garden section, I purchased the cheapest kind of soil I found - potting soil. It was over $6 for about a 40 pound bag. This year, we purchased topsoil from outside the store for less than $2 for each 40 pound bag. We supplemented this with plant food (about $6 a bottle) which lasts a long time and can be used on our indoor and outdoor plants.

There are other ways to be frugal in building a flower garden, but these are a few simple suggestions. (By the way, that is Stacey's flower bed in the picture:)

A Little Help from Our Readers

One of my responsibilities on this blog is to review financial books. Over the coming weeks and months, I will read several books that are well known (e.g., The Automatic Millionaire, The Total Money Makeover) and some that are less known in the general public.

I would like to give a chapter-by-chapter breakdown of the books, indicating both strong and weak points.

Here is where I need your help. Would you, as readers, like for me to write every few days about each chapter, or would you rather me write one (very) long post reviewing the entire book.

Personally, I am leaning towards a chapter-by-chapter review. However, if you would like the other, please indicate this. We want to do what is best for our readers. Please leave comments about your preference. Thanks!

Gas $$ Saving Tip #7

Another week, five more tips for saving you $$ at the gas station. Hopefully, you are using these tips to save money you can give to the Lord and invest in your family.

Today's tip: Buy Gas on Wednesday.

Even when gas prices are "steady" (there's a phrase you haven't heard in a while!), prices are likely to begin rising on Thursday, anticipating the coming weekend travelers. If there is a time in the week when prices will be lower, it will usually be on Wednesday.

If you are planning a weekend outing, do a little planning, and buy your gasoline before Thursday. More often than not, you'll save a few cents.

Please note that this tip is following the law of averages. Will there be weeks when you buy on Wednesday and then the price dips down? Of course, but most likely, the opposite will happen. Following this tip, over time, will save you on gas.

If you have comments on this tip, please feel free to leave them.

Gas $$ Saving Tip #6

Today’s tip is one that I am terrible about breaking. I do this constantly, even though I know I’m costing myself a few cents each time. I guess old habits die hard.

Today’s tip: don’t “top off” the tank excessively. If you continue to pump gas into your car, one of two things will happen. Either (1) you will end up spilling some down the side of your car and onto the ground, or (2) some will evaporate.

To help avoid these, let me add this bonus tip (hey, it’s Friday, right?): keep the gas cap fastened tightly.

If you are anything like me, you top off your tank to get to the next dollar (or 10 cents). One or two extra pumps are not any big deal, but, if you are at $29.10 and want to get to an even $30, you will waste a pretty good amount of gas. It’s better to just trust the automatic shut-off on the gas pump.

Now that you have read the first 6 tips, you should start seeing the possibility of saving a decent amount on your gasoline. We’ll take the weekend off, and then we will unveil another tip each day Monday through Friday for the rest of June. Add them all up, and you could really have some extra dollars around!

--Adam

Monday - Tip #2

Tuesday - Tip #3

Wednesday - Tip #4

Thursday - Tip #5

Friday - Tip #6

Gas $$ Saving Tip #5

Here’s a way to save money by getting infinite gas mileage: walk or ride a bike.

How many times do we drive our car around the block to visit our neighbors? When my family moved to Paducah, Kentucky, we had a neighbor who would drive the garbage cans to the street, and the driveway was, at most, about 150 feet long!

There are going to be several articles in the coming months and weeks about cheap ways to entertain your family, but why not walk to some of those things? In some ways, that can be as much fun as the actual activity!

If you live less than a mile from work, you might want to consider a bicycle. It may not be great on 100-degree days, but in the Fall and Spring you could save a fortune on gasoline; not to mention the health benefits.

So, the next time your neighbors invite you over for a BBQ, walk over to their place. You’ll enjoy the fresh air, and you’ll save all your gas money.

--Adam

Gas $$ Saving Tip #4

Today’s tip is a simple matter of science and math. This one may sound very cheap, but, as with our other tips, it adds up over time.

Buy gas when the temperature is cooler, such as early in the morning. No, the price isn’t cheaper, but you get more of the product for your money.

How, you ask? Gasoline “contracts” (for lack of a better, more scientific, word) in cooler weather and expands in warmer weather. That’s why, if you leave a gas can out on a hot day and don’t vent it, it will expand and, eventually, explode! (Remember that part of the make-up of gasoline is gaseous.)

What does all this matter? Remember that a gallon is unit of volume, not weight. When you get more of the product (in this case, gasoline) in less space, you are getting more for your money.

This tip won’t save you much each time you fill-er-up, but, over time, it will save you a lot. If you are going on a long trip, this could save you several dollars off your budget (can you say, Olive Garden instead of Hardee’s?)!

--Adam

The "Professional" Links

Here are three links to people/places that are involved in personal finance from a professional perspective:

-- Color of Money (Michelle Singletary, Washington Post) About two years ago, I subscribed to receive about 10 categories of e-mail updates from the Washington Post. It didn't take long for me to get aggravated at the abundance of e-mails. Now all I receive from the Post is "Breaking News" and "Color of Money" from Mrs. Singletary.

-- Kiplinger.com One of the standard personal finance resources. Also publish Kiplinger's Personal Finance magazine. A lot of their information is investment-driven (because that's what a lot of people want to read about), but they do probably have helpful information for whatever you're looking for. It just might take you a minute to find it.

-- Motley Fool This resource leans toward investment (especially the Stock Market) information most heavily on the front page, etc. It does have a long list of links on the left for personal finance interests though. It has the most comprehensive list of calculators that I've run across. You might not use the Fool as often as other sites, but it's worth keeping handy.

Color of Money
Kiplinger.com
Motley Fool

Gas $$ Saving Tip #3

I don’t know why this tip is so hard for me to follow, but it is! Today’s tip is combine trips. In other words, don’t:

• Go to work

• Go home

• Go to the bank

• Go home

• Go to your child’s ballgame

• Go home

• Go to Subway

• Go home

• Go get groceries

• Etc………

I live in a very small town, so those trips don’t add up a lot. But, if I do similar things two or three times each week, the extra driving (not to mention, starting and stopping the engine) will quickly add extra miles to my driving. And extra miles means extra gas! It’s better—and more timely—to take 10 or 15 minutes in the morning to plan out your day, making a list of all the places you need to be. It’s also worth an extra minute to plan the best route to those places, so you don’t backtrack. This is especially true if you live in a mid-sized to large city.

Just think, if you combined trips and it saved you an average of 3 miles per day, that’s over 1000 miles a year. If you get 20 miles per gallon, that’s 50 gallons of gas. If gas is $3 a gallon, you just saved yourself $150. Could you not retire a small personal loan or medical bill with that money?

--Adam

Filtered Air With a Warranty

Automobiles require regular scheduled maintenance. Besides changing the oil, another regular part of maintaining a car is changing the air filter. Changing the air filter is recommended every 15,000 miles. Alternatively, a K&N brand air filter may be purchased. The K&N air filters carry a 1 million mile warranty (lifetime warranty). They have to be cleaned and re-oiled approximately every 50,000 miles (at the cost of about $10), but never have to be replaced. This is possible because K&N air filters are made with layers of cotton gauze between aluminum screens. Traditional air filters are made with paper. Additionally, K&N air filters often give the car a 1-4 horsepower boost and can raise gas mileage, although a raise in gas mileage depends on many factors (see their website).

Traditional air filters begin just over $5 and go up from there. The price of K&N air filters depends upon the make and model of the car, but generally cost up to $50. A few examples:

• 1996 Mazda Protege (my car) - Traditional Filter $10.50; K&N $26.96
• 2002 Toyota Camry - Traditional Filter $10.49; K&N $47.99
• 2007 Ford F-150 - Traditional Filter $17.99; K&N $51.99

In 105,000 miles, a traditional filter will have to be replaced for the seventh time. The K&N filter will be cleaned twice. By this point, a K&N air filter would save the Protege owner $26.56; the Camry owner $5.46; and the F-150 owner $53.96. Obviously, the savings of the K&N filter depends upon what type of car you drive and how many miles you expect to keep the car for. For my car, the savings are enough to be worth purchasing the K&N filter - especially considering how cheap it is for my Protege. Do the math, the K&N filter might save you enough to offset the upfront cost, especially when you consider that it will probably give you a small rise in gas mileage, and that it will save you time. You can check K&N's website to learn about the features and details of the K&N filter. Additionally, prices of filters for your vehicle can be checked at Advance Auto Parts website, Autozone's website, O'Reilly's Auto Parts, or at your local parts store. You might also be able to find the air filter you need at a discounted rate at eBay Motors. Note that I purchased my K&N filter today at Advance Auto Parts who were giving 25% off on all air filters (not air-intake systems though). The sale price isn't advertised on their website, though. So check your local store to possibly save even more than the website shows.

So, today's frugality tip - consider upgrading your car's air filter to a K&N performance filter with a lifetime warranty.