It’s another post related to the price of gas. Today I debated on whether or not I would drive to the gas station that had gas for $3.99 a gallon. While this is still outrageous, it’s the lowest that I have found recently. The only problem? It’s a 12 mile round trip to get the gas from my work. I have been him-hawing around on whether it was worth it to go out and get it when, lo and behold, a light bulb went off! and I decided to calculate it. I am a numbers kind of girl, anyway.

I estimated my gas mileage to be around 23 miles to the gallon, which seems pretty good for my 1994 Oldsmobile Achieva. I found out that it supposedly gets around 18 mpg city, 26 hwy, and 21 combined. I wasn’t that far off. Here are my calculations:

At 21 miles per gallon, it costs me roughly half a gallon of gas to drive the 12 miles there and back to get the gas, so $2. My fuel tank capacity is 15.2 gallons. If I get gas for $3.99 versus the $4.09 closer to home, I am saving at the most $1.52. This is also assuming that I can get 15.2 gallons, which is impossible. $1.52 (what I’m saving) - $2 (the cost to get me there and back)= -$.48! It’s actually costing me money to drive there! I’m glad I didn’t bother to make the trip!

This was all pretty surprising to me. At ten cents off a gallon, I thought it would be worth it. The numbers prove otherwise! I’m glad I calculated that first! I guess the lesson learned here is this: just because it sounds like you may be saving money, it’s better off to calculate it to make sure. I am thankful I am still receiving my 4% back on my gasoline purchases!

What’s the cheapest you’ve seen gas in your area lately?

Posted under Economy

I was reading an article today about “recession-proofing your income” and when I got to a paragraph, I almost had a heart attack.

Savings accounts are safe, though yields will get stingier as interest rates fall. Rogé says it even makes sense to pull money out of an emergency fund to pay off debt. Psychologically, that’s hard to do in a shaky economy. Chances are you won’t lose your job, however, and if you do, why not run up debt then rather than pay finance charges now? If you want a security blanket, apply for a home-equity line of credit, which will probably have a lower rate than a credit card anyway. But tap it only in an emergency.

What?? Are you kidding me? I can’t believe anyone would say this is a good idea in this economy. There are so many things wrong with this statement.

1. Not everyone can get a home equity loan or home equity line of credit.
2. Why drain your emergency fund to pay for a credit card that, chances are if it’s based on prime rate, has a not-so-bad interest rate?
3. Home equity loans or home equity lines of credit should not be used as an “emergency fund”.
4. After you’ve drained your emergency fund to pay off your credit card and you lose your job and need to pay your mortgage (or rent), where are you going to get the cash from to pay it? Your mortgage company isn’t going to accept a credit card as payment!

I just can’t believe that anyone would make a suggestion like that. An emergency fund is just that: for emergencies. Personally there is no way I would ever empty (or take a huge chunk out of) my emergency fund to pay off credit card debt. I guess it’s all a matter of opinion, but I just would never do it. I feel comfortable knowing I have the cash to pay for my mortgage in case something horrible happened.

What do you think about using a credit card as an emergency fund?

Posted under Credit Cards, Pay Off Debt, Save Your Money

I am slowly but surely making a dent in my student loan debt. With the way the economy is, I’ve been trying to put as much money into savings that I can while paying off this debt. I’m not in too big of a hurry to pay this off because of the ultra low interest rate I am paying on it. This is the only other debt we have besides this loan is our mortgages. I’m not in too big of a hurry to pay those off right now.

I’ve decided that for our next vehicle purchase, we’re going to pay cash. I understand that we may not be driving the newest, hippest cars out there, but we’re going to have a car that gets us from point A to point B. Back when the tree fell on our house in January, I was able to get a 1994 Oldsmobile Achieva from my very gracious aunt. I have been so thankful for that car! It may not be the best looking, but it does the job and I love it. We can afford a car payment, but my thinking is if it isn’t broke, don’t fix it.

I want to have enough money saved up that in the event I am able to stay at home with our children. With me not bringing in a stable income from the bank, I’d like to know that we’ve got an emergency fund to cover everyday living expenses in the event something horrible happened. Let’s just say that I lost my job (knock on wood); I’d rather have the money that I normally would be putting toward debt reduction to be able to make the monthly payments on those loans and be able to pay living expenses rather than have less principal on the loan. That’s just my thinking.

Maybe once the economy gets better I’ll start being more aggressive in paying off our debts. Right now, this is working for us, so I’m going to continue to do what we’re doing. Of course I’m going to keep trying to make as much money as I can online by the different avenues I’ve discovered, and I’ll be putting that into savings.

Do you think I am doing the right thing by saving instead of paying off debt in this case? 

Posted under My Debt Reduction, Student Loans