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A Car Budget Is the Foundation of a Smart Financial Plan 6 Jun 2022 5:17 AM (2 years ago)

People relocate for a number of reasons and sometimes those relocations mean you have to rethink your car budget.

Moving to a new city or country can be invigorating, but unexpected expenses can put a damper on your enthusiasm. The car market changes radically depending on where you go, so it’s important to do your research and acquire the tools to prepare for anything.

There is nothing more exciting than picking up and starting over in a new location. A change of scenery can be great for the soul. You will have new experiences and get the opportunity to reinvent yourself free of preconceived expectations.

However, a relocation can also be an extremely stressful time. In this article I’ll explore how you can plan for a car budget that works for you.

Don’t forget to factor your car budget into your moving expenses

In 2009, my wife and I relocated to the United States from Lima, Peru. Purchasing a car was my very first major expense.

The simple reality is that you need a car as a professional adult in the United States. My wife had lived her whole life in a city with adequate public transportation and she was stunned by how reliant Americans were on their personal vehicles.

Fortunately, I purchased a used car from my brother at a discounted price that was well below my car budget. At the time, I thought it was a prudent decision. As the relocation expenses continued to pile up, I soon realized my minimal car budget had saved me from a lot of headaches.

Avoid becoming financially overextended

It’s important to be prudent when you’re taking on a new experience. You’ll be overwhelmed by the things you need to learn and it’s easy to make mistakes.

Whether you’re relocating for work, or you simply want a change of scenery, the fun of the experience quickly wears off if you start running short of money.

In the United States, the car market has been extremely volatile over the last few years. This is due to a variety of factors including: COVID-19, inflation, supply chain issues, fuel prices, and various changes in employment.

These factors have resulted in an increase in pricing.

Over the first twelve months since the start of the pandemic, the new vehicle price index rose about 1 percent. More recently (i.e., between March 2021 and February 2022), this price index rose about 13 percent. This upward price pressure is manifested by strong demand and limiting supply factors

New vehicle sales and auto price inflation since the pandemic

Consider both new and used vehicles

Before you purchase a new car, it’s important to run the numbers of your car budget with a variety of different variables.

There are always additional costs that come as a result of your vehicle choice. These costs include: insurance costs, gas expenses, repair work/warranty guarantees, and loan considerations.

Car budget calculators allow you to achieve a much clearer perspective of your financial outlook. It’s important to consider the effect fuel budget or different loan payment options can have on your overall quality of life.

Budget calculators can even alert you to expenses you might not have considered. Here’s an example:

Any time you make a major purchase it can become a stressful decision. Running the numbers is a great way to add clarity and make the perfect decision for your unique situation.

Be mindful of industry trends when planning your car budget

Every market situation is unique and it can change rapidly. The whole world is still recovering from the pandemic, and that recovery has led to fluctuations in car pricing.

The increasing cost of automobiles continues to be a major component of inflation, as many manufacturers face difficulties procuring chips that are a key component in cars and are therefore producing fewer new cars. While the chip shortage has caused new cars to grow more expensive, the price increase of used cars has been sharper. Data show that the CPI for used cars and trucks increased 40 percent since January 2021 while the CPI for new cars increased 12 percent

Ryan Kelly, Chris Kukla, and Ashwin Vasan

Remember that the lower price of a used car is balanced by the more imminent potential for repair expenses. At the same time, trends in pricing are not universal. It’s still possible to find a great deal either with a new or used car.

The best practice with a car budget, or any budget, is to allow yourself the flexibility to manage unexpected expenses.

Purchase a new or used car with confidence

It’s a wonderful feeling to take the wheel of a new vehicle and hit the road for the first time. There’s no greater sensation of freedom than to drive with the wind in your hair, free of worry.

Whether you’re planning a relocation, or you’re simply in need of a new vehicle, taking the time to evaluate your car budget is the best way to minimize your stress and maximize your freedom.

The uncertainty of an ever changing market is the only guarantee we have in life. It takes only a few moments to do the research, run the numbers, and find the best solution for your unique situation.

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An Optimized Budget Can Help You Get Out of Debt 13 Nov 2021 6:04 AM (3 years ago)

Debt is one of the principal hazards of the modern world and an optimized budget is the best strategy for taking control of your life.

You’re encouraged to get into debt to get an education, buy a car, and purchase a home. The high interest rates of credit cards can make your debt feel impossible to pay off. Soon, you’re struggling just to make the minimum payments and hopelessness can set in.

If this sounds like your situation, don’t worry. Although it feels like a downward spiral, it is possible to get rid of your debt and take back control of your life.

The secret is to break down your ultimate objective into a series of smaller challenges. Adopting good sense financial practices can put you on the path to conquering your debt.

Eliminate unnecessary expenses

Many people think that in order to eliminate debt they have to make more money. Getting a job with a higher salary helps, but your best results come when you also make an effort to reduce your expenses.

If you are looking at a huge debt, it may seem silly trying to save a couple of dollars here and there. However, once you sit down and run the numbers, you might be amazed at how easy it is to save hundreds of dollars a month.

Keep in mind that once you get into the habit of saving hundreds of dollars every month, it translates to thousands of dollars every year.

Always remember that from the moment you commit to an optimized budget, time becomes your friend. Once you become committed to a good practice strategy, you’ll begin to discover creative ways to save more money every month.

We are lured into complacency by reoccurring fees that we pay without even thinking about it. Take some time with your bank statement and identify the places that are draining your money. In many cases, you’ll find you can eliminate those expenses and not even notice an impact on your daily life.

Click here for a list of unnecessary expenses that anyone can eliminate.

Identify where you overspend

Once you’ve eliminated the unnecessary payments, it’s time to take a closer look at your other monthly payments. Obviously, you need a car to get to work and a place to live, so it might seem impossible to do anything about those payments. However, that’s not the case.

Many Americans overpay on their mortgage and car payments. There are many options for refinancing loans that can save you hundreds of dollars a month.

Leaving your bank and switching to a credit union might be another tactic for securing better savings rates and eliminating fees. For more information, click here.

Avoid bad information

A lot of money is spent on advertising designed to get people into debt. This advertising is for the benefit of the banks, not you. Unless you are deliberately seeking out good financial information, you’re likely to encounter messaging designed to get you further into debt.

This messaging is very powerful and effective.

Ultimately, you have to empower yourself to identify good information. You have to evaluate your debt situation, reduce expenses, and make payments on the principal. It’s as simple as that. If you are only making minimum payments, you’ll never reduce your debt.

Only make financial decisions that you fully understand. If you don’t understand, keep asking questions. Take the information you receive and discuss it with people you trust. Run the numbers yourself with a calculator and make sure everything adds up.

Remember that debt is a business. There are many people in the world who benefit when you are in debt. If you want to get out of debt, you’ll have to get your information elsewhere.

Take control of your life

Facing a huge mountain of debt can feel insurmountable and soul crushing. However, with proper financial practices it is possible to grind the mountain down to dust.

Don’t try to find an answer to all of your debt in one day. That attitude will most likely result in a desperate, high-risk financial scheme that will lose money and worsen your situation.

Instead, resolve to adopt one good practice every day. It can be something as simple as eliminating a streaming service you can live with out. Even a $20 monthly payment results in a $240 yearly savings.

Once you make a commitment to an optimized budget, you’ll begin to enjoy finding new ways to save money and eliminate your debt.

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Online Games Like Solitaire Are Perfect For Travel Delays 4 Nov 2021 8:05 AM (3 years ago)

If there’s one thing that I’ve learned in my years of travel it’s that delays are inevitable. Sometimes flights get canceled, other times weather blows in, occasionally your plane never shows up at all. A game of online solitaire can be the perfect thing to manage anxiety and keep you entertained.

To travel is to be in a state of perpetual limbo. You are not in complete control of your destiny. Sometimes when you’re too anxious to sleep, but too tired to read a book, the best thing you can do is put your mind at ease with a simple online card game.

Solitaire

I enjoy discovering new web sites that house free games, and the latest I’ve dug up is Solitaire.org. The site works equally well on a cell phone or on a desktop and contains a huge variety of games.

My wife’s favorite choice to wind down in the evening is to play Mahjong. Mahjong is a game that requires the player to eliminate tiles by finding matches. At the end of a work day, my wife will often play a game or two of Mahjong to turn her brain off so she can go to sleep.

I’ve always found that playing games like this is a very effective way to combat anxiety. It’s easy to become anxious when you’re traveling as you await flight information. You need something that will help settle your brain, but which isn’t so engrossing that it keeps you from hearing announcements.

Word games

A quick game of solitaire or Mahjong is the perfect thing to keep you at ease when you have a few minutes to kill.

My preference is to play word games. I like games where I have to make words out of a random assortment of letters. One relaxing option is Letter Scramble. The letters tumble onto the screen and you arrange them into words.

Every game features extensive instructions, however I find it’s easier to simply begin to play. Most of the time, the objective is self-explanatory.

There are even some games that are appropriate for keeping young kids entertained. Daily Maze is a nice option. The game simply generates a maze that you have to solve.

There are also basic word search options that have an educational component because they help to reinforce how words are spelled.

Poker

There are a stunning variety of variations on basic solitaire. It’s always fun to sit down with a deck of cards and see what fortune has in store for you. I particularly like Vegas Poker which is a good representation of a game of Texas Hold ‘em. When traveling, you don’t want to get into a real game because other players get irritated when you don’t give the game your undivided attention. But whether you’re playing for cash or for fun, it’s always a thrill to find yourself staring at pocket aces.

If you’re looking for a good web page with free card games and more, Solitaire.org is a very good option. The games are free, the game play is easy to learn, and there are a stunning variety of options. It’s good to bookmark pages like this for those moments when fate plays a trick on you and leaves you stuck in a waiting room somewhere. Playing basic card games will help keep your mind occupied, and ensure that the time passes more enjoyably.

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Use Video Games to Eliminate Travel Boredom and Work Stress 20 May 2021 10:13 AM (3 years ago)

There’s nothing worse than sitting at an airport enduring endless flight delays. You’re caught in limbo, completely at the mercy of the airline or the weather or some other factor beyond your control.

When you’re traveling with children the experience is even more difficult. Children can only take sitting around doing nothing for so long, and the minute your travel day begins, the clock starts ticking. If you don’t get to your destination in time, you’ll have to suffer through an embarrassing meltdown.

In these moments, video games can be an absolute lifeline.

Brain break

Entertainment sources such as movies or music can only take you so far. Sooner or later, your brain seems to reject the distraction and you start to feel agitated again.

In my experience, video games are the best solution for breaking through unfortunate moments of tedium. There’s something about entering a digital world that makes you indifferent to the passage of time. You can lose yourself completely, and in some scenarios, that’s just what the doctor ordered.

The history of video games

I’m old enough to have seen the entire evolution of video games. I remember playing an old Atari 2600 in the basement of my parents’ house and I still have a special place in my heart for the 8-bit games. Although simple, many of those games were more addictive than anything that’s come since.

I even remember the days of the text based adventures which are now more or less a thing of the past. The best, in my opinion, was the game based on The Hitchhiker’s Guide to the Galaxy. Free versions of that game can be found in several locations. The BBC hosts a version that includes graphics, but I prefer this version because it allows you to type with your keyboard.

Text based games have become little more than a novelty, but the storytelling element has only continued to evolve. Today, video games activate the brain in a way few other diversions can.

The tedium of work

Sometimes during my work day, I like to take a 10 minute rest where I can go and digitally blow things up. It helps break your thinking out of a rut, and when you get back to task, you’re refreshed and energized.

My go-to game in these moments used to be Warzone Tower Defense, but the game hasn’t worked since flash got disabled back in January. There’s probably a workaround, but I’m too lazy to find it. Instead, I’ve moved on.

There are some base defense games on Plays.org, a website that also features reproductions of old arcade favorites. For example, Pac-Rat is the stand-in for Pac-Man. On the desktop version, you control a rat with your arrow keys as he navigates a maze while avoiding four hungry kittens. On the mobile version, you control by swiping.

I like the web page because it’s entirely browser based and doesn’t require you to download anything. This is an advantage over cell phone video games too.

The advantage of browser based video games

The problem with cell phone games is that they sometimes hit you with in-game purchases. If you’re using video games to soothe your children during a flight delay, you don’t want your child to accidentally rack up hundreds of dollars in purchases.

Plays.org even has a couple typing games which are useful for sharpening your skills in preparation for a job interview.

Enjoy your gaming!

On most days, I don’t have enough time to read instructions to learn a new game and I go for the old favorites. However, there are instructions available. It’s amazing how much good it does to disconnect from reality for a few minutes and attempt to surpass your previous high score.

What’s your favorite source for online video games? Please leave your preference in the comment section below!

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Your Mortgage is the key to Your Financial Freedom 14 Dec 2020 12:47 PM (4 years ago)

For most people, a mortgage represents their largest monthly expense. If there has one thing that has become clear in recent times, it’s the importance of achieving financial stability. Wouldn’t it be great to launch a strategy that eliminated the need for a mortgage payment?

In the last few years we have witnessed an extremely volatile stock market combined with the economic ravages of the pandemic. Now, more than ever, it’s important to consider stable investments which will put you in the best possible position to weather future, unforeseen circumstances.

Many people become so ambitious in the pursuit of wealth that they end up overextending themselves and losing everything. Although it may be your aspiration to build a skyscraper, you can’t get so focused on your plans for the 100^th floor that you neglect to fortify your foundation. In reality, the foundation needs to be your primary emphasis because it keeps you from ever having to start from nothing again.

One of the best things to do when you’re developing your strategy for financial freedom is to consider how to build equity from the inevitable expenses of life. No matter what happens to you or how much success you eventually achieve, you are always going to need a place to sleep. Purchasing a home doesn’t eliminate the rent expense, but it does allow you to leverage your rent expense and make it work for you.

In the last few years of market volatility, I’ve been committed to using extra funds to make additional payments to my mortgage. The thinking is that when the house is paid off, I can better handle the loss of a job or other unexpected expenses. It’s important to note that this has been a long term philosophy. First, I bought a house at the bottom of the market. Second, I selected a house that cost approximately half what the bank said I could afford. Third, I selected a 15 year mortgage. Fourth, I have paid extra into the principle throughout the duration of the loan.

Before you look into a home, it’s important to spend some time with a simple mortgage calculator like this one. Don’t make the mistake of thinking that the loan advisor at the bank is your friend. It is in the interest of the bank that you receive the maximum loan that you can afford, and if you aren’t careful, you might lose your financial flexibility to pursue other interests or have a cushion for unexpected expenses.

With mortgage calculators you can get a very good idea what your monthly expenses are likely to be. Tax and insurance fees might fluctuate slightly over time, so listen to your gut instinct. If a sixth sense tells you that the amount shown from the calculator might be too difficult of an obligation to meet, then don’t sign for the loan.

After picking a life partner and having a child, purchasing a house is one of the biggest life decisions you’re likely to make. The better prepared you are to navigate the requirements of the loan, the better your chance at building equity and taking a massive step towards financial freedom.

You are always in a better negotiating position if you maintain a position of flexibility. When you are looking at houses, run the numbers multiple times. Don’t take your loan officer’s word on anything without independent verification. Listen to that voice inside your head that questions whether or not you can afford the loan. Select a loan that you can afford and which gives you the financial flexibility to pay it off early. A home is a great investment. With proper planning, you can be assured that your loan will be the first step on your pathway to financial freedom.

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