MoneyMistakes2

Big Money Mistakes You’re Bound To Make: Part 2

Personal finance is something few people learn early on and many people are thrown into suddenly when they reach adulthood.

Because of the lack of preparation before entering adulthood, many people wind up making mistakes when they start managing their own finances. An Assets & Opportunities Scorecard found that 55.6 percent of Americans have subprime credit scores. These scores prevent them from qualifying for loans at prime rates. Instead, when they need a loan, the only rates they are able to obtain are high ones they may not be able to afford.

Many of today’s adults did not receive any sort of financial education prior to gradating high school. Business Insider reported that, 20 years ago, Illinois was the only state with the requirement. Now, 16 other states have joined Illinois in mandating financial education for students.

More states beginning to require that high school students take a personal finance class before they graduate is a step in the right direction. However, if you were one of the many Americans who graduated from high school without taking such a course, you likely learned about some common money mistakes the hard way. Here are some of the big ones many people discover on their own:

1. Not understanding your credit card

This is a serious one that many people fall victim to. Some common blunders Americans make include overspending on cards and missing payments.

Missing payments is a serious mistake because payment history accounts for 35 percent of your credit score. The lower your credit score is, the harder it will be to get a loan for something like a home or car later on when you really need it. It will also make it difficult to get another credit card if you decide you want a new one.

Not paying off a balance in full is another mistake cardholders often make that can have additional consequences. Like any other loan, credit cards come with an interest rate. If you don’t pay off your balance in full, interest will be added to your payments. If you continue to only make the minimum payment on your card, your balance will stay and grow until you can completely pay it off.

2. Not budgeting

If you can’t afford to pay your card off in full every month, or you find you are overspending on your card, it’s likely you haven’t set a reasonable budget for yourself.

“A budget is a useful tool that can keep you out of debt.”

Creating a budget can be tedious, and sticking to one can be hard at times. But in the end, it’s worth the effort, as a balanced budget is a useful tool that can keep you out of debt.

To create a budget, first determine your monthly income. Then, calculate how much you spend each month. Include fixed costs and essential payments, like rent, bills and loan payments. Figure out costs that might fluctuate, like groceries, and payments you make that aren’t necessary, like new clothes or going to restaurants.

Determine whether you are overspending on certain things and where you can cut costs. Set rules for yourself about how much you can spend each month in certain categories.

3. Not saving for emergencies

When you create your budget, it’s easy to only think in terms of the present. But be sure you’re including your future self in your budget, too. Many people leave an emergency fund out of their budget, which can turn into a serious problem when you least expect it.

You can’t predict when an emergency will strike or what the nature of the emergency will be. Unexpected circumstances come up out of the blue for many people every day. Maybe it’s a health problem, a job loss or car trouble.

In any case, if something unfortunate happens and you don’t have a reserve of money to prepare for it, you may find yourself panicked about finances. An emergency situation is stressful enough without worrying about how you’re going to get by financially.

Protect yourself against unforeseen incidents by setting aside money to use only in case of emergency. A reserve of between three and six months’ salary should be sufficient.

Personal finance can be a tricky thing to learn on your own. Save yourself a lot of trouble later on by making sure you follow these three important lessons.

hybrid

The Rise and Fall, and Rise of Hybrid Vehicles

Hybrid vehicles have been available to consumers for about two decades now. They boast an environmentally friendly alternative to gas-only engines, and gives car owners the ability to save some money at the pump.

Hybrid innovation had a lot of industry professionals excited for the years to come. In 2010, J.D. Power and Associates predicted that in 2020, 7.3 percent of all cars sold would be either HEVs or battery electric vehicles, a total of 5.2 million. This was in comparison with the 44.7 million sold in 2010, just 2.2 percent of all vehicles sold.

Scientific American pointed out that other, more optimistic predictions were shared among auto industry experts.

A survey from AutoPartsWarehouse.com found that 86 percent of people think these alternative vehicles will be sticking around, with more than two-thirds of them adding that they will decrease in cost and more people will begin to adopt the trend.

Additionally, 40 percent think that more people should be driving HEVs because they reduce consumers’ dependence on foreign oil and fossil fuels and are better for the environment.

Adoption rates slow

Despite so many people rooting for the success of HEVs and touting their benefits, it doesn’t seem like many consumers are willing to follow through on their viewpoints. Only 8 percent of AutoPartsWarehouse.com’s survey respondents reported already owning an HEV.

Additionally, Edmunds.com reported that most people who traded in their HEVs in 2015 didn’t opt for another alternative energy car, marking the first time consumer loyalty for alt-fuel vehicles dipped below 50 percent.

“One-fifth of former HEV owners replaced their cars with an SUV.”

Further, more than one-fifth of former HEV owners opted to replace their cars with an SUV.

“For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment,” Jessica Caldwell, director of industry analysis for Edmunds.com, explained. “Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today’s gas prices as low as they are, the math just doesn’t make a very compelling case.”

AutoPartsWarehouse.com’s survey results reflected this sentiment. More than half said they didn’t think the gas savings an HEV offers are worth the money for an alt-fuel car, and one-fifth said that a regular compact car is just as good at fuel economy.

Changing ideals and perceptions

Scientific American pointed out that the once rapidly rising sales rates of HEVs have begun to plateau, possibly due to changing consumer attitudes, improved engine efficiency and decreased oil prices.

A major driver for HEV purchases was their environmental friendliness and their innovative features. Recently, though, fewer consumers view alt-fuel cars like this. Over the past few years, consumers have held these two factors with less importance when purchasing an HEV. On the other hand, when purchasing an internal combustion engine vehicle, the importance of being green and having the latest technology has gone up.

This could mean that consumers will view these factors as equal between the two types of engine, making the deciding factor something like price or fuel cost, Scientific American stated. When basing the decision between an HEV and an ICEV on price alone, the ICEV has always come out ahead.

While prices have improved over the last few years and the gap between the ICEV price and HEV has gotten smaller, alt-fuel cars are still thousands of dollars more than their ICEV counterparts.

Fuel prices don’t help HEVs case, either. Edmunds.com pointed out that if someone were to opt for the $28,230 Toyota Camry LE Hybrid over the $24,460 Toyota Camry LE in 2012, it would take about five years to break even on the cost difference. The average price of gas peaked at $4.67 per gallon that year. Now, with gas prices tumbling and struggling to make their way back up, it would take more than a decade to make up the $3,770 difference.

The future of hybrid

While future sales of HEVs doesn’t look promising, Scientific American reported that there is still hope for these green vehicles. Corporate Average Fuel Economy standards implemented by the federal government state that vehicles need to get a lot better at conserving fuel. The goal is to get vehicles to reach 43 miles per gallon by 2025. Automakers may resign to adopting hybrid technologies to meet these requirements, bringing more HEV options to the market, and making them more prominent.

Plus, with the shrinking price gap between alt-fuel cars and ICEVs, people may begin to choose them once again.

While AutoPartsWarehouse.com’s survey revealed that only 8 percent of respondents owned an HEV at the time of the survey, more than half said they would seriously consider getting one.

Shane Evangelist, AutoPartsWarehouse.com’s CEO, explained, “This survey indicates that alternative energy vehicles appear to have moved well beyond the ‘fad’ stage and into the consumer purchasing consideration set.”

MoneyMistakes1

Big Money Mistakes You’re Bound To Make: Part 1

Throughout life, you’ll probably hear loads of unwarranted advice on every subject from your career goals to your love life. You’ll also find yourself picking up some recommendations about how to manage your money.

It’s important to have a plan for your hard-earned income. Without some ground rules about spending and saving, you may find yourself making unnecessary or expensive purchases, without any money stowed away in case an emergency were to occur.

The advice you’ve gotten over the years has probably shaped how you spend and save your money. It also may have influenced the way you conduct your life.

While some of these words of wisdom may be in your best interest, it’s also valuable to know that you can pick and choose which rules apply to you based on your own circumstances and goals.

Continue reading…

Don't Buy A New Car In Your 20's

Why You Shouldn’t Buy A New Car If You’re Under 30

When you’re in the market for a new car, it can be tempting to buy a vehicle that’s brand new.

Those cars are shiny and perfect with that new car smell everyone wants. You may think that driving one around town will show everyone how successful you are.

But before you drive that car off the lot, be sure you’ve given the purchase a lot of thought. There’s a lot of reasons on why buying a new car isn’t as glamorous as it sounds.

Continue reading…

Couples Who Save By Combining Their Finances

3 Ways To Save By Combining Your Finances

Couples Planning Their FinancesIt’s a good feeling to know that you and your partner are there for each other through thick and thin.

Whether you are married or simply in a long-term, committed relationship, it’s always nice to know that the other person will always be there for you.

When you get to this point in the relationship, there are some transitions that are commonly made. You may get engaged or married, move in together and you may even join finances. While it might not sound like the most romantic step, the joining of finance is a very important milestone for many people in their relationship.

As with other big steps in your partnership, it’s not one to enter into lightly. There are many ways to join finances, and you need to be sure you’re choosing the method that works best for both you and your partner.

Continue reading…