Signs the Economy is on the Mend

Welcome to 2014, the year that we officially see the economy turn around and start to grow again! There are many signs that signify a healthy economy and we are currently seeing most of them on the mend. Consider that the stock market is near an all time high, and that’s despite the fact that interest rates are going up. Yes, that is another indicator, interest rates on investment and mortgages alike are starting to steadily rise month over month. Then we have the housing market, which is seeing new construction rise steadily, as well as the number of existing homes sold up two fold over previous years. One of the last and more significant indicators of a strengthening economy is that of jobs growth. When jobs are on the rise you have more people working and business owners investing, that’s the cycle of spending that we all learn about in our economics class.

 

Interest rates are a tricky indicator, when they are low then people love to invest in the stock market and stock options because the rate on reliable treasury bonds is are so low. At the same time, they spur the housing market because more people are willing to borrow at lower interest rates. Yet, when rates rise we consider the economy to be stronger because it means that people are still willing to invest and borrow despite rates increasing.

 

All of the indicators above lead right into job growth! For people to invest in the stock market, build and buy houses, and to spend money in general then they need to be earning money! It’s clear that corporations and small businesses alike are feeling confident in the economy and are willing to invest in hiring more people. The number of jobs isn’t the only sign this is true as compensation and benefits are on the rise again as well. Consider that the average salaries are increasing, 401k matches and pensions are becoming more generous, and healthcare benefits are growing stronger.

 

With the signs of an improved economy we are seeing consumer confidence growing along with it. The recession has been dragging us down for over half a decade so these improvements are a welcome sign and long overdue. I personally hope that we continue to see the economy rebound even further.

 

Debt Consolidation Can be as Fun as Playing a Game

Getting into debt is usually a lot more fun than getting out of it! After all, spending money on fun things is more appealing than spending money on credit card and loan payments. However, if you look at the infographic below, you will see that beating debt can be as much fun as playing a game. Looking at the steps to getting out and staying out debt you would think you’re in the middle of an arcade game, but in reality you are getting some helpful pointers for bettering your finances.

The first and most important step is to get a grasp on your current finances. Sounds easy, but sometimes people have no idea how much they owe and whom they owe it to. Get a list of all debtors, the monthly payments you are currently sending them, and the monthly interest that it is costing you.

Next comes the fun part…earn “financial lives” by consolidating your current debts into one easy and manageable monthly payment! The key to the next level lies within which type of consolidating loan you find, be it with a bank, or perhaps a peer-to-peer lending group.

In order to continue advancing levels, and conquering the primary enemy (debt!) then you simply need to work hard at building cash reservces, paying your monthly bills on time, and most importantly…staying out of debt!

The infographic below is brought to you by Zopa

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With Winter Comes Poor Gas Mileage

Have you been thinking that your car’s fuel economy has been lower over the last few weeks? If you have, it’s not your imagination it’s just the fact that, in winter, your fuel economy usually does go down, at least a little bit and in some cases quite a lot.

In fact, some cars can lose as much as a third of their fuel economy when the outside temperatures drops to 20°F, according to new research from the Oak Ridge National Laboratory. Not only that but on short trips during cold weather your fuel economy drops even further.

Bo Saulsbury, from Oak Ridge’s research group, said that “cold weather and winter driving conditions can reduce your fuel economy significantly,” adding that “fuel economy tests show that, in short-trip city driving, a conventional car’s gas mileage is about 12% lower.”

Oak Ridge compared to the fuel economy of over 600 conventional vehicles as well as 14 hybrids during weather that was 20° and compared that to their fuel economy during “normal” weather.

Interestingly enough, battery-based vehicles saw the biggest drop in fuel mileage, from between 31% and 34%. So, for example, a car that’s getting 45 MPG regularly will drop to only 30 mpg when the temperature outside  drops way down. Gas powered cars fared a little better but still didn’t do that well. For example, a car that normally gets 30 mpg will, when the temperature is 20°F or lower, drop down to 24 mpg during short trips.

The temperature alone isn’t the only reason that an automobile will be getting reduced fuel economy. Some other factors include;

  • Roads that are icy or snow-covered, something that can decrease traction and waste fuel as a car literally spins its wheels
  • Driving slower on ice, snow or slush covered roads. Most cars deliver their best mileage at higher speeds
  • Operating a vehicle for long periods of time in four wheel or all-wheel drive
  • Fluids like oil that have lower viscosity in the cold, increasing friction and the time it takes for a vehicle to reach optimal operating temperatures
  • Power blower fans, seat heaters and defrosters using more energy
  • Lower energy level gasoline blends made for the Winter
  • Warming a vehicle up for an inordinate amount of time

One of the biggest problems that battery and gas powered vehicles have is the battery. When it’s cold a car’s battery is less efficient and thus requires that the alternator run more frequently. In a hybrid vehicle, cold batteries hold less energy and thus limit range and energy efficiency.

There are a number of things that drivers can do to improve their mileage, according to Oak Ridge. These include parking the car where it will stay warmer, combining trips and using an oil recommended for winter driving. Limiting the amount of time that your vehicle warms up is also a good idea, especially when you consider the fact that it will heat up faster while you’re actually driving it.

Then of course there’s the old standby, tire pressure. As the temperature falls, your tires aren’t as energy-efficient and if they are already low on air they become even less efficient because they don’t get an adequate grip on the road.

Hopefully these tips will help you to increase your mileage but, frankly, if you’re really worried about increasing your mpg during the winter it might be just a matter of getting up and moving to a warmer state like Florida, Texas or Southern California. If not, be careful and be safe while driving this Winter.

Kids: A Waste of a Life Insurance Policy

Life insurance for children is widely available, but is it a good investment? Many people purchase life insurance for their children because some clever agent convinced them it was a great idea, but in most cases, such a policy is an unnecessary expense. There are a few central factors that make your kid and most others less than ideal candidates for life insurance coverage.

Your Kid is Unemployed

Life insurance is intended to protect the financial standing of surviving dependents when a breadwinner passes away. Children have a notoriously low work ethic, and many of them are unwilling to even go on a job hunt, let alone maintain a job that makes them the main source of income in a household. Most non-famous children earn very low if any salaries for their work, and although their loss would be emotionally devastating, the lost income would be minimal and household expenses would likely decrease. Visit this link to find out more about what AAMI can offer you and your family.

Your Kid will Outlive You

Another core benefit of a life insurance policy is to provide for funeral costs after death, but children are typically vibrant and healthy, as they enjoy the benefits of a body with very low mileage. While a whole life policy for a child is guaranteed for life, very few people develop conditions that deem them uninsurable before adulthood. Modern medicine and an immune system working at full capacity enable many children to continue living for years, even decades at a time with a bit of good fortune.

A family with a history of illness or genetic concerns may want to consider a policy as a safeguard against future concerns, but the reality is that you are likely to need your final costs covered well before your child does. At the very least, your kid should be alive long enough to purchase a life insurance policy of their own, and rates for healthy young adults are extremely affordable.

Your Kid Can Go to College Anyway

Some life insurance policies are marketed as tools for educational savings. Although it is true that you can borrow against the value of the policy up to the amount in premiums you have paid tax-free, a mutual fund frequently provides the same benefits and much better returns while also having nothing to do with the death of your child. The money you would spend for insurance premiums would be much better used in a dedicated savings or money market account.

As an insurance provider, a child is the ideal choices for coverage. Their young age means a long future of collected premiums, and their good health means that they are unlikely to require a payout for quite some time. As a parent, you are better off investing in your child’s life than their life insurance.

Save money by avoiding these Car Maintenance Mistakes

Compared to the automobiles of just one or two generations ago, today’s modern car needs about as much maintenance as a vacuum cleaner. The problem is, most people still haven’t gotten used to that fact and either continue to ignore their car completely or totally overdo it with maintenance that isn’t necessary anymore.

The simple fact is that the answer to most maintenance questions are actually found in the owner’s manual that comes with every automobile.  If you haven’t taken the time to read yours (and you really should), today’s blog will give you some good tips about avoiding car maintenance mistakes and saving money on your ride. Enjoy.

Tip 1: Taking care of your tires.

One of the easiest, and most overlooked, car maintenance tasks that can easily be accomplished by the average driver is simply to make sure that their car’s tires are always inflated correctly, and that they are rotated regularly. Underinflated tires waste gasoline and both under and overinflated tires wear out sooner. If you have five minutes, checking your tires once or twice a month to make sure they are inflated properly, and having them rotated every six months, is the best way to save gas and replace your tires less frequently.

Tip 2: Wiper blades.

Most people completely ignore their wiper blades, even if they are old, worn-out, damaged and aren’t doing much of a job. Of course, that all becomes much more important when it starts to rain, sleet or snow. Your best bet is to have them checked every time you have your oil changed and, if needed, get them replaced. You really should only need to do this about once every two years anyway.

Tip 3: Tuning up your car.

Today’s new cars are incredibly high-tech and no longer have things like carburetors that need to be adjusted regularly. In fact, most parts can go for 100,000 miles without a problem, so spending money on “tune-ups” is really a waste. Instead you should save your money for the big 60,000 and 100,000 mile checkups to make sure that things like or plug wires, timing belts and so forth are in good shape.

Tip 4: Gasoline grades.

We’ve said this before and we’ll say it again; unless you have a very high-end luxury or sports car, there is almost no need for “super” gasoline. “Regular” will suffice and save you nearly 30% every time you fill up your tank.

 Tip 5: Changing the oil.

It used to be that a car’s oil needed to be changed about every 3000 miles but today’s new cars can go quite a bit further between oil changes. In fact, some can actually go up to 15,000 miles! Follow the recommendations of your car’s handbook and your trusted auto shop to be sure you are not overdoing it with the oil changes.

 Tip 6: Replacing the air filter.

Unless you live in an arid, dusty area of the country like Nevada or Arizona, your air filter can run for years without the need to be replaced. This is something that your mechanic can check when you have your oil changed and, even though a dirty air filter will definitely decrease your MPG, you probably won’t need to replace yours more than two or three times (at most) during your car’s life.

Tip 7: Don’t ignore your brakes.

Simply put, if your brakes sound, feel or respond differently than you’re used to, ask your mechanic to check them out immediately.

Tip 8: Use your garage  to protect your car.

Our final tip is simply this; a car that is kept inside a garage will look better and last much longer than one kept outside. If you have the luxury of a garage but you are not using it because there’s so much junk that your car can’t fit inside, you’re really doing your automobile a disfavor.

When it comes to your car, when is it time to sell rather than get it repaired?

If there’s one thing that can cause a person to become fired up with emotions it’s the thought of buying a new car. On one side there is the fact that a new car is quite the status symbol as well as the fact that it smells nice, looks great and comes with all sorts of new features. (A brand-new warranty isn’t a bad thing either.) On the other side there is the fact that, once you sign that car loan payment paperwork, you are basically agreeing to make some pretty big payments for the next 4, 5 or even 6 years of your life.

Depending on the car that you’re driving now, and your financial ability to pay for a new one, the choice might be quite cut and dried. On the other hand, if what you’re driving right now is still running relatively well, as well as being paid off, the choice of whether to purchase a new car might be a little more difficult. To help you make the decision, we’ve put together a little bit of advice that hopefully will help you. Enjoy.

One of the first bits of information you need to know before you make a decision to purchase a new car is simply this; how long does a car usually last? Today’s modern cars (anything made in the last 15 years) have been engineered to last up to 250,000 miles. What that means is that if your car is 9 years old and has 125,000 miles on it, it probably isn’t past it’s prime by any means. On the other hand, while the major systems in your car might last that long, some of the smaller parts like fuel pumps, timing belts and other things will eventually need to be replaced. Even worse, they might “give out” while you’re on the road, something that can mean a very costly tow-truck bill to your mechanic’s shop.

If you have the financial means to do it and you’re not willing to take the risk that your car is not going to get you from point A to point B, getting a new car might be in your best interest. On the other hand, if you’re not in the position to make big payments every month and your car is already paid off, keeping it well-maintained is probably your best bet.

If your car is starting to get older but is still holding up relatively well, now might be the best time to start preparing to purchase another car. Putting aside the money and making sure that your ability to get a new loan is high are two things you should be focusing on so that, when the time comes, you’ll be ready to sit down at the negotiating table at your local car dealership. Checking your credit report is a good idea at this time to make sure that you can get the best financial terms available. It’s also a good idea to get any maintenance on your car taken care of that’s relatively inexpensive so that, when you take it to trade or sell, it “shows well”.

For some people the fact of the matter is that the car they’re now driving may still be running well and have plenty of years left on it but might not be the car that’s right for their situation. If it’s either too big and wasting lots of fuel or too small for your large family, getting a new car to replace it might either save you money or make long trips with the family more enjoyable. Of course if your current car is unreliable and prone to frequent breakdowns, getting it replaced is probably the best thing you can do so that you don’t miss work or miss out on other opportunities because your car can’t get you there.

At the end of the day, it makes a lot of financial sense to hold onto a car that is running well and doesn’t have a huge amount of miles on it. As long as you keep up on maintenance and don’t drive it too hard, the savings that you will reap could be substantial. Remember that a new car means a new car payment and also that a car is not an investment but an expense. Keeping those things in mind should help you to finalize your decision. Good luck, and good driving!

Tips for Lowering your Gasoline Costs

While gasoline costs across the country have stabilized and, incredibly, even gone down a bit in the last few months, gas is still over $3 dollars a in most states and close to $4 a gallon in some. Now, to be perfectly honest, we’ve written quite a few blogs about how to lower your gasoline costs and increase you are mileage with every tank of gas. That being said, below we’ve put together a few of the best tips that we have so that if this is your first time searching for these types of tips you get some of the best. Enjoy.

Tip 1: Lighten the load. Even as little as five extra pounds of weight in your vehicle can lower your mileage and, unless it’s something that you need for your work, your best bet is to completely clear everything out of your car that isn’t 100% necessary. From extra clothing and maps to bowling balls, fishing gear and even bricks (yes, bricks), that extra weight is causing extra damage to your wallet or purse at the pump.

Tip 2: Catch a ride with a friend or neighbor. You might not know someone who lives close by and works close to where you work as well but websites like RideSearch.com and eRideShare.com can help you to find someone. If they don’t simply Google the word “carpool” and the name of the city or town that you live in and you’re bound to find all sorts of information that can help you. Carpooling will not only save you gas but also maintenance on your car as well as allowing you a little bit of extra time (if you’re not the driver, of course) to get yourself prepared for the day on the ride to work.

Tip 3: Use an app to compare gas prices. There are a number of them but the two best are GasBuddy.com and gaspricewatch.com, both of which are excellent smartphone apps that can show you which station in your town has the best price. If it’s on your way and convenient, you can sometimes save up to $.20 a gallon depending on where you live.

Tip 4: Make use of your car’s aerodynamics. Listen, unless you’re a professional skier or you use your bicycle (street or mountain) more than once a week, there’s no reason to have ski or bicycle racks on your roof all the time. (Yes, they might look slightly “cool” but if you waste gas aren’t you then also a “fool”?) Save money by taking them off.

Tip 5: Get a gas rewards card. If you do a lot of driving you might consider getting a gas rewards card but only with one caveat; you must pay your credit card bill in full every month. If you do then the rewards can be well worth it but if you don’t the extra charges in interest can negate any rewards that you might get.

Tip 6: Consider a four-cylinder engine in your next new or used car. Want to know what uses a lot of gas? A big engine. Yes, it might get you going faster on the highway but seriously, the difference is so negligible in most cases as to make it not worth it unless you’re going to be towing something on a regular basis.

Tip 7: Make sure to maintain your car regularly. Checking the air pressure in your tires is something that you can easily do yourself but things like making sure your oil is good, your transmission fluid is up to snuff and your car is running well in general are things that you’ll have to go to your local mechanic to have done. If you want to save money at the pump as well as on major repairs, there’s no better way to do it then keeping up with your car’s maintenance.

Tip 8: Learn how to coast. While we aren’t fans of turning your engine off and coasting to a stop, something that might be dangerous depending on the type of car that you have, keeping an eye on traffic and taking your foot off the gas so that you coast to a stop while in drive is a great way to conserve gas. The fact is that once your car is moving you’ve already used gasoline to get it up to speed. If you see a stop sign or traffic light coming and you know you’re going to be stopping, what’s the sense of using even more gas to get there? Take your foot off the pedal and simply coast, using your car’s momentum to get you there instead.

And those, dear readers, are some of the best Tips that we’ve come across in the last few years for saving money on gasoline and increasing your MPG. We hope that some of them might be helpful to you and we also encourage your questions and comments.

3 Fuel Efficiency Tips for Winter Driving

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Although petrol prices have recently dropped slightly over the past few months, they are still relatively high in comparison with the rest of the world, and this means that conserving petrol is essential.  Never is this more essential than in winter, when driving is more difficult and more dangerous than in the rest of the year, leading to higher use of petrol or diesel.  Here’s how to be fuel efficient this winter.

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3 – Reduce Your Idling

You might think that in the dead of winter, the best course of action would be to turn your engine on and leave it running for a few minutes before you get in to heat everything up.  Unfortunately, this leads to wasted fuel and shouldn’t’ really be done.  A better way of doing things would be to clear your windows with de-icer, get in your car and turn the engine on.  If your steering wheel is cold, buy some fingerless gloves to make things easier on yourself.

2 – Lose Weight

Vehicle weight is a significant factor to the amount of fuel your car consumes.  This is particularly the case in winter, where a car may take extra time to get moving if there is less surface grip because of the weather.  To minimise these effects, you should lessen the weight in your car. Maybe it is time to acknowledge that it isn’t the best idea to squeeze 5 people into your car for your daily trip to and from work. You could also remove excess weight you taking things out of your boot, and by removing excess roof racks.

1 – Amend or Upgrade

A more extreme solution is to make alterations to your car to ensure it copes better against the winter weather, preventing as much fuel loss. A good example of this might be upgrade the tyres to a set with greater grip to enhance your car’s tyre to road friction, lessening waste.  An even more extreme option might be to upgrade your car entirely for a newer model which is more fuel efficient.  This doesn’t need to be a very expensive task, as there are plenty of sites that offer great deals on second hand cars that can help you beat your fuel problems.

So don’t let the winter driving woes get you down. Use these fuel efficiency tips and you’ll be ploughing through the snow in no time at all.

What’s the story behind low-rolling-resistance tires?

Car manufacturers, especially those who create hybrid cars, pay careful attention to fuel efficiency and look at everything possible to increase it, including combining electric motors with gas engines, the weight of a car, the materials used to make it and also its aerodynamics. In the last few years however they have also devoted quite a bit of time to something that most people hadn’t even thought of; their car’s tires.

Indeed, hybrids have been rolling off the factory floor with “low rolling resistance” tires for a few years including makes from Toyota, Lexus, Ford and Honda among others. All of these carmakers have realized that where the “rubber meets the road” they can actually squeeze out a few extra miles with the right tires.

So what exactly are low rolling resistance tires? In the most basic terms, they are simply tires that are harder than regular tires. They use a harder rubber compound and, due to this, roll easier. With a lowered rolling resistance, most automobiles will thus save fuel because their engine or electric motor will have to work less to keep their car moving forward.

Before rushing out to buy a new set of low rolling resistance tires for your car  you’d best take a little time to understand the advantages and some disadvantages that they have.

Increased mileage is the main advantage of course. The reason car manufacturers are using them on all of their new hybrid vehicles is because of this, but the question is how much will they save you if you put them onto your regular car once your tires have worn down enough that they need to be replaced. It’s been shown that the average automobile will typically increase their MPG by 1 to 2 miles per gallon which, on the surface, it seems to be insignificant but actually amounts to about a $300 savings per year, depending on how much you drive.

One of the major disadvantages to low rolling resistance tires is that, since they’re harder, they also produce a bit more noise on the road and a ride that’s a bit rougher than normal. In some cases they can actually reduce your car’s handling performance and even increase the distance your car needs to come to a complete stop when you’re braking. Most of the major manufacturers are hard at work figuring out ways around these disadvantages.  Keep in mind that some tires are better at solving them than others.

If you already own a hybrid car than you already are enjoying the extra fuel efficiency that these new tires can provide. If you are looking to increase your MPG and possibly by your own set of low rolling resistance tires for your existing car, make sure to do your due diligence and research before you make your final decision. Just like purchasing a set of “regular” tires, low rolling resistance tires aren’t exactly cheap but they can make a big difference in your car’s performance and handling and thus should not be a decision you take lightly.

EPA states that there was a new Car and Truck Efficiency Record for 2012

In the last 20 years or so auto manufacturers have invested a huge amount of money into complying with government regulations that are becoming increasingly strict every year. The good news is that, at least here in the United States, fuel economy and efficiency are definitely on the rise while CO2 emissions are on the decline.

In fact, 2012 marked the best record ever for automobile efficiency as the average mile per gallon rating of new cars was over 23.6, the highest it’s been since 1975 when the EPA actually started recording such statistics. Their latest report indicates that, by 2025, the 54.5 mile per gallon target that’s been set should be met by most car manufacturers with relative ease.

Even better news is that emissions also fell in 2012. The adjusted final model year numbers for its CO2 emissions actually dropped 22g per mile while model year adjusted fuel economy rose 1.2 miles per gallon.

What this means is that in 7 out of the last 8 years the average fuel figures in America have improved and turned around a long-running negative trend that started in 1987 and went all the way through 2004.

The report states that every car manufacturing company had higher fuel economy, with Mazda leading the way at 27.1 miles per gallon. This was no doubt helped by the fact that Mazda sells fewer pickup trucks and SUVs then all other manufacturers. Honda came in second with 26.6, Volkswagen was third with 25.8 and Toyota came in fourth with 25.6. Rounding out the top five was Subaru at 25.2.

One of the reasons for the increase is definitely due to the market drop for light trucks including SUVs, vans, pickups and crossovers. In 2012 they only accounted for 36% percent of new car sales, a figure that dropped from 6% over the previous year. Further helping the increase was the fact that today’s newer vehicles are being designed to be lighter and, indeed, the average vehicle in 2012 was approximately 150 pounds lighter than in 2011.

Further helping the increase is new technology like “stop start” and the fact that smaller cylinder cars with forced induction are taking the place of larger displacement engines. Hybrids and plug-ins, to a small extent, are helping, as well as the fact that diesel engines are now becoming quite popular. In fact, in 2012 there were 5 times as many automobiles that offered 30 miles per gallon over 2011 and 4 times the amount that were offering 40 miles per gallon.

The results of efficiency testing from 2013 won’t be released until almost 2015 but still the EPA anticipates that there will be an increase in miles per gallon of .6 and an associated decrease of carbon dioxide per mile of 6g. For people who are looking to save money on gasoline as well as save the planet, this is excellent news and means that auto manufacturers are working harder than ever to not only meet their emissions goals but actually surpass them.

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