This Week in Your Wallet: January 24, 2012
Do you ever try to save money, only to have your savings “trick” cost you more money down the road? I’ll confess, it has happened to me on more than one occasion. (Just ask my family about the three mid-level vacuum cleaners that sit broken in our basement. Let’s just say it took me a few tries before I caved and bought a top-of-the-line Hoover.)
Last week, WiseBread.com released a list of the top ten things we do to try to save money that actually end up costing us even more in the long run. Among the most common? Skipping doctor’s and dentist’s appointments, opening store credit cards to nab a last-minute discount and buying food in bulk (half usually gets thrown away).
The good news is that there are ways to avoid these traps. Here’s what you can do:
- Keep up with yearly checkups. This goes for your doctor, your dentist, and even your pet’s veterinarian. Co-pays are annoying, but not nearly as financially crippling as a major health issue that has gone unnoticed.
- Put retirement first. It’s great to contribute to an emergency fund, but it’s not so great to do that at the expense of your 401(k). You could be missing out on your employer’s matching dollars, so really try to put aside money for both retirement and emergencies.
- Know the real cost of gas. It costs us $1 for every 7 miles that we drive. Keep this in mind the next time you drive out of your way for a deal. If you’re not saving more than a couple of bucks, that drive is probably not worth it.
For more tips on avoiding money-saving mistakes, you can check out my most recent TODAY show segment here. And now, here are the rest of the headlines for the week:
Surviving a tough rental market
In and around where I work in New York, I frequently hear renters complaining about how hard it is to find a good, affordable apartment in the city. But while the vacancy rate in Manhattan hovers around a mere 1%, the rental landscape on the national level isn’t much better. According to this Wall Street Journal article, the nationwide vacancy rate is 5.2%, the lowest it’s been in over a decade. This is in large part due to the housing crisis that has left many Americans unable (or just unwilling) to buy their own home.
The good news is that it is possible to find a decent rental property for your budget — it just takes a little creativity. Consider the amenities you’re willing to forgo (apartments on lower floors, for example, are a bit more expensive), and don’t be afraid to ask your real-estate agent if he or she is really showing you the least expensive properties in the area.
Finally, keep in mind that regular rent payments can now boost your credit score. As of December, the credit-reporting agency Experian is taking into account your rent payment history. If your landlord reports that you have met your lease obligations within the past 24 months, this information will help you rebuild your credit. If your landlord hasn’t been reporting to Experian, you can ask him or her to start doing so — and then proceed to watch your credit reap the benefits!
A private equity crib sheet
Over the past few weeks, the words “private equity” and “leveraged buyouts” have dominated the political debates. As a result, NPR had the good sense to ask, “So, Um, What is a Private Equity Firm?” It’s okay if you don’t know the answer — I know many people who are asking the same question right now. NPR answers this, plus other questions, using clear, concise responses that are easy to understand. Not only is the piece good for a general understanding of the financial world, but it also might help you decipher some of what’s going on in the political arena, too.
The best laid plans of mice and men…
Quick: what’s that from? Email me with the title and author of the work I’m thinking of, and I’ll randomly select a correct response to win an item from my Office Depot line! (And hint: there are actually two possible answers…)
But I digress. My point in writing that headline was to segue into this terrific New York Times Bucks Blog post on recalibrating our financial plans. Often, we create a financial plan and expect it to be perfect. We expect it to last a very long time. The problem is, life inevitably gets in the way somehow. We are surprised by an extra pregnancy. We leave jobs. We deal with health emergencies. All of these things affect our finances, so we have to change our plans. And changing what we thought is the “perfect financial plan” frustrates us. But it’s not practical to get frustrated, because there are so many things outside of our control and careful planning. Instead, it’s better to plan to, well, change your plans.
As the author of the post so eloquently wrote, “Our goal shouldn’t be to pursue perfection in our decision making, but to get really good at knowing when we need to make a change. It will take practice and likely be something you need to do for the rest of your life.”
I couldn’t agree more. And on that note, have a great week!
Jean
