In light of those bank failures earlier this Summer, here’s a short(1 min) video about the safety and soundness of America’s credit unions. It’s from the president of the Credit Union National Association, Dan Mica.
Actually at this time Piedmont Credit Union is financially stronger than it has ever been! This is thanks to the thousands of members who have trusted us and faithfully used our services over the years.
Our latest poll asks an ethical/moral question about money. Well maybe it’s moral? I guess the poll really is geared to reveal whether or not people have morals when it comes to money or whether decisions are based on logic and consequences. Anyway here it is…
If you ever are in the predicament of having to take out a Debt Consolidation Loan, don’t do it unless you are willing to change whatever it is that put you in that predicament. Otherwise, in the future, you will likely find yourself in that predicament again.
I ran into someone the other day who mentioned that they wanted to buy a car that gets better gas mileage. Their current car only gets about 17mpg and that makes for a nice chunk of change at the pump. My first question was “Do you have a payment on your gas guzzler?” The answer was “No.” So let’s ask the question, “What’s cheaper, buying a hybrid or keeping the gas guzzler?” The way I see it , it really depends on several factors which we were not able to explore in our abbreviated conversation.
How much does it actually cost to put gas in the guzzler and drive it? I figure at 17mpg with today’s price of gas it costs $0.23 per mile in fuel. In my world that’s about $2,530 per year (11,000 miles). Lets figure the cost of putting gas in the hybrid at $0.07 per mile x 11,000 miles = $836. Now lets figure the cost of borrowing $21,000 to buy it with a 5 year loan at 5.25%. That makes the total cost of the hybrid purchase $23,922. That’s $4,784 per year just in payments on the new car. So the first five years it costs you $5,620 per year!!!! So after 5 years of driving the hybrid you are $15,450 poorer! At that rate it would take 14 years to break even on the new hybrid. (This does not take into account if the gas guzzler could be sold or traded to recoup some of that money.)
What’s the moral(s) of the story?
It almost always a better deal to keep your paid off car rather than buy a new one. Drive your car until it absolutely will go no further all the while paying yourself in a savings account. Saving money minimizes the amount of interest you will have to pay on your next car loan. (Or it will help repair the old car.)
Consider buying an inexpensive used car that is fuel efficient. This will payoff much faster than a new hybrid even though the fuel efficiency isn’t as good.
When asking for advice about major purchases, ask people who have a proven track record of smart financial decisions.
Don’t rush into any kind of new payment. Ever. Under any circumstances. Think about it overnight at the very least.
There are situations where it is beneficial to swap a car. Here’s a little spreadsheet I put together to help you calculate if it’s a good financial decision for you. Download the Fuel-Financial_Efficiency_Calculator.xls Just for fun, check out this hybrid in the works from a California based company, Aptera.
Since my watch has broken I find that I don’t spend near as much time looking down at my wrist.You see, looking at my watch had become a response to even the mildest bit of stress.What was meant to make me more efficient had actually become a hindrance to me. So I’ve found that I really don’t miss it all that much. I find myself in less of a rush, and I’ve found a great conversation starter in “Do you have the time?”
What are some other things that we “can’t do without” which in reality hinder us almost as much they help? Facebook comes to mind. I’ve recently become hooked on that. From a personal finance perspective lots of things pop into my head. New cars for one.Why pay thousands more for new car when a used cars are widely available. Or consider cell phone costs. I just don’t see how having a Blackberry Curve will make me $1,000 per year more efficient. But I would sure feel hip and with it while I surf PCU Mobile on it.
Here’s my point. Looking for ways to save money and prosper financially sometimes requires counter-cultural steps.Don’t just follow the crowd and give all your money away just to experience the same thing as everybody else.
There’s a proverb that reads…
“Catch for us the foxes, the little foxes that ruin the vineyards, our vineyards that are in bloom.”
(Song of Solomon 2:15)
What are the “little foxes” in your monthly payments or expenses that ruin your budget? Is it a high car payment or a 2nd mortgage? Maybe its a shopping fix? (guys have those too) Or a gas guzzling SUV? What conveniences can you do without that will make a substantial difference in your budget over time. Hmm… Cable TV?
I wonder how much money will pass through Danville’s new Home Depot this weekend? The first big store at Coleman Marketplace opened its doors yesterday. Tomorrow should be a big day for them as the weather will be nice and homeowners around Danville, VA will no doubt find new reasons to work on old house projects. I’m sure Home Depot will feel quite welcome here in Virginia’s Piedmont!
I want to thank Home Depot for inviting our own “Dollars for Dually” campaign to be at their Grand Opening on Saturday as well. All donations will go towards helping God’s Pit Crew replace their oldest dually pickup truck. We’ll be there from 10:00am until 2:00pm along with WAKG 103.3FM.
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