Personal Finance 101 Posts of the Day 5/7/07

• Ask Mr. Credit Card provides a great retirement plan cheat sheet for 2007.
• Make Love, Not Debt talk about how to merge finances.
• Blueprint for Financial Prosperity talks about 5 ways to save money without noticing. I love that he mentioned drinking water. Just make sure it’s water you get from a tap/brita filter otherwise buying bottled may cost more in the long run.
• Consumerism Commentary talks about how much you really need for retirement.
• Personal Finance Advice talks about why he loves not having a car. I agree! I haven't had one for more than 5 years and I love it!
  

Car Sharing: Would it work for you?

John and Queercents writes a useful article about the benefits of car sharing programs.

Those who don't live in a city might not know what this is all about. Basically joy join a service that allows you to rent a car by the hour or more and you pay according to how much you use it. The price includes gas, mileage and insurance and is much easier and cheaper than owning a car in most cities (John has a much better, much more in depth description on his post.).

Personally, while I think these services are useful and much better than owning a car, I don't think they're worth it. Having lived in a city for the last 4 years, I looked into joining Flexcar but decided against it. I ran the numbers and for me, it was too expensive unless I was using the car for 2 hours or less. I can easily rent a car for a full 24 hours through priceline and it will only cost me $25 or so. I probably do this once a month, if that often, and I just save up all the errands that require wheels to perform.

The only times I really wish I had a car for a short time is when I'm grocery shopping. But even with that, if I'm doing a small shop I just use my shopping cart and if I'm doing a monster shop I use peapod or similar. Their delivery charge is less than a car service would be for the time it takes to shop and I find that I spend less because I don't have impulse buys.

They are a great idea though and much better than owning a car in a city. They just aren't the best idea for me.

Personal Finance 101 Posts of the Day 4/16/07

• Everybody Loves Your Money lists the 13 top money saving ideas of all time.
• Frugalist lists 15 ways that being frugal makes you happier, healthier and sexier.
• The Digerati Life explains how much a car really costs.

Personal Finance 101 Posts of the Day 3/29/07

• Free Money Finance asks: Does having control of your finances make you happier?
• Money Walks talks about saving money by buying in bulk. I'm a big fan of buying in bulk but only if you're going to use it. A good way to get around this, especially if you're single, is to shop with a group of friends and split the take. Then you all get to take advantage of the savings.
• My Money Blog talks about lazy investing (which I'm a huge fan of!).
• The Simple Dollar talks about asset allocation and rebalancing.
• Learn why you shouldn't buy a new car (and definitely don't finance one!).
• Punny Money gives us a list of the 20 dumbest personal finance questions of all time. Now personally I'm a "there are no dumb questions" kinda gal, but I'll admit that I've been asked some questions that are...less than smart.
• 3 Debt Consolidation talks about credit ratings and FICO scores.
• The Digerati Life talks about spending money on looking good.
• Personal Finance Advice talks about how we waste money when we think we’re saving.

Personal Finance 101 Posts of the Day 3/19/07

• Raising 4 Boys gives great suggestions on how to handle allowances.
• Story3girl wonders what money’s for.
• Getting Green talks about payday loans.
• Ask Mr. Credit Card talks about why buying a used car was a good idea.
• The Skilled Investor reminds us not to rely on past performance when choosing investments.

The 5 biggest financial mistakes new graduates make

Graduation is an exciting time and you’ll probably experience more changes during the 6 months following graduation than at any other single time in your life. For many people it’ll be the first time you’ve had a full-time job making good money (you hope), the first time you’ve lived on your own, the first time you’ve lived in a different state (or country) and the first time you’ve been in complete control over what you’re going to do with your life. It’s a stressful time but also exhilarating.

Unfortunately, with the first blush of freedom, both personal and financial, many grads jump into situations without fully thinking them out. Below are 5 of the worst mistakes new grads make and hints on how you can avoid them.

1. Ooh, pretty, sparkly

It’s understandable, you’re finally receiving real pay checks, you have a shiny new job and it just makes sense to have a shiny new car to match. Unfortunately, financially speaking buying a new car is one of the worst decisions you can make. Most new cars depreciate 25% or more within the first year which means that you’ll be stuck paying full price for something that went on sale 10 minutes after you purchased it.

Instead of buying a new car it’s a much better idea save your money for a few months and pay cash for a used car. A 3-5 year old car can look just as nice as a new one and can cost half the price. If you really think that buying a new car is the way to go, do yourself a favor and try it out first. For 12 months, put the amount of your car payment into a savings account each month. Don’t forget to include the extra money that you’ll pay for the higher insurance coverage which you’ll need with a financed car.

If, after a year, you are able to easily save for retirement, pay your bills in full and on time and still make your ‘car payment’ then go for it. Use the money you’ve saved over the last year as a down payment on the car that you want. However, what you’ll probably discover is that the $400/month car payment that seemed so easy to make isn’t quite so easy now that you’re paying on student loans, credit cards, utilities, entertainment and all of the other expenses you may never have had. It’s usually about 6 months into the new car loan (when those student loans start coming due) that most new grads begin seriously regretting their purchase.

2. The super sized apartment with a side of furniture
3. The employee’s new clothes
4. Retirement? I’m only 23! I’ve got plenty of time!
5. Credit, credit, who’s got good credit?