Save by Beating Deflation with Inflation!

And to save by beating deflation, I mean inflate your tires!  Honestly, who wants to spend their hard earned money on tires for their car?  Really...Who buys a new set tires and run to show them off to their friends?  That's right; Nobody.  Wouldn't you rather spend your hard earn money on fancy toys or clothes?  Or just save money perhaps?  But it's one of the most important part of the car.  It's the only part that touches the ground!  I suffered from laziness lately, and insufficient tire pressure is costing me in several different ways. 

1) Tire Wear - Due to insufficient and uneven tire pressure, I will have to replace my tires prematurely.  Although lower tire pressure gives more traction for the car which can be good, more traction means more wear.  Once the tires are worn, no low enough tire pressure can safely help you.  And new tires mean saving less money towards my goal.  (DO NOT be cheap and over-inflate your tires.  This can make your car handle unsafely.)

2) Gas mileage - I don't typically drive my car hard, so I'm getting pretty good mileage as is.  But every little bit of saving helps.  Having lower tire pressure can increase traction for the car, but MPG suffers as a result.  Too much traction will make the car work a lot harder than it needs to be.  This is especially true when cruising on the highway.  I know my miles/gallon can easily be improved just by making sure I have the correct amount of pressure in my tires. 

3) Insurance - Luckily, I do not drive unsafe or too fast, so my tires have not cost me here yet.  Without proper tire pressure, a car can be unpredictable in adverse weather.  Living in Seattle, it's pretty wet much of the year.  Bad tires can easily make the car lose traction and result in a collision on wet roads.  Not only would the car need to be fixed, the premium hike on the insurance as a result from the accident will be costly.

I'm promising myself to check my tire pressure at least once a month.  Only 3 minutes a month and my tires could have easily last twice as long.  Huge saving/work ratio.  Do yourself a favor, learn from me, and do the same!

Smart Banking 101

Let's build on what I talked about previously a little further.  As I've said, I leave the bulk of my money in a safe Online High Yield Savings Account.  They provide the most competitive interest rates with immediate access (1-2 days) to your money, something not offered with CDs.  However, not 100% of my money is here.  Why?  I'm fortunate enough to have a local credit union near me with something better for a portion of my money.  Being a resident of Washington State, I have access to the Boeing Employee Credit Union (BECU) which offers a very competitive interest rate of 6.17% for the first $500 in my checkings account and the first $500 in my savings account.  So just for banking $1000 of my money with them, I am making $5.14 per month!  On top of this, any referral I get for BECU rewards my friend and I $25 each!  Talk about easy money.  After the $500 in each account, BECU only offers an interest rate of 0.5%, so I'm better off with my American Express Online Savings Account after the first $500 in each account.  I am one to capitalize on every opportunity for my money to make more money.  After the initial setup, there's no more work involve! So get to it!  Look for a local credit union to replace the big banks here.

Smart Saving 101

Let's talk about where to save smart today (and it's not at local bank savings account).  With traditional banks (i.e. Chase or Bank of America) paying such now interest rates on savings account, what's the point of having one?  I just checked my savings account, and Chase is paying me 0.01%.  Yes, you read that right: ONE HUNDREDTH OF ONE PERCENT.  As you can see from this post, my girlfriend hates Chase.  I had this account since my mom opened it for me before I entered college, which I will be closing very soon since it is completely useless. I have the minimum amount needed [$300] in the account just so I don't get charged a monthly fee.  They are hoping for low-income customers to dip below $300 so that they make their money off the monthly service fee.  The service fee for a Chase Savings Account is $5.  Let's put this in a scenario: You accidentally dipped below the minimum amount once.  For that month, you get charged $5.  How long would it take you to make back that money?  Let's say you put in money so that it's back at the $300 minimum.  At 0.01%, it will take you 167 years to make back your $5.  That's ONE HUNDRED, SIXTY SEVEN YEARS!  That's how insignificant their interest rate is.  So why would you want to use it? Stop being lazy and switch to something better.

If you go ask the bank for a better option, they'll say that they have another product with higher interest rates.  Behold the Certificate of Deposit, aka CD.  Summarized, a CD is an agreement to deposit a certain amount of money for a certain amount of time.  If you withdraw your deposit before the end of the CD term, you will lose some or all of the interest earned.  Pretty strict if you ask me.  Let's take a look at current rates at Chase as of 10/4/2011:

Wow, for only 5 years, you can earn interest at 1.25%!  Or even better, 10 years will get you a 2.25% rate!  So why didn't I open a CD?  Because I need the flexibility in case of an emergency.  Interest rates of 1.25% or 2.25% is not enough for me to stash away money so that I can't touch it for years.  I'm sure most of you agree.

Let's move on to my solution to storing my money.  I have an American Express High Yield Online Savings Account.  Other high yield savings account include banks like ING, Everbank, Ally, SmartyPig, and more.  Most of them are online banks where there is no actual branch, but you are trading in convenience for higher rates.

 

Currently, American Express is paying 1%.  It may not seem like much, but I have complete and quick access to my money.  This is such an easy way to earn money from doing nothing.  I've withdrawn money out of American Express twice now, and both times, I had the money NEXT day even though they claim that it might take an additional day or two.  I chose American Express because they offered very competitive rates and customer service for me was top notch.

Now, let's compare American Express to Chase Savings and CDs.  It is 100 times higher than my Chase Savings Account and in order to beat American Express Online Savings, I will have to get a 5-year CD.  Instant access to my money or 5-year wait for nearly the same rate?  It's a no-brainer if you ask me.

Why not have your money make 100 times more than it's making right now?  Make a move to a high yield online savings account today.  Stop being lazy.  It only take 15 minutes to set up and maybe a week to verify all of your information. Remember, every little bit of savings count, and it's the perfect way to begin a little passive income.  You only have to do this setup once to begin earning forever.

Why Talk About Money?

Lately, I've been thinking about obsessions.  This came to mind when my little brother became obsessed with his new toy, a motorcycle.  He would ride his motorcycle at every opportunity, rain or shine, night or day.  He constantly browses the internet looking for new equipment and gear.  It's all he talks about.  I don't blame him though; it's something he's never had before but now finally does.  This is exactly what brought me to the realization of my interesting obsession: Money.  Should I feel guilty for being obsessed with such a blunt subject?  I don't think so.  This one item is something everybody deals with in one form or another on a daily basis, so it's hard not to be intrigued by it.

As much as my mom tried to hide it when I was a kid, I knew that money was always a concern for her.  A single mom plus two kids plus minimum wage is hard math no matter how you put it.  Needless to say, I understand what it is like not to have a lot of money growing up.  I commend my mom for single-handedly raising two [what people would consider successful] boys after immigrating to the U.S. at just 16 years old.  I am not letting my perspective of money growing up on the poor side go to waste.  This perspective developed my respect and responsibility with money.  My goal of earning my lottery is not to have a mansion and party like a Rock Star.  It is not to own all the cars, clothes and toys that I want.  My goal is to release my mom and I the stress of worrying about money.  We have done this our entire lives and I no longer want it to be an issue.  But as with everything, I know I'll have to work for it.

Now that I've graduated college and recently entered the working world, conversations with my friends changed from upcoming classes and finals --to-- work, and of course, money.  Everyone work for a reason, and in just about all cases, that reason is money.  I find what my friends do with their money very interesting, given that everyone has a different approach to handling money.  While most of their money comes and goes, mine steadily piles.  How you shape your financial habits at this point in life is critical to me.  They want to be in my position, and they CAN be in my position.  And so can you!  I share my advice with them (it's not secrets that couldn't be found on the internet), and whether they take the advice or not, it's up to them.  I've read many articles for tips to make and save money, and not everything applies to me.  I'm not reinventing the wheel; I'm just piecing all the useful advices together that is applicable to an average person (me) and making it work.  I don't claim to be the next Bill Gates or Mark Zuckerberg.  I'm not part of the rich 1% group.  I am, however, a normal person which the other 99% of people can relate to.  You can follow me and see what I do and how I do it.