Well, my most recent paycheck had a solicited and unsolicited addition to my salary. The solicited one was a small bonus paid by my company. The unsolicited one was the federal government trying to get me to simulate the economy. The difficulty is trying to decipher how much was the bonus and how much was the stimulus money. This is important as the money from each source is designated for a different purpose.
As I have discussed before, the stimulus money would help fund my Roth IRA for 2009. This is an ongoing stimulus that decreases the amount of federal tax I am paying to encourage me to spend a bit more than I normally do. I hope my index mutual funds appreciate it.
The bonus money would be added to my car savings account and the leftovers added to either my found money account (likely for a future computer purchase) or my farm savings account. After some calculations comparing my most recent check with the previous, I came up with a number for my bonus and used that to pad my car and farm savings accounts. The remainder was the economic stimulus money and was added into the spreadsheet for my Roth IRA funds. The next paycheck should confirm whether my calculations were accurate or not.
Now, how my taxes will fare next year, that is another question. Have any American readers seen the effects of the Obama stimulus plan in your own paycheck?
Showing posts with label car. Show all posts
Showing posts with label car. Show all posts
Sunday, March 15, 2009
Sunday, January 25, 2009
Financial rewards of credit card usage
I have been reading in various blogs about credit cards reducing the rewards associated with using their cards or raising the bar for submitting rewards. Others blog about which reward credit cards have the best return on the money you spend. I am a one credit card kind of gal so once I choose a credit card, I keep it in my wallet and use it. (Full disclosure: I do have a second card, but it languishes in a file folder.) My well-used card is a CitiBank Driver's Edge Options credit card, which rewards me with 3% back on purchases at pharmacies, gas stations and grocery stores (6% for the first 12 months), 1% on other purchases and if I submit my mileage, gives me a rebate for the mileage accumulated on my car. I can redeem my rewards for an auto service of at least $25 or for leasing or buying a new or used car. Since I knew I wanted to purchase a newer car in the near future, I thought this rewards card was a good fit for my lifestyle and suited my goals.
Recently, I sent my bill for auto repairs to the Rewards Redemption service for my credit card. If I am enrolled in the mileage rewards, which I am, that bill will also use the mileage noted on the bill to add the Driver's Rebate to my account. When I received my credit card bill about two months after submitting the auto repair bill, I saw I had a credit for my Driver's Edge rewards. I took the credited amount ($105.57) and transferred it to my car savings account. Why? All the other purchases on my credit car were subtracted from my budget, and this money was intended for my future car purchase. I put it in my ING savings account where it currently earns 2.4% APY. This may be a paltry amount, but better than 0% in my reward account.
Using this method of rewards submission, I add to my car savings account and make the rewards I earn by driving my current car more liquid than sitting as a number on my credit card statement. Furthermore, the Driver's Edge rewards must be used within five years so I am ensuring I use the full extent of my rewards without any penalty.
What do you think of my methodology?
Recently, I sent my bill for auto repairs to the Rewards Redemption service for my credit card. If I am enrolled in the mileage rewards, which I am, that bill will also use the mileage noted on the bill to add the Driver's Rebate to my account. When I received my credit card bill about two months after submitting the auto repair bill, I saw I had a credit for my Driver's Edge rewards. I took the credited amount ($105.57) and transferred it to my car savings account. Why? All the other purchases on my credit car were subtracted from my budget, and this money was intended for my future car purchase. I put it in my ING savings account where it currently earns 2.4% APY. This may be a paltry amount, but better than 0% in my reward account.
Using this method of rewards submission, I add to my car savings account and make the rewards I earn by driving my current car more liquid than sitting as a number on my credit card statement. Furthermore, the Driver's Edge rewards must be used within five years so I am ensuring I use the full extent of my rewards without any penalty.
What do you think of my methodology?
Thursday, July 17, 2008
Surprise at my last gas tank fillup
As noted previously, I carefully monitor the gas mileage on my car. Lately, the trend has been going down (from 32mpg to 30mpg to 28.5mpg to 25mpg). I am not sure what I did at the 25mpg fillup, but I did not think that I drove in the city that much.
My car is rated 26mpg for highway miles, which I drive at least 75% of the time. After seeing the 25mpg, I was wondering what I had been doing wrong. Can you guess what my next fillup gave me? A number I have never seen on my car. A number achieved by driving 55-65mph on the highway (depending on the speed limit, which I drive). That number: 35.7mpg, nearly 10mpg more than my car's rating and 3.5mpg higher than I have reached before. I had to do the calculation twice to make sure I was not introducing any errors.
Believe me, I will continue to drive at the speed limit to keep trying for these numbers. And I did it in a 1997 Dodge Stratus. Take that Toyota!
My car is rated 26mpg for highway miles, which I drive at least 75% of the time. After seeing the 25mpg, I was wondering what I had been doing wrong. Can you guess what my next fillup gave me? A number I have never seen on my car. A number achieved by driving 55-65mph on the highway (depending on the speed limit, which I drive). That number: 35.7mpg, nearly 10mpg more than my car's rating and 3.5mpg higher than I have reached before. I had to do the calculation twice to make sure I was not introducing any errors.
Believe me, I will continue to drive at the speed limit to keep trying for these numbers. And I did it in a 1997 Dodge Stratus. Take that Toyota!
Friday, July 4, 2008
Carpooling, here I come!
Last summer, my twice weekly carpooling came to an abrupt end when the man I was carpooling with left me stranded at work. I was angry about the situation and decided to just end the carpooling relationship rather than trying again. It had been nearly a year we had driven together without incident so I was hurt over this lapse. Not long after, gasoline began its meteoric rise, and I began seeking alternatives to driving every day. Currently, I have one work-at-home day every two weeks and have gained some extra money from work for a high speed internet connection at home. However, that still means every day I go to work, I have to drive.
Enter craigslist and its rideshare listing. I started looking at this section when a posting to my company-specific bulletin board yielding nothing. When I did not see anything that matched my criteria on craigslist, I posted an ad of my own seeking a carpooling partner part time. I found carpooling a couple days a week gave me some break in the pocketbook, and I drove one fewer day a week. So a part-time gig would work well for me. No one e-mailed, and so I was stymied.
Luckily, I kept looking at the rideshare listing and found someone from my town who would be going my way to work. We ended up corresponding via e-mail and did a test run. It worked out well for both of us. I get tired of driving myself everywhere and she preferred to drive. We settled on what I would pay her for driving me, I found my carpooling buddy easy to talk to and she knew people from my old high school!
While I wish I had access to public transit, I have found a substitution. Now I am looking forward to carpooling again with someone who prefers driving and does not mind me paying her for the opportunity to ride with her. Plus we are a little kinder to mother earth, extend the life of my car, and lessen the frustration for other drivers with less traffic on the road. A nice situation in which to be!
Enter craigslist and its rideshare listing. I started looking at this section when a posting to my company-specific bulletin board yielding nothing. When I did not see anything that matched my criteria on craigslist, I posted an ad of my own seeking a carpooling partner part time. I found carpooling a couple days a week gave me some break in the pocketbook, and I drove one fewer day a week. So a part-time gig would work well for me. No one e-mailed, and so I was stymied.
Luckily, I kept looking at the rideshare listing and found someone from my town who would be going my way to work. We ended up corresponding via e-mail and did a test run. It worked out well for both of us. I get tired of driving myself everywhere and she preferred to drive. We settled on what I would pay her for driving me, I found my carpooling buddy easy to talk to and she knew people from my old high school!
While I wish I had access to public transit, I have found a substitution. Now I am looking forward to carpooling again with someone who prefers driving and does not mind me paying her for the opportunity to ride with her. Plus we are a little kinder to mother earth, extend the life of my car, and lessen the frustration for other drivers with less traffic on the road. A nice situation in which to be!
Friday, May 30, 2008
Monitoring my gas mileage
I am one of those crazy people who writes down information to figure out miles per gallon (mpg) between fill ups. In fact, I have a notebook in my glove compartment that is dedicated to keeping track of date, gallons, miles, total cost and calculated miles per gallon. My notebook has been keeping track of this very important information since I purchased my car six years ago. Therefore, I have a good sense of the average miles per gallon depending on year, season and month. The number can determine my mood for the day, depending on the number seen. Calculating my mpg tells me if I am doing all I can to keep it high. A low number will cause me to consider my driving behavior or check a maintenance item I may have neglected like the amount of air in my tires.
Since my driving is primarily over 45 mph, I should get the higher mpg rating for my car. A low number (below 25 mpg) will remind me all those cold days or many city miles start to negatively affect my final calculation. A high number (over 29 mpg) tells me I am practicing good driving (smooth, gentle acceleration, coasting down hills and to stop signs, as well as staying at the speed limit). I also like to brag when I hit a rare number.
My car is rated 26 mpg for highway driving according to the EPA revised standards. This is not an impressive number in the face of increased gas prices and getting all the miles one can from a tankful (or half a tank as I prefer to keep mine at least half full). Therefore, a number like 32 mph is wonderful! That is the number I hit in the fill up today. I am thrilled that being more conservative in my driving (and more relaxed when I reach my destination) is good for my bottom line. Do you have any gas mileage benchmarks for yourself and do you calculate mpg every fill up?
Since my driving is primarily over 45 mph, I should get the higher mpg rating for my car. A low number (below 25 mpg) will remind me all those cold days or many city miles start to negatively affect my final calculation. A high number (over 29 mpg) tells me I am practicing good driving (smooth, gentle acceleration, coasting down hills and to stop signs, as well as staying at the speed limit). I also like to brag when I hit a rare number.
My car is rated 26 mpg for highway driving according to the EPA revised standards. This is not an impressive number in the face of increased gas prices and getting all the miles one can from a tankful (or half a tank as I prefer to keep mine at least half full). Therefore, a number like 32 mph is wonderful! That is the number I hit in the fill up today. I am thrilled that being more conservative in my driving (and more relaxed when I reach my destination) is good for my bottom line. Do you have any gas mileage benchmarks for yourself and do you calculate mpg every fill up?
Wednesday, May 14, 2008
My priorities for car shopping
Since I have some inkling my vehicle is not going to last as long as I would like, it behooves me to start looking sooner rather than later. My goal is to keep using my car until the repairs are cost prohibitive or I am concerned about its reliability. Currently, reliability is not an issue nor are repairs pressing. However, I cannot predict the future so I have decided to do my research now to be better prepared if my situation changes quickly.
What important features am I looking for?
My primary consideration is low gasoline consumption so I am looking for vehicles that rank in the top 10 of its model year for fuel efficiency. Since I use cruise control to help me maintain a steady speed, I require this in any new vehicle I purchase. While I might like the additional hauling capacity of a van or SUV, a car suits me better because the possibility of me hauling large pieces of furniture or drywall is low. I would prefer to purchase a two- to three-year-old used vehicle with low miles (50,000 or less) under warranty if possible. This way, I do not have the sharp depreciation of a new car, but still have many good years left in the vehicle.
What features add value to a vehicle purchase for me?
Both of the cars I have owned (and the car my parents let me borrow in college) had power windows and locks. I find these features convenient and useful since it is easy to raise and lower a window at the touch of a button even while driving. The Autostick ability (as Chrysler calls it) allows me to up- and downshift without a clutch, but my primary driving mode is automatic. The shifting is nice in winter or to lower my momentum down a hill as I head to a stop sign. As a shorter-than-average woman, power-adjustable seats work in my favor and can be changed at a touch of a button while driving if I need to move forward or back a bit. I lived without an inside trunk release with my previous car and did not like it so I would like my next car to have this feature.
What might I like to have if the option is available?
I would love to have a moon- or sunroof on my next car. Even a year ago, I was considering the power and sleekness of a Dodge Charger, but the gas mileage stinks on the modernized muscle car. A sunroof would be a bit of sportiness in an otherwise staid sedan. If possible, I would like to drive a green or blue car. My previous car was white and my current car is red, but I have wanted a blue- or green-colored vehicle for years. Purchasing a used vehicle means the car color depends on the previous owner so my options are more limited. A few more nice features: a place to put my iPod that does not take up a cup holder, leather interior and some nice tire rims.
Considering my lifestyle, my needs and my desires, I have come up with the above list of features for my next car. With fuel efficiency as the number one consideration, the Toyota Corolla and Volkswagon Jetta come up as top picks. Despite the items on my list, I still have to like how my car looks, hence the two models mentioned. I would prefer domestic cars, but Toyota, Honda and Volkswagon rank in the top five for fuel efficiency per Edmunds.com. I still need to research total cost of ownership (I was told VWs tend to cost more to fix as parts are more expensive), but with these basic features, I am ready to move on to the next step--driving the likely choices.
A Toyota Corolla may hit all my important features and even some of my desired ones, but if it makes me feel squished or I do not like the road noise, this is not a model I will consider for purchase. I realize compromises will need to be made when I buy my next car. Test driving some of the likely candidates will give me real-world experience and help solidify my decision or introduce me to new possibilities.
What important features am I looking for?
My primary consideration is low gasoline consumption so I am looking for vehicles that rank in the top 10 of its model year for fuel efficiency. Since I use cruise control to help me maintain a steady speed, I require this in any new vehicle I purchase. While I might like the additional hauling capacity of a van or SUV, a car suits me better because the possibility of me hauling large pieces of furniture or drywall is low. I would prefer to purchase a two- to three-year-old used vehicle with low miles (50,000 or less) under warranty if possible. This way, I do not have the sharp depreciation of a new car, but still have many good years left in the vehicle.
What features add value to a vehicle purchase for me?
Both of the cars I have owned (and the car my parents let me borrow in college) had power windows and locks. I find these features convenient and useful since it is easy to raise and lower a window at the touch of a button even while driving. The Autostick ability (as Chrysler calls it) allows me to up- and downshift without a clutch, but my primary driving mode is automatic. The shifting is nice in winter or to lower my momentum down a hill as I head to a stop sign. As a shorter-than-average woman, power-adjustable seats work in my favor and can be changed at a touch of a button while driving if I need to move forward or back a bit. I lived without an inside trunk release with my previous car and did not like it so I would like my next car to have this feature.
What might I like to have if the option is available?
I would love to have a moon- or sunroof on my next car. Even a year ago, I was considering the power and sleekness of a Dodge Charger, but the gas mileage stinks on the modernized muscle car. A sunroof would be a bit of sportiness in an otherwise staid sedan. If possible, I would like to drive a green or blue car. My previous car was white and my current car is red, but I have wanted a blue- or green-colored vehicle for years. Purchasing a used vehicle means the car color depends on the previous owner so my options are more limited. A few more nice features: a place to put my iPod that does not take up a cup holder, leather interior and some nice tire rims.
Considering my lifestyle, my needs and my desires, I have come up with the above list of features for my next car. With fuel efficiency as the number one consideration, the Toyota Corolla and Volkswagon Jetta come up as top picks. Despite the items on my list, I still have to like how my car looks, hence the two models mentioned. I would prefer domestic cars, but Toyota, Honda and Volkswagon rank in the top five for fuel efficiency per Edmunds.com. I still need to research total cost of ownership (I was told VWs tend to cost more to fix as parts are more expensive), but with these basic features, I am ready to move on to the next step--driving the likely choices.
A Toyota Corolla may hit all my important features and even some of my desired ones, but if it makes me feel squished or I do not like the road noise, this is not a model I will consider for purchase. I realize compromises will need to be made when I buy my next car. Test driving some of the likely candidates will give me real-world experience and help solidify my decision or introduce me to new possibilities.
Sunday, May 4, 2008
Analyzing my net worth for April 2008
I was surprised that my net worth goes up with all the volatility in the stock market and the rumblings in the economy. Still, I was pleased to find in April, I increased my net worth by 1.5% from the previous month. This was greater than I expected with the various pressures on my money.
An unexpected car repair
Emergency funds are for just such an event and I was glad I could pay for this without issue. Still, losing over $1,400 in my liquid assets is no fun--and not the direction I want my savings to go.
Revised home assessment
Yes, I received one of these in the mail and the number went down 1.5%. The assessed value did not go down as much as it could have since I did do a window replacement, but it was not enough to counterbalance the market trends.
The stock market and its effects on my retirement funds
While my 401k and Roth IRA gained in value above the contributions made, my rollover IRA lost value. Since the rollover IRA was a front-load fund, I was not happy to see the low numbers. Since this news was from the first quarter of 2008, the loss may moderate and I may end the year ahead. Time will tell.
In addition, I received a statement from a university pension fund. Since I worked for a state university for 2.5 years, there is money invested in my name. I have let the money sit in the account as the fund is well-managed. In fact, I gained nearly $1,000 in value from the year before. This was as of January 1, 2008, the date of the statement, but an impressive number since the account gained 11.6% in value.
I am happy to see my net worth go up, but I expect May will not look as good. I have spent a lot on gardening supplies and home improvement, and the bill comes due this month. However, I will likely stay on a positive trend unless the stock market heads on a downward trend.
An unexpected car repair
Emergency funds are for just such an event and I was glad I could pay for this without issue. Still, losing over $1,400 in my liquid assets is no fun--and not the direction I want my savings to go.
Revised home assessment
Yes, I received one of these in the mail and the number went down 1.5%. The assessed value did not go down as much as it could have since I did do a window replacement, but it was not enough to counterbalance the market trends.
The stock market and its effects on my retirement funds
While my 401k and Roth IRA gained in value above the contributions made, my rollover IRA lost value. Since the rollover IRA was a front-load fund, I was not happy to see the low numbers. Since this news was from the first quarter of 2008, the loss may moderate and I may end the year ahead. Time will tell.
In addition, I received a statement from a university pension fund. Since I worked for a state university for 2.5 years, there is money invested in my name. I have let the money sit in the account as the fund is well-managed. In fact, I gained nearly $1,000 in value from the year before. This was as of January 1, 2008, the date of the statement, but an impressive number since the account gained 11.6% in value.
I am happy to see my net worth go up, but I expect May will not look as good. I have spent a lot on gardening supplies and home improvement, and the bill comes due this month. However, I will likely stay on a positive trend unless the stock market heads on a downward trend.
Tuesday, April 22, 2008
Take a bit of time and save a bit of gasoline
Not only does slowing down and observing the 55 mph speed limit help maximize fuel efficiency over speeding at 60, 65, 75 or even more mph, but checking the air in your tires and the air filter in your car are useful as well.
I check the air in my tires at least once a month. Knowing your number, in my case, 32psi, along with owning a tire pressure gauge and knowing which gas stations have free air (Amoco or PDQ in my area) helps keep me well inflated. I usually find at least one tire low so I fill it up and am ready to go.
Also, I cannot argue with the air filter advice. I had my oil changed at one of those quick oil changing places over a year ago, and they showed me my air filter. It was filthy so I agreed to have them change it. My next fill up, my gas mileage increased by over 2 miles per gallon. That is impressive!
Not only do these actions maintain peak fuel efficiency, but they also keep your car in shape for the long haul. Just stop at a gas station in the morning before work, check the air pressure and add air if needed. Most experts recommend checking air pressure when the tire is cold, not warm from miles of driving.
Get to know where your local auto parts stores are. Stop by and pick up a new air filter or ask to have your trusted mechanic replace it during an oil change. Some of the auto parts store employees might even replace your filter for you. They replaced my windshield wiper blades when I purchased new ones. And while you are picking up a new air filter, ask the nice gentlemen where the tire pressure gauges are and pick up one for your use. That small purchase will pay you back quickly with peak fuel efficiency.
I check the air in my tires at least once a month. Knowing your number, in my case, 32psi, along with owning a tire pressure gauge and knowing which gas stations have free air (Amoco or PDQ in my area) helps keep me well inflated. I usually find at least one tire low so I fill it up and am ready to go.
Also, I cannot argue with the air filter advice. I had my oil changed at one of those quick oil changing places over a year ago, and they showed me my air filter. It was filthy so I agreed to have them change it. My next fill up, my gas mileage increased by over 2 miles per gallon. That is impressive!
Not only do these actions maintain peak fuel efficiency, but they also keep your car in shape for the long haul. Just stop at a gas station in the morning before work, check the air pressure and add air if needed. Most experts recommend checking air pressure when the tire is cold, not warm from miles of driving.
Get to know where your local auto parts stores are. Stop by and pick up a new air filter or ask to have your trusted mechanic replace it during an oil change. Some of the auto parts store employees might even replace your filter for you. They replaced my windshield wiper blades when I purchased new ones. And while you are picking up a new air filter, ask the nice gentlemen where the tire pressure gauges are and pick up one for your use. That small purchase will pay you back quickly with peak fuel efficiency.
Thursday, April 3, 2008
Have gas prices affected driving behavior?
I have read articles that note people have been driving less, combining errands and even forgoing trips because the gas prices have increased over 25% since the same month the year before. However, my experience has shown that people, while combining trips and carpooling more often, still speed. Since the faster the car goes over 55mph, the greater the decrease in gas mileage, this seems an easy way to cut consumption. Even I, who never likes to go more than 5mph over the speed limit anyway, am hitting that 55 mark when the sign says 55mph, rather than 58mph. My payoff? I hit 30mpg my last fuel fill up. I was happy to see that number as winter has had me in the low- to mid-20s.
My car is a 1997 Dodge Stratus and the revised government estimates state that I can expect 26mpg at highway speeds. Since I mainly drive between 45-55mph, that is the number I use as my benchmark. Hence, my 30mpg looks very good in comparison to the rating for the car.
Yet, if people are concerned about the price of gas, I could not tell on my commute yesterday morning. I took a different route than I normally do and ended up on a two-lane 55mph highway. I was passed by no fewer than five vehicles when I had my cruise control set at 55. As it was a two-lane highway, they could only pass me if there was no oncoming traffic. Once I was passed, they definitely kept their higher rate of speed as the vehicles got further ahead of me.
When I turned onto a second highway, I knew the speed limit went from 55 to 65mph. However, I wait until I see that 65mph sign before accelerating (~2 miles). This behavior was in direct contrast to many other vehicles that eagerly anticipated the speed increase well before the sign. Since I set my cruise control for 65mph, I observed that over 90% of the vehicles passed me as I drove in the right lane of the four-lane split highway. These vehicles were a mix of minivans, cars, SUVs and trucks, many of which get poorer gas mileage than I do. Plus, I found when I speed, I tend to be more impatient and more easily angered by people on the road than if I just set my mind on the speed limit and let them pass me.
The danger is I also get tailgated (or vehicles are closer than I am comfortable with), but I want to maximize the use of my gas rather than get to work two minutes earlier as others seem intent on doing. I cannot change their behavior but I can do my best to be a good citizen of the road. Other drivers would disagree on how good a citizen I am since I do occasionally let loose my contempt for their tailgating or passing me while I drive the speed limit.
I could speculate people are not passing me at quite the same fast clip nor am I passed by every vehicle, but I am not seeing a dramatic effect of rising gas prices on speeding although morning rush hour was more competitive than an hour after the evening commute. My perspective reflects that people are unhappy with gas prices but still enjoy speeding around town and country. Just relax and drive the speed limit. You will get where you want to go and preserve a bit of cash. Is it truly worth the possible few minutes gained by speeding if it costs extra money every day?
My car is a 1997 Dodge Stratus and the revised government estimates state that I can expect 26mpg at highway speeds. Since I mainly drive between 45-55mph, that is the number I use as my benchmark. Hence, my 30mpg looks very good in comparison to the rating for the car.
Yet, if people are concerned about the price of gas, I could not tell on my commute yesterday morning. I took a different route than I normally do and ended up on a two-lane 55mph highway. I was passed by no fewer than five vehicles when I had my cruise control set at 55. As it was a two-lane highway, they could only pass me if there was no oncoming traffic. Once I was passed, they definitely kept their higher rate of speed as the vehicles got further ahead of me.
When I turned onto a second highway, I knew the speed limit went from 55 to 65mph. However, I wait until I see that 65mph sign before accelerating (~2 miles). This behavior was in direct contrast to many other vehicles that eagerly anticipated the speed increase well before the sign. Since I set my cruise control for 65mph, I observed that over 90% of the vehicles passed me as I drove in the right lane of the four-lane split highway. These vehicles were a mix of minivans, cars, SUVs and trucks, many of which get poorer gas mileage than I do. Plus, I found when I speed, I tend to be more impatient and more easily angered by people on the road than if I just set my mind on the speed limit and let them pass me.
The danger is I also get tailgated (or vehicles are closer than I am comfortable with), but I want to maximize the use of my gas rather than get to work two minutes earlier as others seem intent on doing. I cannot change their behavior but I can do my best to be a good citizen of the road. Other drivers would disagree on how good a citizen I am since I do occasionally let loose my contempt for their tailgating or passing me while I drive the speed limit.
I could speculate people are not passing me at quite the same fast clip nor am I passed by every vehicle, but I am not seeing a dramatic effect of rising gas prices on speeding although morning rush hour was more competitive than an hour after the evening commute. My perspective reflects that people are unhappy with gas prices but still enjoy speeding around town and country. Just relax and drive the speed limit. You will get where you want to go and preserve a bit of cash. Is it truly worth the possible few minutes gained by speeding if it costs extra money every day?
Wednesday, April 2, 2008
Making my Driver's Edge Citibank Rewards Card work for me
For the last seven years, I paid off my credit card bill whenever it arrived, I thought I would look at possibility of rewards credit cards. After doing some research, I ended debating between one that would help me pay for a car and one that would help me pay for my mortgage. (Now that I am looking at a shorter timeline for car replacement, I am glad I chose the former.) Once the decision was made, I applied for and received a Citibank Driver's Edge Platinum Rewards card.
As many financial people tell you, even if you no longer use a credit card, do not close the account. (This keeps the amount of available credit versus credit card balance higher as well as giving a longer credit history as I understand it.) Therefore, my other credit card was retired but not closed, and I solely use the Driver's Edge Rewards card. I am a one-credit-card gal and it keeps my life simple.
However, I neglected to take advantage of all the perks provided by the rewards card. Not only did I receive an introductory 5% back on my purchases at grocery and pharmacy stores and gas stations when I used my card (drops to 3% after six months), but I could get additional rebates on my accumulating mileage and submit my car repair bills for credit. Unfortunately, while I did read the booklet detailing my rewards, I retained only that I needed to submit evidence of my odometer reading. As a result, I waited until I finally had my oil change before filling out the form.
Turns out, I could have applied for the mileage program, but it would only be counted when I submitted a receipt with the odometer reading on it. Basically, I cheated myself out of five months worth of mileage. With my potential car purchase closer than I would like, every little penny helps!
I did not delay any longer. I sent out my enrollment form for the mileage program and then submitted my bill for the oil change and small car repair at the same time. I will take the extra $2 toward a car purchase any time. I can only accumulate up to $5,000 in five years before having to use my rewards, but that time frame works for me. Right now my potential reward stands at $50, but with a big repair and increased gas costs (plus all the miles I put on my car), this number should increase at a faster rate.
Currently, my auto savings account is around $1,000. With more of my rebates, refunds, extra money, unexpected bonuses and cash for selling stuff going to this account, I think I could get to $2,000 by September 2008, one year after I started saving for a car. I also intend to automatically save more money for a newer car and that will add up even if the interest rate on my ING Direct account is not impressive.
Hopefully, my car will last another three to four years so I can accumulate more money to get myself a newer car. While I was aiming for a newer used vehicle around 50,000 miles for ~$6,000, I may have to set my sights higher especially as more fuel-efficient models around three years old seem to be priced ~$10,000. At least I should have a decent down payment on a newer car if the time frame is shorter than I hope for.
Edit: As it turns out, I misunderstood the rewards program. When I sent in my car repair bills, Citibank redeemed some of my rewards dollars against the repairs. Only purchases and mileage add to the total; car purchases and fixes decrease the total.
As many financial people tell you, even if you no longer use a credit card, do not close the account. (This keeps the amount of available credit versus credit card balance higher as well as giving a longer credit history as I understand it.) Therefore, my other credit card was retired but not closed, and I solely use the Driver's Edge Rewards card. I am a one-credit-card gal and it keeps my life simple.
However, I neglected to take advantage of all the perks provided by the rewards card. Not only did I receive an introductory 5% back on my purchases at grocery and pharmacy stores and gas stations when I used my card (drops to 3% after six months), but I could get additional rebates on my accumulating mileage and submit my car repair bills for credit. Unfortunately, while I did read the booklet detailing my rewards, I retained only that I needed to submit evidence of my odometer reading. As a result, I waited until I finally had my oil change before filling out the form.
Turns out, I could have applied for the mileage program, but it would only be counted when I submitted a receipt with the odometer reading on it. Basically, I cheated myself out of five months worth of mileage. With my potential car purchase closer than I would like, every little penny helps!
I did not delay any longer. I sent out my enrollment form for the mileage program and then submitted my bill for the oil change and small car repair at the same time. I will take the extra $2 toward a car purchase any time. I can only accumulate up to $5,000 in five years before having to use my rewards, but that time frame works for me. Right now my potential reward stands at $50, but with a big repair and increased gas costs (plus all the miles I put on my car), this number should increase at a faster rate.
Currently, my auto savings account is around $1,000. With more of my rebates, refunds, extra money, unexpected bonuses and cash for selling stuff going to this account, I think I could get to $2,000 by September 2008, one year after I started saving for a car. I also intend to automatically save more money for a newer car and that will add up even if the interest rate on my ING Direct account is not impressive.
Hopefully, my car will last another three to four years so I can accumulate more money to get myself a newer car. While I was aiming for a newer used vehicle around 50,000 miles for ~$6,000, I may have to set my sights higher especially as more fuel-efficient models around three years old seem to be priced ~$10,000. At least I should have a decent down payment on a newer car if the time frame is shorter than I hope for.
Edit: As it turns out, I misunderstood the rewards program. When I sent in my car repair bills, Citibank redeemed some of my rewards dollars against the repairs. Only purchases and mileage add to the total; car purchases and fixes decrease the total.
Friday, March 28, 2008
My money or my (replacement) car
I have been very happy with my car. I bought it used almost six years ago from a man who rebuilds autos. This means my car is more experienced about accidents than I am. As a result, I could purchase a car of its vintage for less than what I found on dealer's lots and with fewer miles. In addition, this guy had been in business for nearly 20 years and if he was no good, I doubt he would still be in business. So my five-year-old car and I were united in human-auto bliss.
Well, not really. Cars in American society are captured by the phrase: cannot live without them and cost you a lot of money. Most people talk about total cost of ownership. I did have to take out an auto loan for the vehicle and paid it off a few months before it was due. Plus there are the issues that come up, oil changes and other maintenance. I just totaled up what my car has cost me over the last six years for oil, parts and repair: $2,600. I may have lost a receipt as I seem to find nothing for repairs in 2003. To add onto my repair bill, let us say it cost me $3,000 over six years. That is $500 per year. Add in car insurance, registration and initial purchase price and that gives me about $2,200 per year I paid for my car. Not a bad TCO (excluding gasoline as I did not have those numbers handy).
However, the story has just changed. The auto shop I visit for my semiannual auto checkup called me after my latest checkup and gave me a list of items to repair and $2,500 estimate for fixing my car. I am used to them telling me $200 or $300 at a time. I choked on the number and was thinking "Crap, I am not prepared to buy a new car." My plan was to drive my car another four or five years, save my money and purchase a newer used car outright. Being the car-ignorant person I am, I called my dad and asked for his opinion. He talked to his mechanic and got some numbers about the items I recalled from my mechanic's conversation and called me back.
I was a bit upset at this point because my dad, while helpful in getting a second opinion and even talking directly with my mechanic, was saying "In your situation, you should consider purchasing a new car where you are covered under a warranty." I completely subscribe to the view that new cars stink, losing value immediately off the lot and depreciating quickly after that. Plus, I could not afford loan payments for a new car. Essentially, I would have to trade saving money for a car payment, not the way I want to go. Needless to say, I was not receptive to Dad's point of view and he ended our conversation on a sour note--at least on my part.
He also encouraged me to add up my repair costs (hence the number above) and talk to him when I got home that evening. I did add up the numbers once I found all my receipts and then called him. I think I will decide to do some of the repairs, which will cost me between $500 and $670 depending on who I choose to do the repair, and still be able to run my car another 20,000 miles or so. This latter number is an assessment from my dad and from my perspective, will give me some time to beef up my car savings account. My found money account may not grow as quickly as I wanted since I have a new savings goal.
Of course, I could be out $600+ in less than a few months if the car just gives it up on me. This is a decision I do not want to make because financially, I am not comfortable taking on a mortgage and a car payment. However, I also do not want my car to fail me. I am quite reliant on it and is my only form of transportation. Well, there is my bicycle, but in my physical condition, a ride would not get me very far. Since I no longer car pool, I really do not have a backup plan.
In an ideal world, I want to pay cash for a newer used car (presumably more reliable), owning it free and clear. In the real world, I may have to consider a new car and the associated loan payment. One advantage to a new car: I can get one with great gas mileage. Right now, I have to decide who will fix my car, my mechanic or my parent's. Then I need to figure out how to increase my contributions to my car savings account. And while I am doing that, I need to research various car models (and years) to find out which might suit me and how having a loan payment will affect me. Just in case my fix is only temporary and the cost to repair exceeds the value, I need to know what to substitute for my current car. Hopefully, I will get the time I need to save the money for my next purchase.
Well, not really. Cars in American society are captured by the phrase: cannot live without them and cost you a lot of money. Most people talk about total cost of ownership. I did have to take out an auto loan for the vehicle and paid it off a few months before it was due. Plus there are the issues that come up, oil changes and other maintenance. I just totaled up what my car has cost me over the last six years for oil, parts and repair: $2,600. I may have lost a receipt as I seem to find nothing for repairs in 2003. To add onto my repair bill, let us say it cost me $3,000 over six years. That is $500 per year. Add in car insurance, registration and initial purchase price and that gives me about $2,200 per year I paid for my car. Not a bad TCO (excluding gasoline as I did not have those numbers handy).
However, the story has just changed. The auto shop I visit for my semiannual auto checkup called me after my latest checkup and gave me a list of items to repair and $2,500 estimate for fixing my car. I am used to them telling me $200 or $300 at a time. I choked on the number and was thinking "Crap, I am not prepared to buy a new car." My plan was to drive my car another four or five years, save my money and purchase a newer used car outright. Being the car-ignorant person I am, I called my dad and asked for his opinion. He talked to his mechanic and got some numbers about the items I recalled from my mechanic's conversation and called me back.
I was a bit upset at this point because my dad, while helpful in getting a second opinion and even talking directly with my mechanic, was saying "In your situation, you should consider purchasing a new car where you are covered under a warranty." I completely subscribe to the view that new cars stink, losing value immediately off the lot and depreciating quickly after that. Plus, I could not afford loan payments for a new car. Essentially, I would have to trade saving money for a car payment, not the way I want to go. Needless to say, I was not receptive to Dad's point of view and he ended our conversation on a sour note--at least on my part.
He also encouraged me to add up my repair costs (hence the number above) and talk to him when I got home that evening. I did add up the numbers once I found all my receipts and then called him. I think I will decide to do some of the repairs, which will cost me between $500 and $670 depending on who I choose to do the repair, and still be able to run my car another 20,000 miles or so. This latter number is an assessment from my dad and from my perspective, will give me some time to beef up my car savings account. My found money account may not grow as quickly as I wanted since I have a new savings goal.
Of course, I could be out $600+ in less than a few months if the car just gives it up on me. This is a decision I do not want to make because financially, I am not comfortable taking on a mortgage and a car payment. However, I also do not want my car to fail me. I am quite reliant on it and is my only form of transportation. Well, there is my bicycle, but in my physical condition, a ride would not get me very far. Since I no longer car pool, I really do not have a backup plan.
In an ideal world, I want to pay cash for a newer used car (presumably more reliable), owning it free and clear. In the real world, I may have to consider a new car and the associated loan payment. One advantage to a new car: I can get one with great gas mileage. Right now, I have to decide who will fix my car, my mechanic or my parent's. Then I need to figure out how to increase my contributions to my car savings account. And while I am doing that, I need to research various car models (and years) to find out which might suit me and how having a loan payment will affect me. Just in case my fix is only temporary and the cost to repair exceeds the value, I need to know what to substitute for my current car. Hopefully, I will get the time I need to save the money for my next purchase.
Tuesday, March 18, 2008
Buying a car can help you pay debt!
I was taken aback by a recent Hyundai commercial. A young man in his late twenties was driving one of the SUVs like the 2008 Hyundai Tucson with the salesperson in the back. (I cannot tell one SUV from another. To me, they all look the same--big!) The young man was enjoying his test drive as the salesperson was highlighting the vehicle's features. One of the last points made by the sales guy was the Hyundai model was less than another brand's comparable and along with the $2,000 cash back, the young man could pay down his debts.
Okay, you are telling a guy to buy a large, expensive SUV so he can pay down credit card debt? Nothing ringing a bell here? I know price point is part of a sales pitch for a car. It typically is price point and features (including safety ratings) that buyers pay attention to. However, the commercial was jarring because if a young man is debt, he is likely financing the SUV, not buying it outright. That means the "cash back" is a gimmick and the buyer goes further into debt, not paying down debt as the salesperson (and commercial) would have you believe.
I know that commercials are disingenuous and want to sell you something thereby adding to the company's bottom line. But in this time of credit crunches, tight finances and concerns about the markets, telling people to buy a new car to save some money is ridiculous. And in this case, save money as you drive a gas-guzzling vehicle--doubly disingenuous. I have only seen the commercial once so maybe Hyundai pulled it, but I was appalled nonetheless.
Okay, you are telling a guy to buy a large, expensive SUV so he can pay down credit card debt? Nothing ringing a bell here? I know price point is part of a sales pitch for a car. It typically is price point and features (including safety ratings) that buyers pay attention to. However, the commercial was jarring because if a young man is debt, he is likely financing the SUV, not buying it outright. That means the "cash back" is a gimmick and the buyer goes further into debt, not paying down debt as the salesperson (and commercial) would have you believe.
I know that commercials are disingenuous and want to sell you something thereby adding to the company's bottom line. But in this time of credit crunches, tight finances and concerns about the markets, telling people to buy a new car to save some money is ridiculous. And in this case, save money as you drive a gas-guzzling vehicle--doubly disingenuous. I have only seen the commercial once so maybe Hyundai pulled it, but I was appalled nonetheless.
Sunday, February 17, 2008
Maintaining my car for the long haul
My goal for my car: to make it to the average lifetime of 150,000 miles. Not an insignificant goal, but one I have not achieved quite yet. This is only the second car I have owned. In college, my parents loaned me their car so I could drive to work and home on the occasional weekends (they got tired of picking me up, driving me home and then driving me back to my dorm). My parents actually purchased my first car outright, a 1988 white Chevy Beretta for $2,200. (After seeing my dad in action, I will not go car shopping without him!) However, my parents did require me to pay them back and charged me interest. It took me some time as I was in graduate school, had only had a small stipend and therefore, my car payment was small. The advantage of getting a loan from First National Mom and Dad: if I skipped a payment, my car would not be repossessed.
My memory is hazy, but I do not think I skipped a payment but I may have paid less sometimes depending on how tight the money was. I owned that car for 6.5 years and sold the 14-year-old car to my sister who totaled it in less than six months. It was a good little car, but I did want something newer for my new industry job--and a few more creature comforts.
For this second car purchase, I intended on taking out a car loan. I knew what I could afford as a monthly payment and my goal was to find something under 100,000 miles. My first car I purchased with 112,000 miles and sold it to my sister at 135,000 miles. My dad suggested I look at minivans, but I adamantly refused. Instead, we ended up eying a 1997 Dodge Stratus, Candy Apple Red. Can you say pretty? Can you say "it's not white!" The drawback--it was not immediately available. I bought the car from a man who purchases salvage cars, fixes them up and resells them. He had been in business for nearly 20 years when I bought my car and my dad was willing to bargain with him so I felt like this was a good situation. I certainly purchased my car for cheaper than a similar mileage car on a lot and it had 74,000 miles on it, meeting my goal. My engine was also upgraded to a V6 so I did not mind the horsepower increase.
Nearly six years later, it is running well, just over 115,000 miles and still going strong. The car loan was paid off six months sooner than the term of the loan so I have owned it free and clear for nearly four years. I have been conscientious about maintenance and hope to make it last until I have the cash saved to buy a vehicle outright. Here is how I do it:
I take the car into an trusted auto shop twice a year, once in spring and once in autumn. By taking my car in for its twice yearly checkup, I can head off problems before they create dangerous situations. I trust my mechanics to tell my the car is in good condition or inform me if something that needs to be repaired. Of course, usually something does need to be fixed or replaced, but they have caught issues that could have become serious. For example, part of the rotor on my rear brakes was wearing unevenly, costing me braking power and could potentially give out at the wrong time. This is not something that squeaky brakes would inform you that it needs to be replaced. This is why I like my shop: the mechanic showed me the part and it was obviously not working correctly, answered all my questions and went ahead with the repair immediately. This is why I also set aside money each month for car repairs. Sometimes it is a quick fix and sometimes an expensive fix, but I usually can cover most of it from my car maintenance fund and savings for the rest.
I change the oil regularly. Until now, I have changed the oil every 3,000 miles or 3 months as the adage goes. However, I finally looked at my manual and it recommends changing this often only if I stress the engine with lots of stop-and-start traffic or towing heavy items. Otherwise, it suggests changing the oil every 7,500 miles. I am compromising and changing around every 5,000-6,000 miles or every time I visit my mechanic. Most of my driving is on the highway (50-55 mph) with only occasional city or stop-and-go traffic. I also have an engine with higher miles on it so I do not think I want to wait to hit the 7,500 mile mark. Again, this cost is covered by my car maintenance fund.
I keep at least a half a tank of gas in my car. I understand that this is not practical for everyone. However, I live in the Midwest where it gets cold, below zero cold, in the winter. More liquid in the tank means lower chance of freezing. It also means less air in the tank and decreased chance of water vapor condensing onto the gasoline, causing engine problems. I use some of the fuel additive two or three times a year to help with the water issue. I do not know how many miles my car can go when the needle is on "E" unlike my dad and my brothers. I do not intend to find out and will continue to keep my tank at half full or more regardless of the season.
I check the air in my tires every three to four weeks. Keeping the tires properly inflated not only maximizes fuel efficiency but keeps the best traction on the road. In winter, traction may not account for much, but I want to make sure my tires make the best contact with the road they can. I always take a gas mileage hit in the winter. If my tires are inflated properly, I can get the most out of the gasoline I use.
I have been very pleased with my car. It has been quite reliable but, as with many items that depreciate, costs me money. However, it has not been expensive to maintain and the gas mileage averages 26 mpg (lower in winter, higher in summer). I believe it will get me to 150,000 miles and beyond before I need to purchase a newer used car.
My memory is hazy, but I do not think I skipped a payment but I may have paid less sometimes depending on how tight the money was. I owned that car for 6.5 years and sold the 14-year-old car to my sister who totaled it in less than six months. It was a good little car, but I did want something newer for my new industry job--and a few more creature comforts.
For this second car purchase, I intended on taking out a car loan. I knew what I could afford as a monthly payment and my goal was to find something under 100,000 miles. My first car I purchased with 112,000 miles and sold it to my sister at 135,000 miles. My dad suggested I look at minivans, but I adamantly refused. Instead, we ended up eying a 1997 Dodge Stratus, Candy Apple Red. Can you say pretty? Can you say "it's not white!" The drawback--it was not immediately available. I bought the car from a man who purchases salvage cars, fixes them up and resells them. He had been in business for nearly 20 years when I bought my car and my dad was willing to bargain with him so I felt like this was a good situation. I certainly purchased my car for cheaper than a similar mileage car on a lot and it had 74,000 miles on it, meeting my goal. My engine was also upgraded to a V6 so I did not mind the horsepower increase.
Nearly six years later, it is running well, just over 115,000 miles and still going strong. The car loan was paid off six months sooner than the term of the loan so I have owned it free and clear for nearly four years. I have been conscientious about maintenance and hope to make it last until I have the cash saved to buy a vehicle outright. Here is how I do it:
I take the car into an trusted auto shop twice a year, once in spring and once in autumn. By taking my car in for its twice yearly checkup, I can head off problems before they create dangerous situations. I trust my mechanics to tell my the car is in good condition or inform me if something that needs to be repaired. Of course, usually something does need to be fixed or replaced, but they have caught issues that could have become serious. For example, part of the rotor on my rear brakes was wearing unevenly, costing me braking power and could potentially give out at the wrong time. This is not something that squeaky brakes would inform you that it needs to be replaced. This is why I like my shop: the mechanic showed me the part and it was obviously not working correctly, answered all my questions and went ahead with the repair immediately. This is why I also set aside money each month for car repairs. Sometimes it is a quick fix and sometimes an expensive fix, but I usually can cover most of it from my car maintenance fund and savings for the rest.
I change the oil regularly. Until now, I have changed the oil every 3,000 miles or 3 months as the adage goes. However, I finally looked at my manual and it recommends changing this often only if I stress the engine with lots of stop-and-start traffic or towing heavy items. Otherwise, it suggests changing the oil every 7,500 miles. I am compromising and changing around every 5,000-6,000 miles or every time I visit my mechanic. Most of my driving is on the highway (50-55 mph) with only occasional city or stop-and-go traffic. I also have an engine with higher miles on it so I do not think I want to wait to hit the 7,500 mile mark. Again, this cost is covered by my car maintenance fund.
I keep at least a half a tank of gas in my car. I understand that this is not practical for everyone. However, I live in the Midwest where it gets cold, below zero cold, in the winter. More liquid in the tank means lower chance of freezing. It also means less air in the tank and decreased chance of water vapor condensing onto the gasoline, causing engine problems. I use some of the fuel additive two or three times a year to help with the water issue. I do not know how many miles my car can go when the needle is on "E" unlike my dad and my brothers. I do not intend to find out and will continue to keep my tank at half full or more regardless of the season.
I check the air in my tires every three to four weeks. Keeping the tires properly inflated not only maximizes fuel efficiency but keeps the best traction on the road. In winter, traction may not account for much, but I want to make sure my tires make the best contact with the road they can. I always take a gas mileage hit in the winter. If my tires are inflated properly, I can get the most out of the gasoline I use.
I have been very pleased with my car. It has been quite reliable but, as with many items that depreciate, costs me money. However, it has not been expensive to maintain and the gas mileage averages 26 mpg (lower in winter, higher in summer). I believe it will get me to 150,000 miles and beyond before I need to purchase a newer used car.
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