Rules to Grow Rich By - Spending Tips - Money Making at Catch a Gideon

December 5th, 2006 by digerati

20. The best way to save money on a car is to buy a late-model used car and drive it until it’s junk. A car loses 30% of its value in the first year. This depends on your driving needs. If you have a long commute, and your job performance depends on your timeliness, you don’t want to continue to driving a car that is getting closer to “junk” status. Buying a car that is just a few years used is a good option for most, but driving until it breaks down is not safe.

21. Lease a new car or truck only if you plan to replace it within two or three years. Usually, the rule of thumb dictates never leasing, so this is an interesting conditional. There are some situations where you know you won’t need a car a few years into the future. For example, maybe you’re moving to a city with decent public transportation and no need for a vehicle, like New York, or maybe you’re only in the United States for a few years before heading back to Europe. I can understand leasing in these situations. You have no intention to keep the car, and you have low monthly payments.

22. Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower. Ah, the curse of the “early adopter.” I’m exposed to this first-hand as I attempt to find a new notebook computer. I want something that will last five years as my previous notebook did, and I’m trying to get excellent features like abundant RAM, WUXGA resolution, and a speedy processor, but it’s not quite fitting my “budget.” I’ll probably end up settling for something less powerful, and therefore less likely to last five years.

23. Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11 months in advance. It’s like Money Magazine is reading my mind. I’m working on airline tickets to California in November. I should have purchased the tickets before Labor Day, but here we are. I’ll end up spending about $450.

24. Don’t redeem frequent flier miles unless you can get more than a dollar’s worth of air fare or other stuff for every 100 miles you spend. If I fly Continental Airlines on my trip to California, I should pass the threshhold of 25,000 miles, which should earn me a free flight. Here’s their chart for flights within the U.S. According to this rule of thumb, if the flight would normally cost $250 or more, than using 25,000 miles would be worth it. When I redeem the miles, I will undoubtedly be limited to a select number of flights.

25. When you shop for electronics, don’t pay for an extended warranty. One exception: It’s a laptop and the warranty is from the manufacturer. I usually don’t go for the extended warranty on anything, including laptops. The standard manufacturer’s warranty should be sufficient. Any problem I’ve had waith a laptop occured early on in its life. Extended warranties are usually nothing but bonuses for salespeople.