Vehicle Maintenance Myths That Could Cost You

car myths debunkedA lot of your accumulated car wisdom probably comes via tidbits from friends, relatives, shop teachers, driving instructors and various other fellow passengers on the highway of life. While some of this passed-on knowledge can be incredibly shrewd and useful, chances are some of the information just doesn’t compute.

The myth: Replace it all

Back in the day, when filters, spark plugs and other car parts wore out faster, it made more sense to have your mechanic replace a bunch of components whenever you took your car in for an oil change. These days, though, just about everything in your car lasts much longer than it did in previous generations. Keeping a detailed service record and cross-referencing it with your owner’s manual will help YOU know when things need to be replaced and not make you reliant on your mechanic for potentially costly decisions.

The myth: Use cleaners other than windshield wiper fluid

Are you one of those people who likes to use those “sneaky little tricks” to do a job more efficiently? If you are, and you’ve heard the one about using other kinds of cleaning liquids in place of windshield wiper fluid, be aware that while your windshield may seem cleaner, you are also probably stripping your car’s finish in the process.

The myth: Let your car warm up before you drive

This one isn’t complete nonsense. There was a time when cars needed a little run-time before the engine was operating at optimal efficiency. However, unless you drive a classic car, you are only wasting gas by running your engine prior to a trip.

The myth: Flush it

Some mechanics out there are quite flush happy. They want to flush your transmission, your radiator, your engine oil, and so on. But modern vehicles require these actions very infrequently. Consult with your owner’s manual to make sure your money isn’t just getting flushed down the drain.

The myth: Put your car in neutral at a stop light

The logic (if you can call it that) behind this suggestion is that it is supposed to put less strain on cars with automatic transmission. Shifting into neutral over and over will actually send you to the shop for a new transition much faster than if you had just left it alone.

The myth: Top off the brake fluid and forget it

If your vehicle is low on brake fluid, you have a problem. Either the fluid is leaking or your brakes are becoming dangerously worn out. From a money-saving perspective, it may seem counterintuitive to spend hundreds of dollars for brakes, but it’s better than having to pay for repairs and higher insurance rates because you couldn’t stop in time.

There are lots of folks out there who like to share vehicle advice. However, you can do yourself a big favor by at least researching their tips to make sure you aren’t just creating more problems. You’ll also be rewarded for your efforts by having a few more dollars in your pocket.

©Copyright Balance

Your Midyear Financial Checkup

Midyear_Financial_Checkup_t750x550Setting a few hours aside for a midyear financial checkup in June or July can help you review how you’re doing with savings, investing, spending and debt. It can give you the opportunity to spot irregularities and adjust your budget well in advance of year-end.

If you already work with a qualified financial or tax advisor, consider discussing this review process with them so they can guide you to any specific money issues you should be tracking.

Start by requesting at least one of your three credit reports. The idea is to make sure your credit balances are accurate and to check closely for any irregularities that might signal identity theft. Federal law requires that each of the major credit agencies—Experian, Equifax and TransUnion—give you your most recent credit reports for free once a year.

If you discover unusual charges or accounts you didn’t open, alert your advisors, take any steps they recommend and otherwise follow the U.S. Federal Trade Commission’s step-by-step identity theft guide to help you take action. Remember to stagger receipt of each of your credit reports throughout the year so you have the opportunity to catch potential irregularities every few months.

Next, turn to your budget or start one if you’ve never made one before. The midyear review should focus on whether adjustments can be made to save or invest more or pay off more debt if more money is coming in from a raise or other resources. If spending is up by midyear, it’s always important to know why and whether funds can be reallocated to better purpose.

Review your retirement and whether you’re maximizing your contributions at work or in your own personal retirement accounts. Those who reach age 50 by the end of the calendar year will be able to take advantage of additional catch-up contribution allowances to beef up their balances as they approach retirement.

Midyear is also a good time to check the adequacy of one’s emergency fund. Emergency funds help keep you from tapping your credit or savings balances in a sudden cash emergency. The amount of money you keep in your emergency fund should fit your needs, but consider a balance of four to seven months of everyday expenses in case there’s a short-term job loss or an emergency repair. Consider keeping a year-round list of potential home, car or personal expenses and decide whether your emergency fund is adequate or you might need to set up other savings accounts to address bigger needs.

Make sure your tax withholding levels are correct. This is particularly important if your income has changed during the first six months of the year and you might be closing in on a higher or lower tax bracket. Consult your tax advisor for assistance, and the IRS features its own withholding calculator to help you decide.

Finally, make sure all your recordkeeping is up to date. Midyear is a good time to look over all your spending, saving and investment records to make sure all the numbers add up and underlying paperwork is in order. Also consider online banking, investing and bill payment as a way to save more time and money.

Bottom line: Taking a midyear break to review your finances gives you a thoughtful opportunity to spot errors, adjust your budget and save on taxes.

 

By Jason Alderman

Easy Ways to Save on Your Water Bill

SaveOnWaterBillYou know there’s money to be saved by using less water in and around your home, but you aren’t quite ready to put a brick in your toilet tank or reduce your shower flow to a trickle. Have no fear; there are still steps you can take to seriously reduce your water bill each month.

  • Take shorter showers.
  • Fix leaks to faucets or pipes.
  • Only do full loads of laundry or dishes.
  • Don’t leave the faucet on while you brush your teeth or shave.
  • Buy more efficient appliances, like a laundry machine or toilet.
  • Use a dishwasher instead of doing dishes by hand.
  • Put food coloring into your toilet tank and see if the dye ends up in the bowl. If it does, you have a leak and you are wasting hundreds of gallons of water each day.
  • Capture rainwater to water the lawn or plants during dry times.
  • Use hose water to clean—such as the sidewalk, gutters, or roof—as infrequently as possible.
  • Don’t water your lawn on windy days.
  • If your children want to cool off during the summer, use a small pool instead of constant-stream water toys.
  • Choose plants, flower, shrubs or trees that don’t require a lot of water.
  • Wash your car at a car wash instead of at home.
  • Don’t use the toilet as a wastebasket. Throw everything you can into the trash instead.
  • Put a plastic bottle full of water into your toilet tank to reduce the amount of water that is fed into the tank each time you flush.
  • Avoid using your sink’s garbage disposal feature.
  • Put mulch around plants to slow the evaporation of water.
  • Teach your children to turn off faucets properly.
  • Shower instead of taking a bath.
  • Don’t thaw food by running water over it. Thaw it in the microwave instead.
  • Keep cool water in the refrigerator so you don’t have to run the tap water until it turns cold when you want a drink.
  • Replace your toilet flapper if it doesn’t close properly. It’s the rubber stopper at the bottom of the tank.
  • Save the water you use to rinse fruit and vegetables and use it water your house plants.
  • Wash your pet in an area of the lawn that needs watering.

You will likely find that one or two of these actions alone won’t put you on easy street. However, if you are conscientious about your water use, the savings could add up to hundreds of dollars more in your pocket every year.

 

© 2013 BALANCE

The Finances of Becoming a New Parent

Cute KidHow can something so small cause such a major upheaval in your life? Not the least of this upheaval is financial. In 2013, the U.S. Department of Agriculture estimated that the average middle-income family will spend over $241,080 raising a child until the age 18—and that does not include any college costs.

But just as you find the extra time and energy you will need to take care of the little bundle of consuming joy, you will find ways to work it out financially.

Planning for Parenthood Brace yourself. You will be spending much more than expected to buy things you never even thought of. Start planning financially for having a baby as soon as you can—before conception if possible.

Set aside as much as you can every month in a savings account. The actual event of birth can be expensive as well as all the first time purchases you’ll make. Don’t forget to save some money for your maternity or paternity leave. This is usually unpaid time off work.

How much do you need? As much as you can save. Any funds left over make a great starter for a college fund. If you’ve amassed a considerable amount well before the due date, you can invest in a short-term certificate or other insured investment. But don’t tie up your entire fund in investments. Babies will not sign contracts and they have not agreed to your schedule.

Have a brainstorming session with an experienced parent to figure out all the things you need to purchase before the delivery. It will be extremely helpful to have most of what you need before the baby is born. Your spare shopping time after birth is reduced drastically. If you need to shop after the baby is born, try the Internet. Nobody on the Internet cares how loud your baby is crying, what you are wearing or what time it is when your baby gives you a free moment to shop.

Here’s a starter list for your brainstorming session. This is far from a complete list, but it will help get you thinking.

  • Car Seat By law, you can’t even take the baby home from the hospital without one.
  • Crib You want one that meets the highest safety standards.
  • Bassinet One with wheels will add to your mobility around the house.
  • Stroller Consider getting one that’s part of a stroller/car seat combo. It makes transitions easier.
  • Baby Monitor “Baby calling Parents, come in, Parents.”
  • Safety Gate Keep your newly mobile child away from staircases and other hazards.

Maternity and Paternity Leave Most companies don’t provide paid maternity leave—and don’t have to. The Family and Medical Leave Act, which only applies if a company has more than 50 employees, ensures mothers should be able to return to their old job or an equivalent job up to 12 weeks after they begin their leave. The actual policy varies from company to company, especially if the company has fewer than 50 employees.

If you are a father, ask your employer about paternity leave. The Family and Medical Leave Act does not cover this time, but many employers are offering the same or similar benefits to their male employees.

Plan monetarily for maternity and paternity leave, as it is unpaid. You may be able to save up sick time and vacation time to continue receiving income for several weeks. But most likely, you will lose some income during this time.

Copyright © Visa

Handling the Unexpected

Unexpected PictureThere’s nothing harder to plan for than unexpected events that impact your life and finances. Yet loss of a job, the death of a loved one, illness or other unexpected occurrences happen at one point or another in most of our lives. The key to successfully surviving these life-changing events from a financial perspective is to anticipate hard times. Shore up your financial situation before you are hit with an unexpected expense, so you will be covered in the event something happens.

The Importance of an Emergency Fund Because we cannot predict when life will throw us an unexpected challenge, it is important for everyone to build and maintain an emergency fund with three to six months’ worth of living expenses. The key to building an emergency fund is to set money aside every month, no matter how small the amount. This Emergency Fund calculator can help you get started.

Financial experts recommend that, unlike retirement funds, emergency savings should be kept fairly liquid, in a savings account or a money market fund. Hopefully you will never need it. But if you do, you’ll be glad it’s there.

A New Financial Picture Once the immediate financial matters are taken care of after an unexpected life event, it will be time to take stock of your new financial situation and create a plan for yourself moving forward. Whether you have faced job loss, divorce, illness or another event, you should create a new budget reflecting your situation. This is the first step toward financial security and rebuilding your emergency fund, which you may have tapped into to manage a financial crisis.

To develop a budget, write down your current expenses, indicating whether each expense is a necessity or a luxury. Pulling out recent credit card bills and bank statements can help with this process. Next, estimate your monthly income, including only income that you are certain you will receive. Then compare your income to expenses. If your expenses are higher, you will need to trim your expenses until your income is higher than your expenditures.

 

Copyright © Visa

Use Children’s Allowance to Teach Valuable Money Skills

allowance

One of the hardest parts of parenting is allowing your children the freedom to learn from their own mistakes. We all want to protect our kids from harm, but if sheltered too much, they won’t be ready to deal with real-world challenges when they leave the nest. This is true for managing money just as with avoiding physically dangerous situations.

So, how to teach your kids sound financial habits? Try setting a good example with your own spending behavior. If you consistently spend beyond your means, don’t set aside emergency savings and don’t use a budget, your kids might imitate your behavior and set themselves up for problems down the road.

Involve your kids in budgeting for their own expenses at an early age. How you structure an allowance, what expenses it should be used for and the appropriate age at which to begin will vary by family, but here are a few helpful guidelines:

The goal of an allowance should be to teach children how to handle money wisely, not to reinforce good behavior—otherwise, your kids might think it’s okay to forego completing chores, getting good grades or treating others well, if the only consequence is missing out on a few dollars. It’s better to link those good behaviors to developing a sense of family responsibility and cooperation. Plus, when you put a price tag on good behavior, you might start seeing an outthrust palm every time you ask them to answer the phone or pass the salt.

Develop a needs-based allowance amount. Track your kids’ discretionary (toys, candy) and non-discretionary (school lunches, school supplies, clothes) expenses. (You’ll be shocked.) Then, depending on their ages and maturity, decide which expenses you want them responsible for managing, and set a reasonable amount for each category—this will be their allowance.

Start out slowly with only a few discretionary expenses, then gradually add others and increase their allowance as they become more confident. Realize that they’ll probably make a few mistakes—that’s part of the learning process.

Stick to your guns. If your son burns through his allowance by Tuesday and then begs for a new toy on Wednesday, tell him “no;” giving in sends a mixed message about the importance of budgeting. Use it as an opportunity to explain the importance of saving for things they really want and learning to live without those that don’t matter. Nobody likes delayed gratification, but the sooner they learn it, the easier life will be later on.

Use an allowance to teach important life lessons. Try to include an amount your kids can set aside for charitable giving. For example, my son knows he must donate 10 percent of his allowance to charity. Dedicate another portion to savings. You might offer to match savings account contributions to teach the value (and rewards) of saving.

Remember, the sooner your kids learn how to manage their own money, the sooner you’ll be able to concentrate on your own.

 

By Jason Alderman