TodayForward

Save Hundreds Annually with a Junk Email Account

Spam assaulting your inbox is bad.  Advertising that motivates you to make unnecessary purchases is even worse.  So why would we want you to open yourself up to thousands of email that are, for all intents and purposes, spam?  Easy, it will save you hundreds of dollars annually.

Not Your 'Real' Inbox

A junk email account is the best way to keep your 'real' inbox clean, healthy, and functional.  By creating an email account that is used exclusively as a spam collector, you'll be able to stay spam free with the email you use on a regular basis.  In addition, since it's outside of your regular mail account, you won't be checking it regularly - helping to keep a lid on unnecessary expenses.

Setting Up Your Junk Mail

If you use gmail, go to Yahoo!; if you have Hotmail, look into gmail.  The bottom line is you want to setup your junk mail account with another service provider altogether so you can segregate the good from the bad.  In addition, if you use Outlook or another service to consolidate multiple email accounts, don't bother and certainly don't try to hook this junk mail into your mobile phone.  Keep it simple; keep it web based; keep it at a distance.

Register Where You Shop

Wherever it is that you like to shop, start registering your junk email account everywhere you can.  The basic rule is to register anywhere and everywhere that you might spend money in the future.  Many of these websites will immediately send you some kind of a discount offer for registering with the site (though you're not obligated to go out and take them up on their offers).  Once you're registered, you'll start receiving regular emails with a wide variety of savings coupons, discounts, notices of sales, etc.

Here's the Trick

To actually save money instead of being induced to spend more, you should only check your junk mail when you need to spend money on something.  If a birthday is coming up and Macy's would do the trick, go into your junk mail and find the latest coupons and savings (by the way, we're convinced that Macy's has a sale 365 days each year as their 'sale' signs never seem to come down).  The most important thing to remember is to buy only when you need to and not just because there is a sale.

No Discount, No Problem

As you may have heard, the old adage of 'paying full price for something you need is better than getting 50% off of something you don't need' is an important one to remember.  If you need to go buy something, check your junk mail for a discount, but if there isn't one, no problem.  Buying something you need without a discount isn't ideal, but it's not as bad as wasting money on stuff you don't need.

Maintaining Your Spam

Since nothing in your junk mail account is really necessary, you can go in periodically and clean it out without fear of losing anything important.  About once every month or so, go in and delete anything that is more than 30 days old.  This way, the offers you have in your inbox will stay current and the amount of spam you're looking at will be manageable.

Wrapping Up

If you take some time to create a spam account and use it wisely, you can easily save hundreds of dollars each year with the coupons, discounts, and special offers received throughout the year.  The best part, of course, is your personal email will remain uncluttered and you'll still receive the full benefit of promotions from your retailers of choice.  Just remember to use your spam account only when needed because marketers are experts in sucking you into a sale.

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Saving Money on Auto Insurance - The #1 Way to Save is to be a Better Driver

We all have our pet peeves when it comes to driving that can range from getting cut off to someone driving entirely too slow on the interstate.  While these serve to annoy us, there is also a financial component to these kinds of behaviors (and no, driving 15 mph below the speed limit is not safe or careful driving).  When we look at auto insurance, there are commercials galore that extol the virtues of one insurance company over the other when it comes to price, but the reality is that if you want to save a lot of money, you need to be a better driver.

Risk Dictates Price

Just like any form of insurance, the level of perceived risk is the number one factor in determining the premiums that will be charged.  If you're a smoker, you can expect to pay more for health, disability, and life insurance.  If you're a bad driver, you will pay a small fortune to the insurance company for the pleasure of driving (and wreaking havoc on other drivers along the way).  To pay the lowest premiums - to save serious green - you need to be a low risk for the insurance company.

Ways to be a Better Driver

For whatever reason, some people simply are worse drivers than others.  Reasons for this range from being overly aggressive to the more common - being careless.  With the latest issue being texting and driving, the studies don't lie.  Distracted driving is extremely dangerous, and as we're pointing out in this post, the added insurance costs are painful as well.

To help you become a better driver, there are dozens of ways to lower your risk profile and your insurance premiums.  The most common are commonsense:

1. Pay Attention - Texting?  Super bad idea.  Talking on the phone?  Not good.  Pointing at landmarks?  Distracting.  Staring at drivers next to you?  Creepy.  Driving a panel van and delivering a death stare to drivers next to you?  Scary.  Look, you already know this, so turn off the phone, stop pointing out landmarks while swerving (we naturally drive toward our line of sight), and please, don't stare at other drivers.
2. Observe Traffic Laws - Ah, the law.  We generally try not to break the big ones, but traffic laws are all too often ignored.  If you've never read a state provided book on traffic laws, pick one up.  You'd be surprised, but there are things that can also help you get around faster (like turning left on red at one way to one way intersections).
3. Scan the Road - We always liked the expression, "You gotta watch out for the other guy."  The problem is that most of us fail to scan the road for possible danger around us because we're focused on getting from point A to point B.  Take the time to look around and avoid trouble when you see it happening.
4. Be Patient - When it comes to rush hour, you're better served being patient.  Changing lanes in horribly slow traffic is unlikely to result in any significant time savings while seriously increasing your odds of being in an accident.  Settle down, and you'll be better for it.
5. Think Ahead - If you need to get off the interstate in a half mile, being in the far left lane on a five lane highway is not thinking ahead.  Of course, you see it all the time where someone isn't thinking ahead and winds up screwing up traffic or worse, causing an accident.  This goes back to the first point - pay attention.

Wrapping Up

While there are other ways to save money on auto insurance, the #1 way to save is to be a safer driver so you will be a lower risk to the insurance company.  There simply is no other way to save that offers as much value as taking the time and investing in being a better driver.  Plus, we'll all be happier that you're not the 'other guy' ruining our commute.

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Pricing Anomaly - When One-Off Prepaid Phones Beat the Big Boys and Save You Money

In researching mobile phone options, a surprising anomaly came to our attention - prepaid mobile phone plans were significantly less expensive than those offered by larger carriers.  Keep in mind that we weren't just looking at talk time, rather, we were looking for the company that offered the best talk, text, and web pricing for various demographics.  While the major carriers dominated the family plans portion of the market, one-off carriers offered some eye popping savings for those on individual plans.

About One-Off Carriers

The four most well known one-off carriers are Cricket, Boost Mobile, Tracfone, and Virgin Mobile.  You may or may not recognize these names, but each offers some form of nationwide service on a prepaid basis that actually runs on one of the major carrier's networks.  In other words, these companies sell service running on much of the same hardware as what you will find from AT&T, Verizon, Sprint, or T-Mobile.

The operative word in that last sentence is 'much'.  The services offered by prepaid companies often are subservient to the services afforded their 'regular' customers.  As an example, with Sprint's 4G network, prepaid services will likely continue to run on 3G for some time to come.  Put simply, you may not get all of the latest enhancements offered by the big boys on a one-off company's service.

But...

You can save a bundle of cash.  For our comparison, we'll pick the least expensive deal that we could find on a plan from Virgin Mobile USA.  Their least expensive plan was $25 per month and included 300 minutes of talk and unlimited text and data.  Comparing similar plans, Virgin Mobile USA customers are saving a bundle over the major carriers:

Carrier	Monthly	Annual
AT&T	$44.99	$539.88
Sprint	$41.99	$503.88
T-Mobile	$34.99	$419.88
Verizon	$64.98	$779.76

In the comparisons above, we listed savings compared to similar plans.  For example, Virgin Mobile USA offers 300 minutes whereas AT&T offers 450 and T-Mobile comes with 500.  While these differences are important if you use your phone to talk quite a bit, our major concern was finding the least expensive service that still had talk, text, and web.  Based on this research, a Virgin Mobile USA customer is paying between $419.88 and $779.76 per year less than someone on a similar plan through a major network.

For Whom is Prepaid Right?

As mentioned at the outset, major carriers continue to rule in the family plan segment.  In addition, prepaid phone carriers typically offer less-than-best bells and whistles, so iPhone and Droid loyalists will need to go elsewhere.  The net result is that prepaid phone service is best suited to those that meet the following criteria:

1. Individual Plan
2. Minimal Talk Time
3. Unlimited Text
4. Unlimited Data
5. Willing to Give Up a Few Bells & Whistles
6. Want to Save Money

Wrapping Up

To be frank, we were shocked that an unlimited data plan with any voice minutes would be available for $25 per month, let alone one with nationwide coverage on a 3G network.  What this shows is that if you take the time to look carefully, you can sometimes find a pricing anomaly that you can take advantage of.  In this case, savings of up to $779.76 was found.  Not bad for 30 minutes of shopping.

NOTE:  We've road tested the Kyocera Loft phone (the least expensive option offered) with the Virgin Mobile USA plan discussed in this post.  The phone works well, connects with gmail and Facebook easily, and the service is satisfactory (not much coverage in rural areas off the interstate).

***TodayForward does not accept revenue from advertisers***

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Shifting Resources - Save Money on Energy with an Audit

Anytime we look at cutting expenses, we're actually talking about shifting your resources from one area to another in an effort to spend less on something that gives you less satisfaction to something that will give you more.  In this post, we'll look at a simple way to save money on energy so you can take the savings and put it someplace that will serve you better.  Let's face it.  Energy is necessary to an extent, but we'd all rather spend it on vacation instead.

Home Energy Audit

The fastest and surest way to save money on energy is to conduct a home energy audit.  While you might think this would require some sort of expertise, it doesn't.  In addition, many gas and electric companies offer free home energy audits on their websites with a few even giving you some energy saving products for taking the time to do one (like energy-savings CFL bulbs).

The purpose of an energy audit is to see how you're using energy and find ways to reduce your usage.  There are many variable that include the type, size, and age of your home, what type of lighting and electronics you use as well as the energy efficiency of your appliances and heating and air conditioning.  Regardless of your particular setup, the energy audit will find ways to help you reduce your energy consumption which will, in turn, save you money.

From Your Energy Company

To find out if your energy company offers a free audit, go to Google and type in the name of your energy company followed by the words 'home energy audit' as shown above for Duke Energy.  The search results should show your company's home energy audit link on the first page.  When you see it, click through and start your online audit which should take between 5 and 15 minutes to complete.  If you can't find it, you can go to your company's website or use the one provided by the government detailed in the next paragraph.

From the U.S. Department of Energy

The DOE has a similar setup to what you'll see at an energy company's website.  One of the things that we like about this audit tool is the recommendations list the estimated payback time for any investment you'll need to make and ranks them accordingly.  It's a simple three page form, and you'll need to click on the 'Upgrade' tab and then click 'Recommendations' when you're finished to get the details.  Click here to use the DOE home energy audit tool.

How Much Will You Save?

The simple answer is 'it depends'.  When you look through the recommendations, you will see some very inexpensive or even free ways to reduce your energy consumption that will generally lead to a savings of 5% to 10% of your annual energy expenses.  However, to maximize your savings, you will often need to make some type of cash investment in upgrading appliances or making other improvements to your home.  This will be up to you as to how much you're willing to invest to save money on energy.

Our Take

What we advocate is that you take all of the 'cheap steps' to reduce your energy usage like fiddling with the thermostat, installing CFLs, turning the lights off, and generally being more aware of your energy waste.  The more significant investments generally pay for themselves over time, but we always recommend paying cash for these improvements as interest on loans (even tax deductible ones) can significantly increase the payback period and add risk to your financial life.  Either way, do the little things first and then move up to the larger ones.

What is Opportunity Cost?

When we think of what something costs, the most common number that comes to mind is what's listed on the price tag.  Unfortunately, this is only the nominal cost and doesn't fully represent what we're paying for a particular product or service.  To understand what we pay for a particular item, we must also take into account what else we could do with this money.

Opportunity Cost Defined

According to Investopedia, opportunity cost can be defined as, "the cost of an alternative that must be forgone in order to pursue a certain action.  Put another way, the benefits you could have received by taking an alternative action."  We'd say that's not a bad definition, but certainly not crystal clear either.  For this reason, we'll use a couple of examples to get a better understanding.

Example:  Going Back to College

With a rapidly changing job market, many are considering going back to college to pursue a new or better career.  The cost of this is usually whatever tuition, books, and fees will amount to.  However, that's just the price tag and not the opportunity cost.  Let's consider Susan as an example.

Susan is working in an administrative capacity and earning $35,000 annually.  She would like to go back to school to obtain an undergraduate degree in business management under the belief that she would be able to move into a management position and make approximately $50,000 each year.  She will require only two years of school (she's already obtained a 2-year degree) that will cost $30,000 for tuition, books, and fees.

During this time, she will not be able work.  What is the cost of her education?

The simple answer is $30,000 for her college expenses.  However, she is also giving up working that will cost her $70,000 in lost wages.  As a result, the total opportunity cost is $100,000.

The next logical question is, "How many years will it take to get break even?"  Using relatively low interest costs and inflation, it would likely take her seven years to be as well off as if she had continued to work at her lower paying job.

Obviously, this example is dealing with rather large numbers, but what about some of the everyday choices that we make?  Do they have opportunity costs associated with them as well?

Example:  An Expensive Dinner

Kevin and his wife are foodies and spend around $400 each month eating out at fine restaurants in their area.  This is one of their favorite activities, but they're also saving exactly zero dollars each month for their five year old son's college education.  Though they've repeatedly stated that funding his education is a major priority, they have yet to set any money aside.

In this example, Kevin and his wife have placed a higher value on eating fine cuisine than on their son's college education, but what is their opportunity cost?  To determine this, we need to know what they could do in saving for college versus eating out.

The nominal cost is $400 per month, but the opportunity cost is significantly greater.  To calculate the cost of not saving for college, we would need to make some assumptions about where the money would be saved, how it would be invested, what rate of return would be achieved, what inflation would look like, and so on.  To make it simple, let's assume the following:

• $400 could be placed in a 529 plan
• A balanced investment portfolio would be used
• Average returns would be 8% annually
• The money would be invested for 13 years
• Inflation would be around 5%
• The money would be withdrawn tax free per 529 plan rules

If this is the case, over the course of one year, the opportunity cost would be $6,922 compared to the $4,800 they're spending on dinners out.  To put this as plainly as possible, their choice to eat out instead of set money aside for college costs them $6,922 each year.

Why is it so much more?  The answer to that has to do with the fact that they are spending money on something that has no value after it is spent whereas with investing money for college, the money can grow based on the investment returns.

Opportunity Cost Re-Defined

Earlier, we gave you a definition from Investopedia, but after running through these examples, let's state it in more familiar terms.  Opportunity cost is best defined as the total cost of your next best option.  We all have limited resources and virtually unlimited choice.  What you need to do is consider what something costs and how alternative choices stack up.  When it comes to buying something that has no lasting value compared to something that will grow over time, you have to really enjoy what you're buying to make up for the difference in opportunity cost.

In our examples, if Kevin and his wife are a happier couple because of their dinners out, maybe that's enough to pickup the difference in cost compared to funding college for their son.  If Susan will be made happier by going to school and quitting work, maybe it makes the seven year payback less of an issue.  The bottom line with this is we all have to make choices, but taking a serious look at opportunity costs will generally give us the best outcomes.

Wrapping Up

As we've stated earlier, the study of economics is all about maximizing our happiness and satisfaction in life.  Knowing your opportunity costs can help you make better decisions in allocating your time and money which will lead to a greater sense of happiness and satisfaction.  If you fail to count the costs, odds are good that you'll wind up feeling the pain from your choices.

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How to Avoid Paying 'Stupid Tax'

If you read the 'stupid tax' stories on DaveRamsey.com, you'll find that it comes in many shapes and sizes, but what can you do to avoid paying it?  Is there some kind of formula or set of rules you can put in place to save yourself a lot of financial grief later in life?  In this post, we'll explore answering the question of, "how to avoid paying stupid tax."

It is Inevitable

First, let's be straight about stupid tax:  you will pay stupid tax at some point in your life and it is almost guaranteed that you will do it many, many times.  With that statement, you might think trying to avoid stupid tax is a fool's errand, but the reality is that your goal should be to limit the amount of stupid tax you pay rather than completely eliminate it.  Trying to avoid it altogether will only create added frustration, so acknowledge that it is part of life and let's get moving in reducing the amount you pay over your lifetime.

Stupid Tax = Buyer's Remorse = Cognitive Dissonance

Sometimes the best method for reducing stupid tax is to consider what stupid tax really is - buyer's remorse.  Wikipedia defines buyer's remorse as "the feeling of regret after a purchase".  Sure enough, when you recognize you've paid stupid tax, you will invariably experience buyer's remorse.  This is usually followed in short order by cognitive dissonance.

While you might not be familiar with the term, cognitive dissonance occurs when you have two differing ideas in your head that you then set about to rationalize.  The problem is that once you've experienced buyer's remorse, rationalizations will abound in your mind telling you that you didn't really pay stupid tax.  Eventually, these rationalizations reach an end and you simply accept that you've done something stupid with your money.

What's great about knowing the last couple of paragraphs of information is that you have a better understanding of the psychological process of stupid tax:  (1) pay stupid tax thinking it's a good idea at the time, (2) realize that maybe it wasn't such a good idea and buyer's remorse sets in, (3) rationalize why it wasn't so 'stupid', and finally, (4) accept that stupid tax was indeed paid.  By knowing this, you'll more quickly realize when you've paid stupid tax which can help you avoid paying it in the future (How does that saying go?  Once bitten, twice shy?).

Simple Strategies to Avoid Stupid Tax

There are countless tips and tricks that could be presented here, and feel free to tell us yours in the comments section, but what we've found that works best are a few simple strategies as follows:

1. Sleep On It - when making a financial decision, take your time and sleep on it.  There are very few times when you need to make a snap decision, and putting more time between you and the decision is one of the best ways to reduce your stupid tax.  The bigger the decision, the more time you should take to consider the potential costs and benefits.
2. Inject Objectivity Ahead of Time with a Plan - most bad decisions are made in the heat of the moment and that's why our first strategy was to sleep on it.  However, there are some decisions that are very emotional in nature - e.g. buying a new home, purchasing a car, reacting to the stock market, etc.  When these bigger decisions come up, it's extremely helpful to have a plan in place ahead of time.  This means setting hard limits on what you will pay for a home or car and having an investment policy in place that details your plan when the market is hot or not.  By putting a plan in place before an emotional financial event, you'll be better served.
3. Find Your Brand of Objectivity with a Third Party Advisor - if sleeping on a decision doesn't work and you don't have a pre-fabricated plan in place for a financial decision, seek out the advice of a third party advisor that fashions your brand of values and logic.  When you're emotional, you're not the same person.  Often, we can give advice to others far better than we can counsel ourselves.  For this reason, if you're facing a major decision, it's worth taking an hour or two to consult with a third party (preferably someone with expertise like a fee-based Certified Financial Planner).
4. Expand Your Knowledge and Analytic Skills - the best, and most time consuming, way to avoid paying stupid tax is to get educated about a particular subject.  If you're looking at buying a house, it's a good investment of your time to understand real estate, the national market, your local market, and what constitutes a 'good buy'.  Realtors are famous for being crafty salespeople that play on emotions, but there is a segment of these folks that really enjoy teaching real estate.  Find one of these folks and have them teach you what you need to know before you go out to look at houses.  This is true in many areas.  Some investment advisors are salespeople, some are numbers nerds, and others are teachers.  If you learn what you need ahead of time, you'll be far less likely to do something stupid.

Wrapping Up

Again, we all pay stupid tax (this writer included), and it is very difficult to eliminate from our lives.  However, recognizing it and employing some simple strategies will ultimately reduce the amount you pay over the course of your lifetime.  How much money will these simple strategies save you?  Who knows, but even if it stops you from wasting money just once, your time reading this article will have been well spent.

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Stupid Tax Calculator Plus Investment Opportunity Cost

In our previous post, we introduced the concept of 'stupid tax' that has been popularized by Dave Ramsey.  Rather than keep this as a nebulous idea that reminds us of some of the stupid mistakes we've made with money, let's take it a step further and actually count the costs.  You can download our Stupid Tax Calculator by clicking the links below that are in Excel (.xls) and Open Document (.ods) formats:

Excel:  Download Stupid Tax Calculator
Open Document:  Download Stupid Tax Calculator

The reason we decided to offer this calculator to you is because it is an extremely helpful exercise to see exactly how much you paid in stupid tax, say in 1999, and what that is worth today after adjusting for inflation.  Taking it another step further, we also include the investment opportunity cost which is the amount of money you would have today if the money had been invested in a portfolio at a given rate of return.  These two numbers - inflation adjusted stupid tax and the investment opportunity cost - don't necessarily go away over time.  They get bigger.

This reality means that you could hypothetically comb through your entire financial life from start to finish and figure out how much you've paid in stupid tax.  For many, it will be a substantial sum.  Regardless of what your numbers come out to, the point of the exercise is to avoid paying stupid tax in the future.

How to Use the Calculator

When you open the file, you will see two worksheets on the bottom tabs.  You need only look at the first worksheet entitled 'Assumptions and Inputs'.  From there, here is the step by step:

1. Enter Your Assumptions - Here, you'll lay the groundwork for the calculator by entering the current year, inflation rate, and investment rate of return.  We've defaulted these values to historic averages for inflation and a balanced growth portfolio.  Feel free to change them as you see fit.
2. Enter Your Stupid Tax Events - Under the assumptions, you need to enter each of your stupid tax events by inputting a description, the estimated cost, and the year in which it occurred.  This is so the calculations will be accurate in adjusting for inflation and investment returns over the proper time period.
3. Stupid Tax in Today's Dollars - Knowing that you paid $1,000 in credit card interest 11 years ago is one thing, but adjusting it for inflation is another.  In this column, you will see what your stupid tax would equate to in today's dollars.
4. Investment Opportunity Cost - The previous column tells you what your buying power could have been today after inflation, but this column shows you how much you would have if the money were invested.  The further out from the time of the stupid tax event, the greater this number (and the queasier you'll feel).

Wrapping Up

We're not big fans of crying over spilled milk, which is what this exercise can lead to.  However, looking back at past mistakes and learning from them is a critical component to becoming smarter with your finances.  As you go about handling your money in the future, it's always a good idea to ask if you'll later be counting an expense as stupid tax later.

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What is Stupid Tax?

The grand master of debt elimination is Dave Ramsey and one of the terms he has introduced to the world of personal finance through his book, The Total Money Makeover, is 'stupid tax'.  While the exact definition is somewhat of a moving target, stupid tax can generally be defined as:  (1) anything that cost money, (2) created some form of pain, and (3) later was discovered to be a stupid decision.  Note that it's the third part that makes stupid tax difficult to avoid because going into a purchase or other financial transaction, most of us will believe we're making a good decision.  Only later do we realize our error in judgment.

It doesn't matter who you are, you either have paid or will pay stupid tax sometime in your life, but it's worthwhile to educate yourself and try to avoid it altogether.  To be an expert in any subject, it has been said that you need only know the pitfalls and avoid them.  When it comes to stupid tax, the greater your expertise, the less you'll have to pay.  

In an upcoming post, we'll walk you through how to calculate stupid tax as well as the most common ways to avoid paying a heaping ton of it.  Until then, if you're looking for a little schadenfreude fix or just want to read more about it, click here to go to DaveRamsey.com where readers have posted their stupid tax stories.

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Myth: It's Cheaper to Buy a New Car than Keep Fixing My Old One

 Where do these myths come from?  We'll answer that later, but for now, let's dispatch with this myth post haste.  We've all heard it, and maybe you've uttered words similar to that above, but the truth of the matter is that it is almost always cheaper to fix an old car than it is to buy a new one.  Here's why:

New cars cost a lot of money to buy, old cars are paid off

Now that's post haste.  Actually, this post was inspired by a very well written article from Jamie Page Deaton at U.S. News and World Report.  In the article, a detailed look at the math of this myth is given with a cost comparison between a used versus new Honda Civic - one of the most popular cars on the road.

Click to read the article, "How to Tell When It's Time for a New Car"

Why the Myth Lives On

The math in Deaton's article shows that keeping the old Civic could save as much as $2,763 over the course of a year.  So why does this myth persist when the cost savings are so obvious?  That has everything to do with psychology.  Everyone likes newer, better stuff, and cars are no exception.  When an aging car becomes troublesome or costly to keep running, the idea of a new car sounds even more appealing.  As a result, we find ourselves rationalizing how a new car could save us time, money, and aggravation.

Cost-Benefit Analysis

Now, we're not forwarding the idea that we should all drive our cars until the wheels fall off and the transmission and engine blow up, but taking a look at the cost-benefit analysis before major repair bills start cropping up is a good idea.  By doing the cost-benefit analysis ahead of time, you'll be less frustrated and in a better frame of mind to make a well-informed decision.  The key questions to ask are:

1. At what point should I replace my vehicle?  Should it be at $1,000, $2,000, $3,000 in repair bills?
2. What will my replacement vehicle be?  What size vehicle do I need?  Will it be new or used?  How much will it cost above my expected repair bills?

Answering these questions will involve some numbers crunching and some qualitative evaluations, but they should lead you to better understand when, in fact, it is time to replace your vehicle.

Personal Transportation Policy

After going through this exercise, we also suggest that you establish a personal transportation policy.  This is a general philosophy, or policy, on how you'll handle buying, maintaining, and eventually disposing of your automobiles.  A relatively balanced, inexpensive policy (similar to what might be expected of millionaires surveyed for the book, The Millionaire Next Door) might look something like this:

• Buy only used cars that are three to four years old
• Drive the car for at least five years or until annual repairs exceed $2,500
• When it's time for a new car, donate the old one to charity

While the above is a conservative, inexpensive policy, let's compare that to a more costly one:

• Buy only new cars because they are more reliable
• Drive the car for three years or until a more desirable new car is available
• Trade-in the old car for a new one

You might not believe it, but the difference in these two policies amounts to a few hundred thousand dollars over a lifetime - the equivalent of a private, four year college education.  The reason we bring this up is so you can put the costs of transportation into perspective.  When putting together your personal transportation policy, you must also consider the broader landscape of your finances.

Wrapping Up

You should have learned that buying a new car is nearly always a more expensive proposition than maintaining an old one.  In addition, figuring out your philosophy on transportation before major repair bills start piling up will help you make better decisions.  Finally, cars cost money and as such, the costs and benefits must also be compared to other financial needs.

Critical Thinking

• Over the rest of your life, how much would $1,000 invested annually at 8% be worth?  What if you adjusted your deposits for inflation?
• Where do factors beyond 'getting from point A to point B' rate compared to other financial goals such as retirement, travel, or paying for college?
• All vehicles have an owner's manual with a slew of scheduled maintenance.  Is it possible that when a string of repairs comes up, that it isn't a sign of the car falling apart, but is the result of ignored scheduled maintenance?
• Valvoline recently offered a 300,000 mile engine-life guarantee on any vehicle that had regular oil changes performed at its 'Instant Oil Change' shops.  What does this tell you about the common belief that cars only last 100,000 miles?

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How to Save Money, Shave Strokes, and Improve Your Physique This Golf Season

 What if we told you that walking eighteen at the local links could accomplish all three?  Would you believe it?  Okay, maybe you think it can help, but how much of a difference can walking actually make?  Read on to find out.

Save Money

We're based in the Cincinnati Metro Area and there are plenty of municipal courses to choose from.  The Cincinnati Recreation Commission operates several courses in the area and one of its better courses, Glenview Golf Course, charges $41.50 for 18 holes and a riding cart over the weekend.  To walk 18 holes, you would save the $13 cart fee and pay a mere $28.50.  This equates to a 31.3% savings or, to put it another way, riding in a cart will cost you 45.6% more than simply walking.

If you only go out once or twice a year, maybe it's not a big deal, but what if you hit the links 10 or 20 times each year?  At this particular golf course, you'd be paying an extra $130 or $260 each year, respectively.  Maybe for some of you this isn't a big deal either, but we think an extra $260 would be a nice bit of money to put towards the next, latest, greatest driver next year, right?

Shave Strokes

Okay, maybe the money issue hasn't convinced you, but if you love the game and want to card the lowest score possible, this one's for you.  Golfers who walk instead of ride post lower scores - period.  According to research conducted by Neil Wolkodolf, Director of the Rose Center for Health and Sports Sciences in Denver, golfers using riding carts carded three more strokes per nine holes than those walking the course using a pull cart.  In other words, by walking and using a pull cart, you can shave an average of six (6) strokes off your round.

Why such a difference?  It comes down to pace and time.  By walking a course, golfers have more time to consider the next shot, and a kind of rhythm is developed that results in lower scores.  Besides that, if you want to play like the pros, you can't be zipping around in a cart.  The PGA demands you walk!

Improve Your Physique

Beyond the money and scoring benefits, walking is obviously good for your body.  In the Wolkodolf study, riding in a cart resulted in walking about a mile whereas walking the course equated to five times more walking at five miles per round.  This equates to 1,436 calories burned by walking versus only 822 using a riding cart for a net difference of 614 calories.

Granted, 614 calories isn't a huge difference, but over the course of a season, it represents about two (10 round per year) to four pounds (20+ rounds per year) in fat burned each year.  Considering the average American is putting on between one and five pounds annually, walking instead of riding could be the difference between overweight and obese in your later years.

Here's to a Better Season through Walking

With The Masters this week, it's a perfect weekend for golf.  As you now know, walking the course carries some significant benefits that we hope you'll cash in on.  So here's to another great season of golf...walking style!