I just got back from Portland last night on business and I learned several things about life and finances that you would not expect to learn from Portland.  Its a nice city, lots of trees, too many clouds.  Well ok so the lesson really didn’t come from Portland or the business part, but the traveling part.

Whatever you do, do not buy a car that has been used as a rental car.  I really don’t care what kind of deal you think you are getting, it is not a deal.  I read an article just now in between writing this sentence and the last sentence that said a good way to save money on buying a car is to buy a used rental car.  I am going to go ahead and say I disagree 100%.

This weekend my colleagues took our rental car jeeping (it was not a jeep, but rather a charger) and did some road testing.  It was all in good fun and didn’t harm the car, but we were mild compared to some of the stories I have heard.  Allow me to give some examples of things I have heard:

-car being thrown into park while on the highway going 60
-car being jumped (over a variety of things)
-blatant disregard for speed bumps, humps, traffic calming devices and sometimes curbs. Late braking, hard accelerating, off roading, overloading, and every form of general abuse you’d never inflict on your own vehicle
-driving with parking brake engaged
-use your imagination
Now, you might argue, only a minority of people play around with rentals and an even smaller minority severely abuse them and that may well be true but the truth is even just the normal wear and tear on those cars is unbelievable.  99% of all rental cars lives have been spent purely in stop and go traffic (the worst kind of miles for cars) and many of them at one point have had a user that severely abused them.

The car being under warranty is no promise that it wont be totally hosed 2k miles out of warranty.

And by hiding money I mean from yourself. I am great about paying bills, doing my investments, etc but one thing I am aboslutely terrible at is golf. No just kidding, Im getting a lot better at golf, what I am actually referring to is setting aside money into a saving account. This is why I absolutely LOVE having an ING account. If I keep it in my wells fargo account which I dilligently track I am often tempted to transfer it back from my savings into my checking and invest it, spend it, or otherwise not have it around anymore. This leaves me with an interesting problem. I want to save some cash but I do not want it readily available. Luckily for me and other savings avoiders I have come up with a solution. Actually its a pretty simple solution.

Open a savings account at a different bank.

Yeah I know, its not exactly Einstein solving mass to energy conversion but it works nonetheless. My personal suggestion is open an ING savings account. With ING I have it automatically withdraw money every paycheck so I never even see the money. If I wanted to transfer the money I would have to log in to ING, and manually transfer it back to wells fargo. This little thing alone is enough to kill the temptation.

Added bonus: You get WAY better interest at ING than you do with a standard bank checking account. So basically I get to kill three birds with one stone. Now open an account there right now. (see link in my sidecare).  If you open an account with $250 we both get a bonus too!

Saving money on gas, who doesn’t want to? For those of you who have a nice balanced budget, the rising gas costs mean more and more of your salary goes straight down into the gas tank. I’m going to put good odds on your HR department not giving you a raise just to cover the costs of your commuting, though that’d be nice and all. So what are the options you have?

1) Ride the bus
2) Bike to work
3) Carpool
4) Hybrid car

These are great options if they are available or feasible…the problem is these options are often unavailable. How many people have buses, subways, or carpools near them. These are also inflexible. Biking to work is great, if you live close enough and have the time…but many don’t. Hybrid car is a little better but they can be expensive, harder to maintain, and won’t necessarily promise great gas mileage.

I have another option, but its not for the timid. Buy a motorcycle. I know, the personal finance readers might not be the most likely to go running out and buy a motorcycle, but hear me out on this.

The average American will spend $1700 this year on gas to commute to work. At an average of 3.20/gallon that means the average American filling up an average of 531.25 gallons. With the average fuel economy being 17 miles/gallon that means we are commuting 9031.25 miles back and forth to work every year. So follow my logic here…the average motorcycle gets 35-60 miles per gallon. For this purpose lets use 49 mpg. So lets divide that those 9031 miles by 49. Instead of 531 gallons of gas, that is 184 gallons per year. Multiply that by $3.20 and that is $589. So total saved is $1111.

I have a ’79 Honda 450CMT as shown to the right. It is a smaller half cruiser and I have neglected it for the past year or so, but with gas prices rising I figured I would do a price comparison for myself to see what I save riding it around instead of driving my Z. So first lets figure my miles. Actually I know my miles because I can calculate from my Z. My commute and daily driving comes out to about 14,000 miles a year. My motorcycle also happens to get great gas milage due to its smaller engine (450 cc). I get 63 miles to the gallon. My Z gets about 17 miles per gallon. Another factor is that my Z requires premium, and when I say requires, I mean requires…it starts knocking if I put in mid grade whereas my motorcycle runs on regular unleaded. Lets do the math.

Z: 14000 / 17 = about 823 gallons of gas. Now multiply that by the cost of gas at my local station, 823* 3.37 = $2773.51

Motorcycle: 14000 / 63 = about 222 gallons of gas. Now multiply that by cost of ga, 222* 3.16 = $702.22

So $2773.51 – $702.22 = $2071.29 Savings

Ok, so obviously I live in Colorado and its not feasible to ride my motorcycle more than 4-5 months a year and some daily driving requires use of a car but its possible to have substantial savings. If you took it even a step further if you could ride a scooter to work, you could get up to 85 mpg. Motorcycles have their disadvantages, and can be very dangerous if ridden improperly or without proper training but on the other hand if you are someone who can take advantage of owning a motorcycle, I highly recommend it.

So I admittedly have a lead foot sometimes. The funny thing is I had only one speeding ticket in my life for going 8 over in the middle of nowhere in New Mexico. Who DOESNT speed in New Mexico? Anyway that was until recently. I got two tickets in ONE WEEK. Blehck. The truth is I didn’t deserve one of them, the cop pulled me over for speeding up to soon when the speed limit increased from 30 to 45 – I was literally 10 feet in front of the sign when I sped up. Im pretty sure it had more to do with my car than anything. In any case instead of just letting them take me for 200 bucks and 8 points on my driving record I decided to fight it.

Fighting a speeding ticket is actually much easier than you would think and can save you a ton of money. Never, ever, ever just send the ticket in if it includes points against your license and/or huge fines. There are all sorts of ebooks out there on “how to fight a speeding ticket” and sites with 100 step programs to do so. Well guess what, you don’t need it, its OVERKILL. I am going to tell you how in three simple steps:

1) Go to court at your appointed time

2) When the judge reads you your rights, say “I understand” and then instead of pleading say:

“I would like to speak to the prosecuting attorney.” Which you HAVE to be granted.

3) Tell the attorney you would like to make a deal.

4) Make a deal with him or her.

The truth is no one wants you to go to court. Not the prosecution, not the attorney, not the judge, and most of all not you. In fact, many times you might not even have to go before a judge, you might just strike a deal before you ever go into the court room, sign something and be done.

What kind of deal can you get?
Generally they have set deals they hand out that you plea down to. I had a couple of options that would have gotten rid of my ticket completely but since I had another ticket for the next week I asked to take care of them both at the same time, which they granted. I went down from 8 points and $400 to 1 point and $80. Thats right $320 and 7 points saved…and all it took me was 25 minutes at a municipal court.

I have already talked in the past about how easy it is to save yourself a ton of money by calling your credit card company, but the truth is it goes way further than that.  Today I was in hollywood video store because it is closing and there is a bunch of stuff on sale.  All of the new releases were on sale for 15.99, the TV DVDs and previously viewed movies  for $5.  I grabbed the first two disks of season one of Lost because Ive heard its good and they were only $5 each.  Well, I grabbed a movie as well and took them all to the counter.  I was chatting with the assistant store manager as he was ringing things up.  He told me things were pretty slow and they weren’t selling out very fast.  As he rang up the movie it turns out it was a new release so I told him nevermind because it definitely wasn’t worth $15 to me.  So he set it aside….except then I told him

“Hey, if you want to sell it to me for five bucks, Ill take it.”  …And he did.

If you walk into king soopers and demand they give you 50% off on peanut butter, they are going to look at you funny.  But under the right situations, you really can save money, just by asking.  What have you got to lose?

There are all sorts of articles everywhere that will tell you how to avoid blowing your budget…but what do you do if you DO blow your budget? Well that exact thing happened to me this weekend so now is a decent time to tackle it because lets be honest if you are part of the 99% of people that aren’t always perfect, it will happen to you at one point or another. Now Im not referring to “I got super sauced and bought a corvette from a used car dealer” kind of blown budget. More along the lines of “unplanned dinner and taxi trip” kind of thing. Anywhere from a few bucks to a few hundred.

So this weekend, I went over budget. We went down to Denver to visit some friends this weekend and I budgeted a certain amount of money for going out. One slight problem: we went out friday night with friends from work as well. This took out roughly 1/2 of the money I had planned for the weekend (I was expecting to spend only a few bucks friday night). Long story short I kept to budget until about 10 PM when we decided to take the light rail to a karaoke bar. If you haven’t ever been to a good karaoke bar with a huge group of fun people, I highly recommend it. So anyway four hours, one rendition of The Bad Touch (complete with dance), one rendition of Beat it (complete with attempt at dance) , taxi ride, and taco bell meal later I was roughly $125.00 over budget.

So what to do?
Well, the trick is that you should always put aside money each month for “unexpected expenses.” Aha, but I ALREADY used my set aside money.

So what now?
Its painfully obvious but should be pointed out anyway; cut back for this week, eat a few more meals at home, don’t go out next weekend.

For the sake of argument lets say you are already living perfectly frugally, what else can you do? Well there is a little trick called payment shifting. I don’t recommend it except as a last resort. Its this: you postpone when you pay a certain bill so that it coincides with the next paycheck. An example is, I get paid on the 1st and the 15th of every month. My mortgage is due on the 16th of the month. I pay my mortgage with money from my first paycheck of the month, if I had a situation where I was behind I could use my second paycheck of the money, effectively buying myself an extra 15 days worth of money if I needed until I had a chance to make back up the original money that was overspent.

By no means am I advocating blowing your budget but we are all human (even Michael Jackson, despite outward appearance) and mistakes happen. The real takeaway is that if you make one mistake do NOT get discouraged and just start putting things on credit card that you cannot pay off or give up on budgeting.

Well, they are exactly evil, I mean they are actually a modern marvel. Can you imagine telling someone a couple hundred years ago that you could someday go to one store and it would have every food from everywhere in the world? Unfortunately, this is also what makes them a trap. Heres a question to ask yourself: how do I shop?

Until recently I shopped by the “instinctive food gathering principle” which as it turns out, really means “spend tons of money on crap I probably dont need just because it sounds good.” It doesn’t help that they arrange things specifically to mess with you… in any case I would go to the store for toilet paper and come back with some drinks, chips, mens health, some fruit, a ribeye, cottage cheese (because I somehow always convince myself that I am out, even though I never am), ice cream or pizza, and who knows what else. Except toilet paper. I’d almost swear there are voices whispering in my ear to buy crap I don’t need. Anyway Ive come up with a list of things that has drastically reduced spending and the amount of time I spend in the store.

1) Make a dang grocery list. It takes two minutes, do it! I know you are saying “uh Jesse I can remember what I need” and you are probably right, but not only will it help you get what you do need but because it gives you direction you will be less inclined to pick up other random things.

2) Don’t wait until you are out of things to go to the store. A lot of times this creates a huge rush situations. A great example is needing milk in the morning to eat your cereal. When you start to get low on things, make your list and go…you’ll know exactly what you need and there won’t be any guessing involved.

3) Stick to one store if you can so that you can go directly to the aisles you need to go to. Wandering up and down the aisles is frustrating and leads to picking up more than you need.

4) Use coupons. I know, I get pictures in my head of my grandma cutting out coupons medituculously for 2 hours too…but really you can save a lot of money. And some places like King Soopers will give you coupons based on stuff you just bought with your receipt. nice-a!

5) Plan out some meals in advance. If you don’t feel like eating your planned meal you can always change it.

6) Eat healthy. As it turns out if you eat healthy stuff you can eat as cheaply as just getting junk. I eat kashi for breakfast with milk, then a mid morning protein shake, then a lean pocket for lunch, then some fruit and a pb&j sandwhich, some chicken for dinner and a post workout protein shake. All of that together can cost less than $5/day. Of course I dont always eat like that but its a good example.

Ok so there seems to be a lot of confusion around the Health Savings Account that the government is now allowing. So I figured it would be good to go over the kinds of medical savings accounts currently available and point out the differences. First of all some definitions:

Health Savings Account:
Its a tax-advantaged medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. The funds in the account can be used to pay for qualified medical expenses at any time without having to pay taxes on them. Withdrawals for non-medical expenses are treated very similarly to those in a retirement account in that they provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a huge part of consumer driven health care.

Health Reimbursement Account:
These are accounts that allow an employer, as agreed to in the HRA plan document, to reimburse for medical expenses paid by participating employees. HRAs reimburse only those items (copays, coinsurance, deductibles and services) agreed to by the employer which are not covered by the company’s selected standard insurance plan (any health insurance plan, not only high-deductible plans).

Flex Savings Account:
This is actually similar to the other two but it is offered with more traditional (such as the 80/20) plans as well.

These are all (FSA being the slight exception to the rule) consumer driven health care plans.

What is a consumer driven health care plan?
It is a plan that allows members to use personal income to pay routine health care expenses directly, while having a high deductible health insurance plan that protects them from huge (catastrphic) medical expenses. Its called “consumer driven” because it gives patients greater control over their own health. It also makes consumers more health care cost conscious…though in more of a good way. For example a study showed that people with chronic problems were 20% more likely to follow their treatment regime carefully if they were part of a consumer driven plan.

What is the main advantage?
There are many advantages and some disadvantages but the main advantage is that it is before-tax money. So if you do not use health care much, you will save a good deal of money in the long run.

All of that being said here is an overview of the differences:

There seems to be a lack of information around on these types of accounts so I hope this helps clear things up a bit. I personally am going to open a health savings account for next year. My employer pays for everything for a high deductible plan, and I am currently on an 80/20 plan but I just don’t go to the doctor very often despite a very serious injury from a few years ago. I especially like that it can be rolled over into retirement and that it can sit and collect interest.

Because I don’t go to the doctor, I have one fixed monthly medical cost: $69/month for propecia. Now, I have all my hair. My dad has no hair (not that he looks bad, I’d like to just wait until I can pull off the “Im old and bald but I am a BA” ala Patrick Steward/Bruce Willis). I decided Id like to keep mine for a while, so propecia it is. Thing is, health insurance doesn’t cover it, so its all out of pocket. If I used a health savings account this WOULD cover it, so by using that to pay for it every month I would effectively be giving myself a $30+/month raise.

Of course this banks on no huge medical bills, but I figure this is the only time in my life that I could get away with that. Maybe you can too.

There are some things in life you should save money on. There are other things you most definitely should not try to save money. These are those second things:

8] Toilet Paper
I really shouldn’t have to explain this, but for anyone that has ever worked in an office, if you buy that same stuff for your house, you are a masochist. I promise you the extra two dollars you spend on angelsoft or whatever will be probably the best two dollars you have ever spent in your life.

7) Mouse
Whats more annoying than a new cher album? More aggravating than waiting in line at the DMV? How about a cheap mouse. Unless of course you like choppy scrolling all over the page, clicking the wrong buttons, and carpal tunnel. All fun. And people who used photoshop during the time of ball mice deserve some sort of lifetime achievement award for patience.

6) Pens
I could never understand the obsession some people have with pens. I borrow a pen from a coworker or another student and they would say “make SURE you bring that RIGHT back” and I smile and say “sure” and think “HAHAHAHA whatever” because I am a jerk like that. Turns out, as i’ve been writing more, I hate bad pens. And ever been writing a check in a hurry, say because you need to mail your mortgage and the mailman is outside and your pen stops working? Oh and then you look in the drawer, no pen there either. Ok you get the picture.

5) Mattress
Good night sleep means productivity. A good mattress means a good nights sleep. Use your logic skills to figure the rest out.

4) Beer
Because if you are going to drink it, make it worth it.

3) Laser Eye Surgery
Seeing ghosts and funny colors for the rest of your life sounds sort of psychotic break inducing. Oh heres some other possible problems: double or triple vision so severe patients can’t watch TV or read, light distortions so blinding they can’t drive at night and eyes so dry that goggles must be worn outside. “Hey, your goggles are fogged up man” “Yeah its ok though, even if they weren’t Id see three of you anyway….assuming of course Im not blinded by the light.” Dear Lord.

2) Engagement Ring
Nothing preps you for a life of unhappiness and the label of “cheapskate” like a cheap engagement ring, perhaps bought online on an ebay auction. Thats like having a “shoot insult here” target painted on your butt for your entire marriage ….and in case you don’t remember, marriage is a long time, like life (well for 50% of the population). Oh and its great feeling like a chump when all her friends check out her teeny little rock and scratched up gold.

1) Skydiving lessons
For nearly everything, there is a reason that it is cheaper. And after all: what is the difference between a bad golfer and a bad skydiver? A bad golfer goes “whack……….damn” and a bad skydiver goes “damn……whack”

Remember, personal finance is managing your money, not being cheap.

This article will save you thousands, I promise you.  Number one alone is a monster.  Now here are some ways to save money on your car that you probably  haven’t seen around the web that I have learned through trial, error, and driving everything from the worst beater you can imagine (an old datsun 210 that looked like a lemon) to a new sports car.

1) If a light comes on on your engine that says “Service Engine Soon” Don’t rush over and pay $100 (I have made this mistake) for the local dealership to tell you whats wrong.  Go to autozone and they will give you the code your engine is throwing FOR FREE.  Then go home and google the code.  You can save yourself hundreds, even thousands of dollars doing this.

2) Do not use the dealer to make repairs unless you absolutely have to.*  This is especially true on older cars because they are much less complicated as far as electronics go.  However even on new cars independent repair shops generally will be just as good and charge hundreds or even THOUSANDS less.  The trick here is to make sure and find a reputable repair shop in your area.  As your friends and coworkers if they know of anything and if all else fails try the internet.

3) Whatever you do, do not buy an extended warranty.*  There was a survey done and the extended warranty was worth it only 1 percent of the time. Ouch.

4) Take your car to jiffy lube or do your oil changes yourself.  There is nothing magical to doing an oil change, anyone can do it if you read up on it.  On the other hand Jiffy Lube does it for 40 bucks.  At a dealer you will usually pay over 100 dollars.*  Ridiculous.

5) Do not buy premium gas unless your car HAS to have premium gas.  This will save you hundreds.  There is absolutely no advantage to using a higher octane gas if your car isnt knocking (making a click click or clunk clunk noise) when it is running.  It is not a special treat that will make your car run better.  I know in some parts of the country the LOWEST octane you can get is 91.  I promise you you will never need higher than 91 octane as far as current gasoline cars go…and thats the mechanical engineer in me talking not the personal finance guru.  Worst case scenario lets say you live in colorado like me and you put 87 octane in your new high compression engine and it knocks a bit.  Go grab an octane booster from autozone, or fill the rest of the tank with 91, and problem solved.

Hope these help, I know there are a lot of tips out there “inflate your tires to the correct pressure” “change oil <x> miles” whatever, we’ve all heard them; take these ones to heart and you will save even more.