When it Comes to Your Finances, Plan in Advance

College students have many things that they often blow their money on, such as hitting up clubs and eating out. Avoid this temptation, and take charge of your finances so you can avoid getting into debt.

Protect your finances by ensuring you have the proper medical insurance policy. You never know when you will need a doctor. For this reason, it is important to be covered. Doctor and hospital bills can quickly add up. Bills of this nature can ruin you financially without health insurance.

To maintain control of your money, avoid incurring debt at all costs. Some debt will be unavoidable, like student loans and mortgages, but credit card debt should be avoided like the plague. If you borrow as little as possible, you can avoid paying costly interest charges.

Rebalance your portfolio every year. Re-balancing will help your investments remain aligned with risk tolerance as well as goals. It also forces you to track your investments.

No person desires eviction or foreclosure. To improve your finances, look into a place where the rent or payments are cheaper. Being evicted because you are unable to pay off your mortgage would be a worse outcome. Take action about your living situation before you are in serious trouble.

If you want to make the most possible, make education a priority. People that graduate from college and get a Bachelor’s degree can earn up to twice as much money as dropouts and people that graduated from high school. Higher education is always a good investment.

Learn about and use flexible spending accounts wisely. You will save money with your flexible spending account if something were to happen where you incurred additional bills. These accounts allow you to put a certain amount of pretax dollars aside to pay for such expenses. Consult a tax professional to find out what kind of expenses qualify for this account.

If you are thinking about buying a new house, you should build your credit score to begin with. You can either pay back your small loan or get two cards with the balance. You need to pay your card as a whole on all of your bills.

While a new job may come with a larger salary, it could also come with a move to an area that has higher living expenses. Look into the cost of living when you are considering a job that will require a move to a new place.

Carry a small envelope with you wherever you go. Your envelope should be used to store items such as business cards and purchase receipts. Keeping your receipts is a good idea, since they provide records of your transactions. It will be good to have them on hand, so that you can verify all the charges on your credit card statement and contest any that are incorrect.

Think about a home-based job that can help save your money. It’s probably costing you a lot to go to the office. By spending money on gas and going out for lunch, you could end up spending a third of even half of your paycheck prior to even getting it.

To make things a little easier, utilize tax planning. Take a look at the investment opportunities that are available to you through your employer so that you can put your money into qualified plans. Make sure you set aside this money for your medical bills. If your employer offers to match your contributions to a 401(k) plan, make the most of the opportunity. Try your best to make the most of your money.

Make a shopping list in tandem with your monthly budget so that you won’t end up going deeper and deeper into debt. These tools can help you live within your means. Use the information in this article wisely and you can stay out of debt forever.

A Simple Guide to Savings and Investments

If you’re interested in making your money work for you, you’ve probably considered a savings or investment account. Before you commit to a traditional savings or an investment savings account, you’ll need to consider the benefits and drawbacks of each.

Savings

Your savings interest rate is set by the bank and will vary by account type and institution. Interest rates on savings accounts are not usually very high. In most cases, the less money you have in your account to start, the lower the rate you’ll get. Some financial information websites have savings rate comparisons available so you can shop around.

With a savings account, you deposit your money and earn interest back. Your money is not exposed to risk, so you won’t have to worry about the impact of the financial market.

Since you know the rate of return, you can accurately estimate your savings progress. Tracking your savings is particularly helpful if you’re saving for a specific expense, such as a home purchase.

Investment ISAs

As with traditional savings accounts, you deposit your money into an investment savings account. You might have to deposit a set amount upfront or be allowed to make payments into the account, depending on the bank.

Your money will be invested in different funds. The funds are composed of stocks and shares that are grouped together by expected performance, rate of return and risk level.

For example, if you’re investing in a long-term fund, the fund is made up of stocks and shares that are expected to provide returns after a longer period of time. Higher risk funds usually have a higher expected rate of return but expose your money to more danger.

Unlike a traditional savings account, your money isn’t safe in an investment ISA. You can lose money from the account at any time, depending on the performance of the funds your money is invested in.

The trade-off for the increased risk in an investment ISA is the possibility of a higher rate of return than the interest you’d receive on a traditional savings account. If your funds do well, you can earn significantly more money than you would with a traditional account.

One vital question you must answer when you’re deciding between a traditional savings and investment savings account is how much risk you can take with your money. If you’re trying to save for a specific expense you know is coming soon, an investment account probably isn’t the best option for you.

On the other hand, if you can tolerate risk and want a higher return on your money, an investment ISA is probably a better option than a traditional savings account. Whatever you decide, check the account types and rates available at different banks before committing to an account.

Michigan Lawmakers Prepare to Fight Possible Proposed Fuel Economy Standards

fuel economy standards, michigan fuel economy standards, white house fuel economy standards

Why can't we seem to figure out this gas mileage stuff?

Despite having a large portion of their state’s economy saved by the Federal Government’s auto bailouts, lawmakers in Michigan are preparing to express concerns and discontent over the White House’s rumored new fuel economy standards.  In case you’re not already aware, it is believed the White House will push CAFE standards to 56.2 miles per gallon (mpg) by 2025, nearly doubling today’s standards.

In an article entitled “Michigan Lawmakers Prepare Letter on Fuel Economy Rules”, published in the Detroit Free Press, Aaron M. Kessler writes:

It currently remains unclear whether the letter will specifically take on the 56 m.p.g. target by 2025 that the White House wants, or raise more generalized concerns.

As the Free Press reported Tuesday, Michigan’s congressional delegation gathered this morning to decide whether to publicly join the fuel economy debate. Michigan’s members of Congress had mostly remained silent in public as the negotiations have continued in recent weeks.

While this article seems to be rather ambiguous, if you read between the lines it’s obvious to see that the Michigan lawmakers will oppose the large raise in fuel economy standards, mostly because they will be inconvenient to some of the largest businesses in Michigan.

You see, state and local governments are not immune to being “persuaded” (read: in bed with) corporations, and will do whatever is in the company’s best interest.

Despite the fact I believe simply raising the fuel tax would achieve a greater reduction in fuel consumption, I’m still all for raising fuel economy standards.  Unfortunately, it appears that Michigan lawmakers will take the stance of going with neither.

What are your thoughts?  Should Michigan lawmakers oppose?  Are you tired of our governments putting the best interests of corporations first?  Leave your comments below or share this post via the social sharing buttons – especially Facebook and Twitter.

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Fuel Economy vs. Fuel Taxes – Which Will Do More?

fuel taxes, fuel economy, obama administration fuel economy

Which is better, higher fuel economy or higher fuel taxes? Image via Wikipedia

Here’s an interesting question: which is more likely to make you use less fuel, forcing you to buy a more fuel efficient vehicle or forcing you to pay a much, much higher fuel tax?

This is sort of a relevant question because there is news that the Obama administration is considering raising fuel economy standards for all cars and trucks sold in the U.S. to 56.2 miles per gallon by the year 2025:

The Obama administration is considering a fleetwide average of 56.2 miles per gallon for all new cars and trucks sold in the US by 2025, The Wall Street Journal reported late Saturday citing two people briefed on the matter said.

The proposal would roughly double current fuel-economy targets, and would likely raise the price of some cars by several thousand dollars.

Read more of this Fox News article by clicking here.

2025 is certainly a long way off, these new standards are certainly worth debating in the meantime.

While I think most of us would be willing to argue that reducing fuel consumption is certainly something we need to do, there are arguments that simply raising fuel economy standards isn’t the best way to go about it.

In an interesting article entitled Fuel Taxes vs Fuel Economy: Are Stricter Fuel Economy Standards a Good Idea? by Ed Dolan (published on OilPrice.com), it is argued that raising fuel economy standards tackles only a small portion of the problem:

The problem with higher CAFE standards is that they encourage fuel saving only with regard to the choice of what car to buy. Once a consumer buys a low-mileage vehicle, the cost of driving and extra mile goes down, thereby reducing the incentive for fuel-saving measures like moving closer to work, working at home, riding the bus to work, or consolidating errands.

The very fuel-saving strategies that CAFE standards discourage, like moving closer to work or consolidating errands, are often the ones that have the lowest costs. That is why the total cost of reaching a given national fuel-saving target will be greater when achieved through CAFE standards than when induced by an increase in fuel taxes.

If you’re a fan of economics, studies in spending habits, or just interested in the topic, I highly recommend you read the article in its entirety.

Anyway, in looking at this side of the argument, I think I would have to agree with Dolan.  Think about it, in order to get the biggest environmental bang for the buck you need to fundamentally change people’s driving habits.  You’re not going to do that by increasing fuel economy standards.  That’s painless.

The only way you’re really going to invoke substantial change is to cause pain, particularly pain in the wallet.  That’s why a dramatic increase in the fuel tax would mass a larger reduction in fuel usage and pollution than simply raising fuel economy standards.

Yes, I realize this is a so-called “regressive tax” meaning it affects the poor far more than the wealthy, but, as heartless as it sounds, I don’t think that should stop politicians from moving forward with a fuel tax increase.

What do you think?  Which is more apt to bring bigger changes?  Leave a comment below and be sure to spread the word using the social buttons below.

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Daily Fuel Economy Tip Isn’t Going to Suck

Just a quick post to apologize for how badly Daily Fuel Economy Tip has sucked the last several months.

Because I had become so busy in my regular day-to-day life, I subscribed to an auto-post blog service that, as you are well aware, posted stuff that was far below even my standards for writing.  I have erased all posts and plan on getting back to what made Daily Fuel Economy Tip a great site that you liked to visit.

I’ll be getting back to why the site was originally created – to bring you news and ideas about fuel economy.

Thanks for putting up with the site for the last several months.  I promise I’ll make it up to you!

What Sort of MPG do Reindeer Get?

If you’re anything like me, you’ve gotten a late start on your holiday shopping. In an attempt to help you avoid the crowded malls and shops, wandering around searching for gifts, I’ve come up with three gifts that would be great for any interested in getting the best fuel economy out of their vehicle.

Scan Guage IIScanGauge II – This 3-in-1 compact multifunction vehicle computer with customizable display will show you your real-time gas mileage and cost per mile, in addition to acting as a diagnostic scan tool.

This devise works on all 1996 or newer OCDII vehicles, requires no special tools for installation, and fits pretty much anywhere in the vehicle.

So, if you or someone you know is interested in testing out different ways to increase your gas mileage, this gift would be perfect!

Garmin Nuvi GPSGarmin Nuvi with Traffic Updates – The average driver could cut their carbon footprint by 21% and reduce their annual commute by four days by using a GPS with real-time traffic updates.

This particular Garmin Nuvi 780 model has a 4.3 inch display, gives turn-by-turn directions and has the option to receive traffic updates from MSN.  And the best part?  It’s currently priced at 75% off!

Gas Mileage BibleThe Gas Mileage Bible – As if the tips on Daily Fuel Economy Tip weren’t enough, this book will provide driving and car maintenance tips that could help to increase your vehicle’s gas mileage by up to 30%, with very little effort on your part.

Obviously, this isn’t an all inclusive list, but if you’re looking for great last minute gifts, any of these will be sure to bring a smile to any fuel economy enthusiast’s face!

What are your thoughts?  If you’re a gas mileage enthusiast, what do you want for the holidays?  If you’re giving gifts to a fuel economy freak, what are you planning on giving?

Per the new FTC regulations, the above links are affiliate links, and I will receive a small commission should you purchase any items after clicking the link(s).

Driving a Fuel Efficient Car is Attractive

With all of the gloom and doom surrounding the economy, the housing market and oil and gasoline prices, it’s understandable that so many of us feel so pessimistic right now.

But, if you drive a car that gets great fuel economy, you now have a reason to smile: it’s very likely that the opposite sex now finds you more attractive than ever!

What, you don’t believe me? Check out the following (very non-scientific) reasons why you’ve gone from the little nerd that couldn’t to a fuel sipping sex symbol:

It shows you’re a modest person. By driving an unassuming and fuel efficient car, you’re letting everyone know that you don’t need to be flashy or loud in order to get noticed. Your calm, quiet, easy on the accelerator demeanor has definitely gone a long way to show the opposite sex that you’re quite a catch. Almost a quiet confidence.

It shows you’re not wasteful. Why use two gallons of gas to go 10 miles, when you can get the job done with just a quarter-gallon? You’re all about efficiency – and that’s why you’re so good looking.

It shows you’re good with money. Not only does it usually cost less to buy a smaller car, but over the time you own the vehicle, you’ll probably spend a lot less on fuel, tires and insurance. With that money you save, you can splurge on gifts every once in a while, or have plenty of cash on hand for a rainy day.

It shows you care about the environment. Obviously, this is the very in thing right now – if you’re not “going green” there’s no telling how far you’re likely to fall down the social food chain. And let’s be honest, nobody wants to be with the low person on the totem pole.

It shows you don’t have to make up for shortcomings by overcompensating and buying a flashy sports car or big truck. No further commentary is necessary.

For those of you who drive gas guzzling monster trucks or suped up sports cars, it’s not too late to redeem yourself in the eyes of the opposite sex. You can always keep your current vehicle, but just drive it less and walk/use public transportation more, or you can trade up and get something with a little less zip and a little more sip.

$4 Gas – A Look Back

Now that the average price for a gallon of regular unleaded gasoline has finally hit the $4 mark, I figured it would be a good time to reflect on how far our perspective regarding gas prices has changed over the last year or so.

On May 30 of last year, I asked Daily Fuel Economy Tip readers to predict where they thought gas prices would be in one year. Just less than half of the respondents – 49% to be exact – said that gas prices would be at or above $4 a gallon. The remaining 51% predicted prices would be less than $4 a gallon. At the time of the poll, the national average gas price was roughly $3.10 per gallon.

Then in late December of last year, again, I asked if Daily Fuel Economy Tip readers expected gas prices to climb above $4 per gallon during 2008. Not surprisingly, this time, the percentage of respondents expecting $4 gas climbed. In fact, 71% of respondents said they expected $4 gas, and an additional 11% stated they were unsure if gas prices would break the $4 mark. At the time of that poll, the national average gas price was roughly $3 a gallon.

Finally, in early March of this year, as the price of gas was on the verge of shattering its all-time high, I again asked Daily Fuel Economy Tip readers how certain they were that 2008 would see $4 gas. The results were very much in line with the December poll with 51% of respondents saying they were 100% certain of $4 gas, while an additional 31% of respondents said $4 gas was likely. At the time of this poll, the national average price was roughly $3.20 per gallon.

So, here we are now, a week into June 2008 and we’ve finally crossed the $4 mark and “validated” the beliefs of those of us who saw this coming nearly a year ago.

Inevitably, the question will now turn to “when do you expect to see $5 gasoline?” Unfortunately, it’ll probably happen a lot sooner than any of us expect or would like.

Gas Officially Hits $4 A Gallon

The day that we’ve all dreaded, yet have come to accept, is finally here – this afternoon, the national average price for a gallon of regular unleaded gasoline crossed the $4 mark for the first time.

Upon hitting the $4 mark, gasoline is now 27% more expensive than it was a year ago; 34% higher that it was at the beginning of the year; and 11% higher than it was just one month ago.

There are now 13 states and Washington, D.C. reporting gas prices in excess of $4 a gallon. Currently Alaska is reporting the highest prices at nearly $4.45 a gallon, while South Carolina is bringing up the rear at $3.75 a gallon.

It now appears that most Americans have finally reached their breaking point with gas costs. Despite our complaints at both $2 and $3 a gallon, most American drivers didn’t really change their habits or their vehicles in order to deal with rising fuel costs.

However, now that we’re well past $3 gas and will probably see prices stay above $4, it’s clear that most American drivers are finally now being forced to change their driving and purchasing habits. Here are the two prime examples:

First: the Federal Highway Administration recently released data showing Americans drove 11 billion fewer miles this past March when compared to the data for March of a year ago. While that amounts to only a 4.3% drop, it’s still the first such drop in recent memory.

Second: The Ford F-150 has finally been knocked from its perch as America’s best selling vehicle – a title it had held since 1992. The vehicles that moved ahead of the truck? The Honda Civic, the Toyota Corolla, the Toyota Camry, and the Honda Accord. Sensing a theme here?

So, in the end, $4 gas may not be such a bad thing, especially if it forces us to worry about fuel economy and conserve the gasoline we have left.

It’s Time to Raise the Federal Fuel Tax

Over the last several months, there has been a lot of talk regarding what the Federal government should do to help ease the sting of high gas prices.

The discussions have ranged from creating a gas tax “holiday” where the federal fuel tax would be suspended during the busy summer travel months, to cutting oil shipments to strategic oil reserves – which actually was recently implemented.

While much of the dialogue has revolved around helping to ease the short term pain caused by rising gas prices, most of the “solutions” that have been kicked around Capitol Hill don’t help to solve the long term problems created by the ever persistent energy – specifically, oil and gasoline – crisis.

So, instead of just chastising our legislators and their inability to deliver a viable solution to our current problems, I’ve come up with a simple plan that will cause only minimal short term pain, but in the end will help to create a long term solution:

  1. Raise the federal fuel tax from 18.4 cents per gallon to 50 cents per gallon.
  2. Impose a $2,500 sales tax on all vehicles sold that do not average at least 28 mpg.

Based on a price of roughly $4 per gallon, the current federal fuel tax accounts for 4.6 percent of the total price of a gallon of fuel. By raising the federal fuel tax to just 50 cents per gallon, the tax would still only account for 11.4 percent of the total price of a gallon of gasoline.

That’s still well under what most citizens of Western European countries pay, who, in some cases face nearly 20 percent fuel taxes. These high fuel taxes are a large reason why fuel consumption has either flat-lined or decreased in most European nations over the past two decades.

Now, I’ll be the first to admit, I’d rather keep my own money than hand it over as tax revenue. I’m sure you’re the same way. However, that’s the point of the matter. It’ll hurt to lose that money. Therefore, I’m willing to bet you’ll probably find ways to drive less.

That means the tax is doing its job!

In addition to helping us curb our fuel usage, the increased fuel tax would be a tremendous revenue boost for the Federal government. Americans currently consume just under 400 million gallons of gasoline each day, so by increasing the federal fuel tax 31.6 cents per gallon, the government would raise an extra $50 billion per year.

Just think what could be done with that extra $50 billion in tax revenue. What if half of that was explicitly earmarked for alternative and sustainable fuel/energy research? It seems to me that we’d find a solution to the problem a lot faster than our current snail’s pace.

The remainder of the tax revenue could then be earmarked for improving public transportation – like expanding and better subsidizing local subway (urban) and bus systems (both urban and non-urban).

This is a fair tax because it is essentially a pay as you use tax; the more fuel you use the more taxes you pay.

Along the same lines, the $2,500 tax for vehicles designated as “gas guzzlers” would also be a fair tax (after all, you choose what you drive), despite the fact that it’s in essence a double-whammy. First, you pay the tax for simply purchasing the fuel inefficient vehicle, and then over the vehicle’s lifetime you pay more in fuel consumption taxes simply because you’re probably going to be using more fuel.

To make the gas guzzler tax a little more fair, it would be implemented in some sort of step process. That way, if your car comes close to meeting the 28 mpg standard – let’s say you buy a car that averages 25 mpg – you’re not penalized the same as someone who buys a vehicle that gets single digit fuel economy.

Again, I know nobody likes to hear the phrase “raising taxes” but in the end, I believe this will be the cure for what ails us. As we adapt to the higher prices we will make the necessary changes required of us to become more energy efficient. We’ll drive less, buy cars with better fuel economy. And, the byproduct of our short-term pain at the pump will be improved public transportation and alternative, sustainable and cleaner sources of energy.

I think we can all live with that.

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