Used car tips from a pro

So I just started my internship at neighborsgo (the community news operation of the Dallas Morning News, as we always say) and so I got somewhat caught up in that last week and so I didn’t post. NEVER FEAR. I want to work on posting a lot more often.

Anyway, my last post was about shopping for used cars, but I’m not the pro. The guy I go to to tell me what a good deal is and when I’m getting gypped is Alan Johnson. He also has another name – Alan the Answer Man, or Double A. You don’t need to know his credentials, besides the fact that he is the Answer Man. (OK, he works on cars a lot.)

Here are a few of his tips:

>”A good body shop can disguise” when a car has been in an accident. All of those privately owned, Mom n’ Pop car dealerships aren’t the best places to shop. “A reputable dealer won’t sell you something like that. Used lots buy auctioned cars. A reputable lot will let you know when (a car) has damage. Reputable dealers send the crap cars to auction.”

> So if the big, good car dealers aren’t gypping you, how do they make their money? “Big dealers make their money on bank interest and you coming in to get it serviced,” Double A says.

> Wait, can’t you just find out what happened to the car through Carfax? “Carfax helps you, but you don’t know 100 percent.” Even if a car has never been in an accident, you want to be very wary if the car has over 80,000 miles. Don’t bother at all if it has over 100,000.

>”If you open up the hood and it smells like antifreeze, there’s a leak,” Double A says. He also warns to keep an eye out for “Tape, cracked belts, a cracked hose.”

> If you bring a pro like the Answer Man with you, he will also be able to tell you if the car has been repainted, or if a bumper or door has been replaced. One way that you can tell is by looking at the bolts that hold those parts in place. “Sometimes they don’t quite line up.” Look for if there’s a circle around a bolt. If there is, that’s where an old bolt used to be, meaning the part was replaced, and the car has had damage.

> “They key is, they’re in it to make money.” That may seem obvious to you, but Double A continues that though you know the car company won’t go any lower than the price they bought it for, you can still negotiate on things like free oil, tires, tire rotation, and other tune-ups. Double A hasn’t paid for an oil change in 20 years.

> Side tip: Once you have your car, be conscious of where you park it. More specifically, maybe don’t go for the closest spot in the supermarket parking lot. “Who else parks close? Fat people. They park close and open their door wide and give you door dings.” His words, not mine.

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Shopping for a used car

First of all, for those of you wondering if my mother was shocked and/or embarrassed by me blogging about all of her risky savings habits last week, nope. She thought it was hilarious. It would take a lot more than that to embarrass MY mom.

This week I’ve been helping my brother shop for his first car. I got my first car two years ago, so I felt somewhat responsible for helping my brother with the process. We’ve been going to dealerships all week with little success, and every time he finds a car online he likes, it’s sold by the time we get there. But he’s determined to get a steal like I did – some hard-nosed negotiating got the price of my 2007 Ford Focus down by several thousand dollars.

I love that car so much.

Now, if you’ve gotten your first car yet, you know that once anyone hears that you’re in the market for a used car, everybody knows somebody who can help you, whether they’re selling a new car or they know “so much about cars” that you simply must consult their expertise. What you end up with is a long list of people to call and a bunch of contrary advice about which car to get and not get and so on.

So my first piece of advice: PICK ONE PERSON to listen to that you really think you can trust and use their advice to evaluate the cars you look at. Choose someone who is going to get you a car that lasts, not a ‘hot looking car’.

Think you can trust the internet? Prepare to be exhausted by reading reviews. Only trust reviews by professionals – if you’re looking at reviews by your average Joe, you can find a ton of negative reviews about almost any car. People like to complain online, don’t rely on them.

But you also have to do your own research. Use Kelley Blue Book to determine what a fair price for a certain car is. Use Carfax to find out if a particular car has been in an accident and how many owners it has had.

Once you get on the lot and you get to a car IN YOUR PRICE RANGE, look it over thoroughly with your resident expert at your side. (Hopefully they already know what to look for.) Look under the hood, in the trunk, at the doors, by the tires, at the amount of space in the back seat, how well the AC works, what the engine sounds like when it starts up, etc. If the interior isn’t clean or there are little scratches on the paint, the dealership will probably fix those for you if you buy the car, but make sure to remark that you expect them to. Don’t let your expert do all of the inspecting – check everything out yourself, as well. You might learn something. The last part of the inspecting process is taking it out for a drive and seeing how it handles.

Something else to consider: Is this car going to bring your insurance rates up? My brother was looking at a two-door Scion, but in the end we decided against it because it would almost double his insurance to have a two-door.

If you really love the car, it’s time to start negotiating. Go low with your first offer. The dealer will look skeptical and say “We really can’t go that low” and try to kill the idea. Make it sound like you might look somewhere else. (Hint: The price you see online is much closer to their actual ‘lowest possible price’. Remember, they at least have to profit on it.) Hmm and haw about not having that in your budget, and then try saying to your expert, “well, we saw this other car at this other dealership, we can try back there again.” The car dealer who is attending to you will then say “well let me see what I can do” and run back into the dealership to buy time and “talk to the higher ups”. He’ll come back either with a lower price or offer to do some “nice detailing” on it.

If the offer still isn’t low enough, say that you’re going to head home and think about it. The dealer will warn you that this car will go fast, and they aren’t lying, but don’t freak out too much. Either come back later in the day, or call back the next day, at the latest. Ask if they now have a better offer for you.

Emergency budgeting: For when you’re all out of cash

Having just gone through the process of graduating, moving out of my apartment, getting someone to sublease my apartment and driving back down to Dallas, I find myself with considerably less in my savings account than I typically have. A sudden drop in funds is what happens whenever you go through a life change (heck, happens to me every time I would go on Christmas break). In addition, as soon as I got back, my Dallas friends wanted to go out and spend money on food and drink and good times. Hold your horses, guys. I have to draw up a new budget.

Guidelines for creating your emergency transition budget:

> Keep in mind how long it is going to be until you can get a solid flow of cash coming in again. Now, how much money will you have available to you until then? Check the money in your account and count the days until you have income.

> When you’re in a situation like I am and you’re refusing to return to microwave dinners but you can’t quite afford to buy real dinners yet, buy lunch food type stuff. Buy lunch meat, bread, eggs, fruit, bacon – things that you can make lots of meals out of fairly cheaply. If you buy the right things, you will have enough to create variety in your meals so that you won’t get bored.

> Let your friends know that you can’t go crazy with the spending right now. Tell them that if they want to go out to lunch, then you’ll have to go home for dinner and then meet them after. Tell them that if they want to hit up the mall, you’ll come with them, but you’re just window shopping. Good friends are always supportive of this. Also, see some of my previous posts on how to save money on going out and getting drinks.

> For those of you now living on your own, be very aware of how to save on utilities. I’ve done previous posts on this. I’m not living on my own for the next several months, but I’m already practicing by speeding up my showers and not opening windows when the A/C is on.

A TED lecture by LearnVest: Five Financial Rules to Live By

Hey guys, I just quick wanted to share with you this awesome lecture by LearnVest CEO Alexa von Tobel.

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She presents five basic financial rules to abide by, no matter your financial situation:

1. Live with a budget

2. Prioritize debt repayment

3. Build and maintain an emergency savings fund

4. Negotiate your salary

5. Start saving for retirement now

I’m sorry that this isn’t much of a post, but I promise, it’s worth your time to read that article and watch the video. Alexa says a lot of the things that I’ve said in my blog, but she ties it all together a lot more nicely. And she also presents some staggering facts about the financial situation that most Americans are in. It is the hope of the author of this blog that my readers will be in the minority of people who choose to not only educate themselves about finance, but use that knowledge to create a healthy financial future for themselves. When it comes to getting smart about money, you can never start too early.

Buying a home: The very basics

Man, it has been a long time. I’m really sorry about the hiatus, everyone, but spring break/school/work/senioritis got the better of me for the past two weeks. But NO MORE! Today, you are going to learn about financing your first home, and you are going to LIKE IT.

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Now, for most people out of college, you plan to rent an apartment or a little house to start out with, and that’s fine. Renting, when you don’t yet have a stable financial situation, is a smart decision. But for those of you who are going to have a much better starting salary than myself (I’m looking at you, engineering grads), buying a house is not implausible.

Just don’t be dumb about it. As my finance teacher would say, you want to avoid being “house rich and cash poor.”

Once you have a full-time job, you can go to the bank, tell them your salary, and they’ll help you calculate your monthly expenses. Once you’ve determined how much of your monthly salary can go to a mortgage payment, they’ll offer you some options. Likely, you’ll make a payment of several hundred dollars every month for the next 30 years to pay off your house, with a certain interest rate.

Now, you also have the option to buy ‘points’, which will get you a lower interest rate. If you stay in your house for a certain amount of time, the points will pay for themselves. Points usually cost a couple thousand dollars (depending on the worth of the house).

As with most things, make sure you get the lowest interest rate that you can, and pay it off as quickly as possible. Down the road, whenever you’re making more money in, say, 10 years or so, you may want to refinance so that you can make larger payments per month in order to pay it off more quickly. Remember, houses cost a LOT of money, so refinancing could potentially save you tens of thousands of dollars.

Do you like the little drawing I did for this post? See the little contented-looking dude next to the house? That could be you, if you’re a smart home buyer.

Man it feels good to be posting again! I’ll see you all again next week!

Do I need a credit card?

This semester, I’m taking a finance class, which is proving to be really useful. I’ve never had a credit card myself, and honestly I’m a little afraid of getting one. I’ve heard too many horror stories of college kids going ridiculously into debt because they charged their whole spring break vacation on a credit card and now they can’t pay their bills. According to my finance teacher, over 80 percent of college students currently have a credit card, and roughly 1 in 4 college students is $3,000 or more in credit card debt.

Whether or not you actually need a credit card is an ongoing debate. Some people think that you need one in order to establish credit or to make big purchases such as a house or to finance a car. Other people have them just in case of emergency situations, such as your car breaking down and a tow truck is not within your current budget. There are also the folks that say that you never need to get a credit card – you can build your credit based on whether or not you pay off car, house, and college loans, etc. Whatever camp you are in, chances are that at one point or another in your life, you, your spouse, or your child (oh no) will have a credit card.

My finance teacher seems to think that there are good reasons to have a credit card, such as some of the reasons listed above. But she also drilled it into us that we should not buy meals or vacations with a credit card. Credit cards allow you to live outside of your means for a short time – until the bill comes, and you have to pay it all back and then some. Some people think that they can just spend all of the money that they want on a credit card and then file for bankruptcy and then get off scott-free without having to pay any of it back. WRONG. Any charges made within 20 days of the filing date are charges that you still have to pay off. Also, any personal loans you take out within 40 days of the filing date also have to be paid off.

Did you know that your interest rate on your credit card can be increased even if you are paying your bill on time? Yup. That happens when you pay back other lenders late. Or, for any reason that the credit card company feels like. Which is why it’s wise to only use credit cards for emergency situations. Just something to keep in mind.

 

Bad Monetary Advice

I’m not saying that I know everything about money. I’m really just learning by doing, and by doing my research. Here are some of the things that I have heard or read that will definitely hurt your finances more than they help them.

– If you see some hot shoes you really want, just buy them, but keep the receipt. When the shopper’s high wears off, you can decide if you really want them, and return them if you don’t.

If you don’t have the self discipline to not impulse buy in the first place, you won’t have the self discipline to go back to the store when you realize you don’t need those sexy shoes anymore. I’ve done this myself – I’m honestly just too lazy to return things. It just seems too arduous to drive to the store I got the shoes from, and then give them my address and all of my information all so that I can get the opposite of a shopper’s high. So now, I just avoid all that drama by being smart and not impulse buying in the first place.

– Get a credit card and pay the minimum every month. Because you obviously wouldn’t want to give the credit card companies more than you have to.

People seriously think this. Most people following my blog are already fairly aware of the evils of credit cards, but in case you haven’t heard – ONLY USE CREDIT CARDS FOR EMERGENCIES, because the interest on them adds up fast. And always always pay above the minimum, because the faster you pay off your credit card purchases, the less interest you pay overall. Now is definitely not the time to get swamped with credit card debt. Or ever.

– Eating out is cheaper than cooking, because with cooking you have to buy all of the ingredients, and you always end up buying more than you use in a recipe.

I think that this is a rather short-sighted assumption. Cooking is cheaper than going out to eat the majority of the time, because any ingredients you don’t use you can always save for later use. And leftovers of cooked meals are great for lunch the next day. When you go to a restaurant, you don’t just pay for the food, but for the person cooking it and the establishment itself, etc.

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So I’ve been thinking about my subject matter, and the fact is, finances are a lot simpler when you’re in college than when you enter the real world. I do anticipate keeping this blog going once I’ve graduated, but it can’t hurt to prepare ourselves for when that day comes. So, from now on, I’m going to incorporate occasional lessons about financial concerns that you’re likely to have after college, such as insurance, taxes, and a mortgage. I don’t know about these things on an experiential level, but I’ll do my research the best I can and hopefully bring the things that I learn to my readers in a convenient, easy-to-understand way. Until next time,

Rachel

Accounting for new expenses

I knew that this would happen. I knew that as soon as I had figured out approximately how much money I could expect to save this semester – to start paying college loans, or for an apartment, or something important like that – something unexpected would come up. I only have my own clumsiness to blame. I dropped my phone into some water, and this time, it didn’t recover. So, since I had to buy a new phone, I decided it was time to join the rest of modern society and get myself a smart phone. I paid for the phone myself ($100), and now I have to add a data plan to my monthly expenses ($30/month) plus insurance for the phone ($10/month). Sure, I consider the convenience of a smart phone to be worth it, but then they had to cut hours at one of my jobs. So now, I’m getting less work hours (and less money) than I did before. And I have even more to pay for.

Tightening your belt is never a pleasant experience.

So, what do you do when you fall into the kind of situation that I am in right now? First, re-budget. Figure out how much less money you will be making, and determine where you can most afford to make the sacrifice. Can you afford to party less? Can you afford to use your car less often and save on gas? Can you sacrifice name-brand peanut butter and orange juice?

Pick up extra work shifts. If you had one of your shifts cut, just think of it now as a shift that you can move around to other times, depending on the needs of your fellow employees. Be the generous person who people can count on to pick up the slack. Don’t ignore those emails.

Don’t owe people things. I know that since you’re running low on cash, you have the urge to turn to your friends for help in your time of need. You might say “Hey, I’ll get you later.” But promises like that are just going to dig you into a hole. If you really need your friends to help you out, offer to repay them by helping them with their homework or with their chores. Or offer to be their wing(wo)man sometime.

Lastly, always make sure that you have money saved for instances such as this. Maybe you aren’t graduating soon, but you should still put money into a savings account regularly. Because no matter who you are, inconvenience is bound to happen, and you always have to spend more than you expect.

 

Cheap cooking from a seasoned “expert”

I’m still new to this whole cooking-on-a-daily-basis thing, so I got someone who actually does cook daily to send me a few recipes for me to publish. (FULL DISCLOSURE: This person is my boyfriend.) Not to mention, he manages to cook cheaply, but still doesn’t skimp on flavor. I plan to cook several of these recipes next week, so our resident “expert cook” knows that if these recipes are faulty in any way, I will find out, and he will pay to the full extent of girlfriend-law.

He has also included his own annotations on how much you can expect to spend per meal on these:

Oatmeal

– ½ cup water

– ½ cup milk

– ½ cup oatmeal

– pinch of salt

– 2 tsp brown sugar

– sliced banana

1. Heat water and milk on stove on medium heat until just under boiling

2. Mix in oatmeal, salt, brown sugar and banana

3. Cook until desired consistency, stirring occasionally

I bought a 30-serving container of oatmeal for $3.50, and bananas are $0.44 a pound, which usually comes out to about $1 for a week’s worth. Everything else you’ll probably have around anyway (substitute more water for milk if you need). That’s less than $0.30 a day for breakfast!

If you get bored of bananas, mix some other fruit in, or some maple syrup.

BBQ Sausage Potato

– 1 potato

– 1-2 sausage links, sliced

– ¼ onion, chopped

– bbq sauce

– butter, cheese, sour cream to taste

1. Preheat oven to 400

2. Poke holes in potato and bake at for 1 hour 15 minutes

3. When potato has about 15 minutes left, start heating sausage and onions stovetop

4. Cook sausage, flipping occasionally until brown on both sides

5. When potato is ready, slice and mix in fixings, top with sausage and bbq sauce

Potatoes are $0.88 a pound, so depending on size they’ll run you between about $0.50 and $0.75 each. I buy sausage that a local bbq joint makes (they sell it at the grocery store) and can get enough for three potatoes for $7.00. Counting in the cost of whatever fixings you’re going to use, each meal will run you less than $4.00, and if you buy a big enough potato, it can make a big dinner.

Chicken Soup …Stuff…

– chicken meat (I prefer boneless/skinless thighs)

– 1 can cream of chicken soup

– 1/3 cup flour

– 1/3 cup milk

– 1 egg

– seasonings (I like black pepper, salt, garlic)

– ¼ cup rice

1. Preheat oven to 375

2. Heat olive oil in a pan over medium heat

3. Begin boiling water for rice (1/2 cup)

4. Mix milk and egg in a shallow bowl, and flour and seasonings on a plate

5. When oil is hot, dip chicken in milk mixture, then seasonings, then lay in oil

6. Cook each side of chicken for one minute or so, until breading is browned

7. Remove chicken and place in greased oven pan

8. Pour cream of chicken soup over top of chicken and cover pan with foil

9. Bake chicken for 45 minutes or until there is no pink when cutting through the thickest part of the meat

10. When water is boiling, stir in rice and turn heat down to a simmer, cover

11. Everything should be ready at about the same time – serve the chicken and gravy over the rice

A pack of chicken runs around $5-6, the soup costs about $1.50, so counting that and a portion of the various seasonings and rice, this recipe should cost you no more than $8.00, and makes 2-3 meals. You can always make more rice if you want to stretch it farther, just remember to use a 2:1 water to rice ratio.

To make BBQ chicken on the oven, simply replace the cream of chicken soup with BBQ sauce and add a little red pepper to your seasoning mix.

“I remember this being really good when I was little” style macaroni and cheese with a side of broccoli

– 1 box macaroni and cheese

– 2 hot dogs

– broccoli

– salt

– red pepper

1. Cut up the broccoli and put it in a pan with the seasonings and a little water, place over low heat and cover

2. Cook the macaroni and cheese following the instructions on the box; you will need milk and butter (I typically use ½ the amount of butter called for)

3. At the same time, cook the hot dogs, you can do this stove top or in a toaster oven

4. When the macaroni and cheese is ready, slice the hot dogs into bite size pieces and stir them in

5. The broccoli will be ready after about 20 minutes

I’m not too sure how much everything in this one will cost, but not more than a couple dollars. You can skip the broccoli if you want as well, I just use it to add something healthy to this, and to make it a full two meals – usually dinner and lunch the following day.

Baked Sweet Potato Snacks
– 1 sweet potato
– brown sugar
– cinnamon
– cayanne pepper

1. Preheat oven to 400
2. Cut sweet potato into thin slices and lay out on greased baking sheet
3. Sprinkle with brown sugar, cinnamon, and just a pinch of cayanne pepper
4. Bake until crispy on edges, let cool and enjoy

Sweet potatos are around $1.00 a pound, and you get a lot out of each one, so this is a good cheap snack a

The College Life: Partying (on a budget)

I’m sorry I didn’t get to posting anything yesterday. A bunch of stuff came up. And then I had to go karaoke with my friends, which was awesome. (I don’t like to brag, but I heard from at least six people that I am, in fact, a rock star.)

I’m like most college kids, in that I like to have a good time and go get drinks with friends on weekends. But I also pride myself in being responsible about it – I don’t let people I don’t know buy me drinks, I don’t leave my drinks unattended, and I ALWAYS make sure I have a reliable way to get home (typically by way of a sober friend). And I try to take care of my friends in the same way.

Going out with friends is a big part of the college experience, so for most of us, we have a tendency to want to slack on keeping a strict budget when it’s Friday night and all your buddies want to go to a club. For a lot of people, it’s their biggest downfall – who can have fun when they’re being stingy with money and you have to pay a $5 cover to get in, and then $4 to $8 for every drink? So I’ve already plugged it into my weekly budget.

> For those of you who plan to have a drink or two, have a drink before you leave the house (after making sure that you have a designated driver, of course). It’s much cheaper than getting a drink downtown. But don’t be the guy who gets drunk before they leave the house. Not classy.

> Don’t bring that much money with you. Bring about $20 – enough for cover, plus 2 or 3 drinks. (You don’t want to get too drunk when you’re downtown anyway – it’s unfair to the friends that have to drag you around.)

> If you want to go wild, it’s really just better to party at your own place with your own drinks. It’s safer for everyone involved (but make sure your valuables are in places where they won’t easily be damaged). Plus, it’s much cheaper. Tell all your friends that it’s BYOB so that they don’t drain whatever drinks you bought. And my friends and I only invite close friends to our parties – if you have an open house party, not only is it more likely that someone will steal drinks you paid for, it’s pretty likely that you will attract the attention of the police. Those fines are not cheap, people.

> Thursday nights might have better drink deals than Friday or Saturday nights, and Wednesday is definitely cheaper, so aim to go out on those nights – it will be packed on Friday night, anyways. Just make sure you don’t have an 8am Thursday class.

> DON’T PARTY EVERY WEEKEND. I promise that there are other fun things to do. Or be the designated driver every once in a while – your friends will be grateful, plus many bars give free sodas to the people who say they’re the DD.

Like I said, be responsible. You can, in fact, be responsible and have fun at the same time. And a big part of that is saving money.