missions accomplished

Since meeting our last financial goal, we have chosen to take a break from paying extra toward our debts. Instead, we have met three other goals. They may not seem huge to all of you responsible types, but for the three of us who are relying on one income (and that income was gone for two months this year, remember?), each one is a pretty big deal.

Goal #1: Have $1000 in savings. This is, of course, one of the first steps toward financial responsibility, because it means having a cushion to fall back on in case of emergencies. It’s been a tight year, and it’s so good to have that cushion there again.

Goal #2: Have the money for next month’s expenses before the month begins. It is amazing what a relief it is to not be living paycheck-to-paycheck or even two weeks out. Today I am able to look November square in the face and have no qualms about the expenses it will bring.

Goal #3: Open a Roth IRA. This one is the most exciting for us. We have met the other goals before, but this one has been hovering beyond our grasp for years. Almost a decade! I can even remember talking about it together just after we finished high school. But there is always some other way to spend that nice plump chunk of money that it takes to open a retirement account. It was actually quite hard for me to resist putting the extra money toward my student loan during these last few months of saving! But we did it. Tonight we opened a Roth IRA. Hurray!!

Published in: on October 27, 2009 at 12:06 am  Comments (7)  

saving on vehicle expenses (part two)

Beyond driving reliable older-model cars and keeping them in good condition, we have found a few other ways to save money on our vehicles in the month-to-month expenses. One large expense is vehicle insurance. This is worth shopping around for, and we do that periodically to make sure we are still receiving the best rate. For us, that has meant insuring with GEICO. If you’ve never shopped around for insurance rates, I highly recommend it. The amount you save is well worth the time you spend.

A note on insurance rates: you can save a lot by going with higher deductibles. When I insured my first vehicle (an ’86 Jeep, which we still own and which is now our secondary vehicle), I paid an extra $30 or so each month to have a $250 deductible. This was on a rattly, dented old Jeep, mind you! There is no need for a deductible that low unless you have a brand-new vehicle and are obsessive about each tiny scratch. We don’t and we’re not, so we save money by sticking to a $1000 deductible. And with a different insurance company and perfect driving records, we pay much less per month now for two vehicles than I initially did for one.

Another basic way to save on vehicle expense is by doing all our own maintenance. Or by Keith doing all our own maintenance, as the case may be. Keith washes the car, changes the oil, changes the air filter, and does whatever other maintenance work that may need done. When our ignition stopped working last year, he found the part we needed from a junkyard for something like $25 (versus the $150 or whatever that would be charged at a parts store) and then did the labor himself. He has worked on our muffler and other little things here and there. When our car stopped running a few months ago, he found a $2 part for the battery connection that did the trick.

Some of these maintenance matters are ones that I couldn’t do without Keith, but many of them are things anyone could do. It doesn’t take long to learn how to be able to do the basics on your car. If you don’t know how, ask someone to show you, or find a tutorial online.

In the areas where we can’t do our own maintenance, we shop around. Having bought tires from Les Schwab, they always switch our tires for free when we need to transfer to winter tires or back again. When we needed our windshield replaced, we ended up getting one for half the price that most places charge. Don’t assume that just because three places charge a high rate, there won’t be a fourth or fifth with a lower cost. An extra ten minutes getting quotes on the phone can save you a few hundred dollars or more on repair work.

We’ve learned a few things about saving on gas, too. We use an American Express card for gas purchases, so we get 4% back. (We still use our credit card for non-optional expenses like gas.) We go to the cheapest gas station, either Costco or Fred Meyer. And last but not least, we drive the speed limit. Or less. Shocking, I know.

Driving the speed limit didn’t begin as a money-saving venture. For me, it was a conviction about obeying the law. But I now find it incredibly satisfying to set my cruise control at 65 and watch the other cars cruise by, knowing that I am getting better gas mileage and am at absolutely no risk of getting a speeding ticket.

In addition, I recently read an excellent article which explained the financial benefit of driving the speed limit. I won’t go into it all here, but here’s one excerpt: Your hourly earnings from driving 65 instead of 66 is $36.50. Not even factoring in the possibility of increased insurance rates for getting a speeding ticket, it is just plain expensive to speed.

These are all the ways I can think of  in which we try to save money on vehicle expenses. Do you have any other suggestions?

Published in: on October 2, 2009 at 10:28 am  Comments (2)  

saving on vehicle expenses (part one)

I’d love to say that our primary vehicle is a shiny new Toyota Prius that gets 46 miles to the gallon. It is in pristine condition and completely paid for. Ah… doesn’t that sound nice? But the reality is that our primary vehicle is a ’97 purplish Toyota Camry with more than 191,000 miles on it. And while it’s not exactly in the pristine condition of my dream car, it’s true that we make no car payments (and never have, actually, as it was a gift from Keith’s parents).

Every now and then I have found myself coveting a newer car. Besides the basic greed issue involved in that, here are things of which I remind myself over and over. First, we make no car payments. Second, we have a much nicer vehicle than most of the people in the world. Third, it’s reliable.

On the reliability factor, let me note this. It is always, always, always worth buying a vehicle that rates highly according to Consumer Reports. (If you don’t have a subscription to CR, you should get one. It is an incredible valuable asset in all kinds of purchasing situations.) The Camry is one such vehicle which has for years stood out as one of the most reliable vehicles on the road, and it has been completely true for us. We have put about 100,000 miles on our Camry in the last six years, and we have invested little into it besides gas and oil and the occasional minor maintenance work.

I know people who in the same time period have put tens of thousands of dollars into less reliable cars and with not much to show for it.

I once had a co-worker who drove a Volkswagen Jetta, a vehicle known for being unreliable. He drove his Jetta to work, I drove my Camry to work. His Jetta looked cooler than my Camry. But my Camry always made it to work, while his Jetta broke down on the way to work more times than I can remember. Consequently, I was seen as a more reliable employee, and I received the promotion for which really only the two of us were eligible. I’m not positive if being 2-3 hours late to work once or twice a week was a part of him not being considered for the job, but I kind of think it was.

Reliability counts.

I know of many other friends who have bought not-especially-reliable cars which ran great for a while, but after a year or two began to need so much additional work that they have paid far more than the cost of the cars in repair work… just to keep it going!

It doesn’t have to be that way.

Given the rapid depreciation of new vehicles, it is more than likely that we will consistently buy vehicles that are five years old and drive them for another five years or so. Given the age of our Camry, that would mean we are due for a vehicle upgrade in the next few years. For the present time, though, our Camry is still running great, and so we expect to drive it until an increase in household members requires a vehicle with more room for carseats.

Published in: on October 1, 2009 at 11:33 am  Comments (6)