Personal Finance Resources

Ever thought that 60 miles per gallon would cut your monthly gas bill in half? Me too. The idea of the hybrid is almost too good to be true. And from a financial standpoint, it is too good to be true. The following information is a cost comparison between the Honda Civic Sedan and the Honda Civic Hybrid Sedan. Essentially the same car, except the hybrid uses half electric, and half gas power, thus improving gas mileage. According to Honda, the Civic gets 40 mpg on the highway, while the Hybrid Civic gets an amazing 51 mpg. This is where the salesman gets you. “It will help protect the environment while saving you tons of money on your gas bill every month”, a salesman might say. This is very convincing, as it appeals to both our emotional side in protecting the environment, as well as our wallet. But let’s take a closer look at the two:

• Civic Sedan: Starting MSRP - $15,010
• Civic Sedan: Highway MPG - 40
• Civic Hybrid Sedan: Starting MSRP -$22,600
• Civic Hybrid Sedan: Highway MPG - 51

Now, I have compiled a spreadsheet that will aid you in your financial evaluation of the hybrid vs regular car purchase. As always, I have run an initial estimation only, you will need to download the spreadsheet at the bottom of the post, and update the numbers per your circumstances. Let’s look at the findings:

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In this post, I would like to present personal budget guidelines, and hopefully, point out some potential holes or problems in your budget.  The goal here is of course, to help you find ways to increase your disposable income, or the amount of money left over after all bills are paid.  After reviewing this post, I hope to ignite some ideas in your mind about ways to cut expenses, and the things that are really eating holes in your budget.  The following chart is a mixture of what other personal budget experts think, and my personal opinion of how to allocate your money:

In the above table, I have listed the expenses in order of importance (to me, anyway).  There are a couple of key things I want you to notice in reference to the above table:

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Deciding whether to buy a new or a used car can be difficult. When considering your options, which of these three do you fall under:

1. I am looking for a particular car, and am not concerned with its depreciated value over time.
2. I am looking for a balance between investment value and features/preferences.
3. I am looking for a car that will retain the highest value possible over time.

There are distinct advantages and disadvantages no matter which way you choose to go. But let’s look at my recommendations based on the above categories. If you fall into Category 1, you should buy a new car, and drive it for years to come. The key thing here is, that you do not sell you car within the first two years, as new cars lose 60-70% of their value during this time. You should expect less maintenance costs with a new car, but I highly recommend obtaining a great warranty package as well to further reduce your maintenance costs, the point being that since you will be making a car payment, you want to have as few unforeseen costs as possible.

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