Picture this: you’re parked in a stop light, humming the latest hits, when your car suddenly whinnies and stills to a stop. You’re not an automobile expert, but this feels bad… this feels expensive. You might be faced with the all-consuming question, “Do I need a new vehicle” We’ll give you the pros and cons; and let you decide which step to take.

Money

Your first step should be to compare the fuel economy of your current car with that of the vehicle you are considering to purchase. Fuel economy of a vehicle is the relationship between distance traveled and the amount of gas consumed by your ride.

Get An Estimate

As your car gets older, the repair costs increase as well. So take your car to a mechanic (not a dealer — they almost always overcharge for repairs) and get an estimate of the repairs. Check if there is a way to make it cheaper. Can the transmission be fixed instead of changed? Can any old parts be salvaged? What other pricey repairs will you have to make in the future? Do the repairs exceed the cost of purchasing a new vehicle?

If your bills exceed a years’ worth of car payments, you can consider purchasing a new ride.

Trade-ins

When most people buy a new vehicle, they’re replacing an old one. If this sounds like you, you should decide whether you want to trade your old car at the dealership or sell it on your own. Selling it on your own means that you’ll have to arrange for test drives, ownership transfer, and complete all the paperwork yourself. If you take it back to the dealership, you might not get nearly as much as you would from a private buyer; but you will get the money hassle free.

Buy used

Statistics show that a new vehicle loses 15-25% of its value every consecutive year. If we assume a 20% depreciation, and you buy a car for $40,000, it might be worth only 32,000 in 2 years. On the other hand, if you buy used car for $20,000; you would lose only $4000 by the second year. Keeping these calculations in mind, it might make sense for you to invest in a used car.

Safety

The safety basics your car must have include airbags, electronic stability control, and forward-collision warnings. You don’t have to spend big bucks on a blind-spot monitoring or automatic braking, but if your car is lacking a few safety features; you should probably consider the safest car that fits your budget.

Conclusion

When you’ve decided that it’s time to replace your ride, spend some time going through your monetary situation rationally. Always remember to take in account the operating costs of your vehicle; and say goodbye to that new-car envy!

The post Do I Need A New Vehicle? appeared first on The Budgeting Babe.

It’s easy to think about debt as a sort of deal-with-it-later type of problem. Or you may think of it as simply being a product of economic forces beyond our control.  But what if the way you think about debt is actually part of the problem?  Not only are there myriad fallacies out there about debt, its effects, and how one can escape it, but overspending can be caused by off-base priorities, unreal expectations, and the way you value different forms of payment.  What’s more, when it comes to paying down debt and altering spending habits, at least half the battle is mental.  With that being said, here are five tips for dealing with debt by tackling the mental side of this problem.

Evaluate what’s “necessary”

The biggest issue that many people face in trying to curb overspending is forgoing certain luxuries that have grown to be thought of as necessities.  The bottom line is that not everything we buy is needed, and when faced with a choice between stress, costly interest, credit score damage, even a lawsuit and giving up a few luxuries, scaling back is certainly the way to go.  You should therefore first rank your expenses in order of importance and then start adding them up starting with the most integral until the sum reaches your monthly income.  Anything below this threshold should be cut.

Stick to your budget

Step 1 already involves writing down your budget, which can be very helpful in eventual follow-through because things just seem more real when actually written out.  People can easily justify overspending though, which means you might need some additional discipline.  Simply depositing your paycheck into your checking account and only making purchases with your debit card is a good option because if you end up having to use your credit card, you’ll know you’ve spent too much.  This will get you in the habit of only spending what you have so that when you ultimately switch to the optimum strategy of using a rewards credit card for everyday expenses, you won’t have anything to worry about.

Segment expenses

If, for whatever reason, you have decided to use a credit card instead of a debit card, separating your debt from your everyday expenses will help you more easily evaluate and manage your spending habits.  When you designate one credit card as being only for everyday expenses, you know that its balance should be paid in full every month.  If ever finance charges find their way onto this card’s statement, you’ll know you’re spending beyond your means and need to adjust.  You’ll also be able to garner the best possible rewards since you won’t have to worry about this card’s interest rates.  Designating another card as being for debt will allow you to focus on finding the 0% credit card with the longest introductory term.

Understand that not all debt is equal

In addition to addressing the problem of overleveraging (i.e. spending more than you bring in), it’s important to pay down what you already owe.  Too often, people with more than one credit card balance or debts with multiple lenders make equal monthly payments to each of their obligations.  This approach will cost you in interest charges.  You see, your debts likely have different interest rates and you should strive to pay down those with the highest rates fastest.  That means making minimum payments on all but your most costly debt until it is paid off in full and then applying this strategy to the rest of what you owe until you’re debt free.  It’s important to note that if you have multiple balances on the same credit card, only the amount of your monthly payment that is above the minimum will be applied to the balance with the highest interest rate.

Be aware of a “play money” mentality

People often spend more with plastic (e.g. credit cards, prepaid debit cards, gift cards) than they would ordinarily because handing over a card is easier to swallow mentally than handing over cold, hard cash.  While certainly more abstract, money spent with a card is no different than physical currency, and you should strive to treat it as such.

Unfortunately, it seems that credit card debt is on the rise.  U.S. consumers added nearly $17 billion in credit card debt during the third quarter of 2011 alone, which is 154 percent more than they racked up during Q3 2010 and 58 percent more relative to the same time in 2009.  This merely underscores the need to take the above steps so that we can avoid a double-dip recession.

The post Get Out Of Debt By Changing How You Deal With It appeared first on The Budgeting Babe.

Where did these green money saving tips come from?

I have a friend who was a hippy. A real honest to goodness, dope smokin’ tune out to tune in, sex, love and rock and roll, 1960’s era hippy. Then she grew up. And got sober. Most of those original hippies did grow up, get sober (at least mostly), finish college and join the establishment in one form or another.

However, many of them hung on to certain principles that were popular at the time and helped found what is today known as the “green movement.” Along with them came the animal rights movement, environmental activism, vegan ism, and other sometimes seen as far left ‘isms, frequently depicted by “the right” as crazy, way out on the fringe, “treehuggin’ whack jobs. Usually with the help of some extremist whack jobs doing something crazy that makes headlines.

You can sometimes recognize the original hippies when you see them in public, the retro fashion preferences and Birkenstocks or the ponytails behind receding hairlines are dead giveaways. These are the folks that, even though they may have achieved varying levels of professional and financial success are into organic food, natural fibers, sustainable gardens, bio-dynamics, green building and other ideas designed to lower resource consumption for the benefit of a healthier planet and a sounder economy.

These however aren’t the people we need to key into

Unfortunately, these aren’t the people who need to be sold on “green.” It’s people like myself. A normal, middle of the road sort of consumer, who will not sacrifice my entire lifestyle to spend 10 times as much money on a meal that doesn’t taste good just because all of the ingredients are organic and come from sustainable farms owned by the cutest, kindest, mom and pop farmers in the world. That is just the reality of the situation.

What’s more, I am likely to become quite the cynic about “green washing” in advertising once I recognize the insincere patterns in terms like “all natural.” For creeps sake, arsenic is “all natural” but that doesn’t make it good for me.

We ARE getting better, but we still have a ways to go

We have proven in recent years that we  are willing to spend a bit more for choices that are healthier for us and our children. It’s unfortunate that in pursuit of profits, advertising spin will continue to make it difficult to determine which things are healthier and thus worthwhile expenditures for us, our planet and future generations.

Those folks that are on the opposite side of the fence, that refuse to see that conventional economic wisdom was unsustainable in spite of all the evidence like the current global recession, will do their best to muddy the waters even further. There will continue to be those that refer to environmental concerns and sustainable solutions as “tree hugging” in that derisive snort that implies some kind of pinko-commie plot from the cold war era and belongs in the insult category of all the notorious narrow minded terms of yesteryear that have, with time and common decency, fallen out of favor with mainstream human beings.

As individuals, it makes perfect sense to lesson our individual footprint, from both a global perspective and a personal finance view. For instance:

• Using public transportation when available costs less and is more efficient than driving alone in your car. Carpooling is another example. Buying a used car that gets great mileage is a third.
• Walking or riding a bike when possible, rather than driving a car at all, saves money, lowers pollution and benefits your personal health.
• Buying produce from a farmer’s market or participating in a community supported agriculture program can mean healthier food on your table, is often less expensive and usually lasts better than food that is loaded with pesticides and preservatives to help it travel the 3k miles across the country to your supermarket, lowers carbon emissions from long distance transport and helps support local business which helps your local economy. It helps to remember that you are putting this stuff in your mouth. It might be worth it to buy the kind that isn’t covered in poison.
• Limiting purchases of electronic gizmos to those you will use in business and/or add some significant meaning or benefit to your life, rather than buying a bunch of stuff that collects dust in a closet after a few weeks will save you money. And perhaps lower the demand for cheap plastic and electronic things made in China, whose factories contribute to pollution effecting the air everyone is trying to breathe.
• Composting for your own garden will save you money for fertilizer, recycle waste from your kitchen, save irrigation water (again saving money) and help provide beauty to your surroundings. Beauty that has meaning for many people and offers benefits to the local ecosystem, as well.

• Shopping for furnishings, décor and other items at thrift stores and from Craigslist will save you money, offer unique, high quality purchases and reuse perfectly good, sometimes quite valuable, already produced goodies that don’t need to end up in a landfill as another example of consumer waste.
• Donating the stuff you no longer use or need can benefit those less fortunate, keep it out of the local landfill, contribute to community recycling efforts and as a result benefit the environment.
• And last, but probably most…getting a handle on your personal spending, by monitoring your finances daily, living below your means and maintaining a budget will not only help you to save money, it will teach you to lower your own level of waste and recognize the areas where you have practiced your own brand of conspicuous consumerism. For my part, when I was faced with this reality, my own carbon footprint lowered exponentially, but not because of my passion for the environment (though that helps.) Nope, it was because my habits had proven over and over again to be as unsustainable as our collective global approach to economics and resource management has been and since I can’t change the world, I opted to change my little piece of it.

Maybe, if enough of us choose sustainability, it will become mainstream in a real sense rather than as just another marketing tool and our world can become a nicer place to live for everyone.

The post Money Saving Tips That Are Actually Green appeared first on The Budgeting Babe.