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Friday, March 24, 2017

Cheap Summer Travel

Posted by Tim Stobbs on June 30, 2009

Ah, summer.  The road trip season.  So with that in mind, how do you take a vacation that is fun, but won’t break the bank.  I typically suggest camping as a good option for some people, but if you don’t have the equipment try to borrow some and try it before investing too much money in supplies.  Spending $500 on gear you don’t use more than once can turn a money saving venture into a money wasting one very quickly.

Even if you don’t camp, I’ve tried to make some of this tips generic.

  1. Bring you own food or buy it at a grocery store.  Even backing a few basic supplies to do lunch/breakfast on the road can save you a lot of money over a two week trip.  All it really takes is a bit of planning a cooler.  We typically take things that travel well like harder fruits or veggies like apples and carrots over items like pears that bruise easier.
  2. Consider a shorter trip.  People often underestimate trips that are closer to home.  Beyond having more time to relax, you can also save gas and see explore places you never been and can get back to easily.  We typically alternate years with bigger/longer trips every second year.  That way we balance costs with enjoyment.
  3. Leave later and come back earlier.  Want to have a really great trip?  Then leave a day later and come back a day early.  Having that time to unwind at either end makes things SO MUCH easier.  You can ease back into your regular life without the shock of coming home at 6pm the day before you got back to work and having to buy groceries, wash the car, do laundry and unpack.
  4. Seek out the out of the way.  People often travel to the big parks or cities as the main places to see and do, but going out of the way can often result in unique memories as well as cost savings.  Camping fees, hotels attraction fees are all often cheaper in smaller centers so next time try out the smaller towns you might be surprised how much fun you have have there.
  5. Be flexible.  I’ve gotten away from having a set schedule on trips and now more often than not wing it with nothing better than a vague plan of I want to see these things and be away for about 10 days.   By doing that you can often find good deals at the last minute or linger in places you happen to enjoy more than you thought.

So there are my tips? Do you have some other ones?  If so please share.

Pay off Debt or Invest: How do you Decide?

Posted by Tim Stobbs on June 29, 2009

It’s one of the classic personal finance issues: do you invest or pay down debt?  People often answer the question: it depends on the numbers, which is true.  Pay off debt at 20% on a credit card will crush likely most investments, but if your mortgage is at 4% and your investments usually get 6%, the math gets a little complex.

The major issue if to really compare you options you need to make them equal.  Trying to compare just straight percentages is stupid, since you often need to consider if that money after tax or before tax.  If it is taxed, then how it it taxed: dividends are much cheaper than interest.  I’m not saying the math isn’t difficult at times, but really it varies so much from situation to situation that you really need to do it yourself and find out what works on paper.

Then we have to evaluate the more fuzzy issues like risk.  A extra mortgage payment grants you a after tax return equal to your interest rate at no risk.  Stocks on the other hand have a lot more risk, so you have to weigh those issues.  How you do it will vary from person to person.  I tend to keep in mind the fact you need to balance all your investments for risk.  So if you are fairly heavy into high risk investments and you get some extra cash, consider a lower risk option for that extra money.  You don’t want to be too conservative or risky, but rather balanced on the overall picture.

Then last, but most important, you need to consider your personality.  Often decisions we make are not logical, but rather emotional.  You may know the math says you are likely better off investing, but you really still want to pay off the mortgage early?  It’s ok to pick the mortgage.  Not even decision in life must be optimized for maximum return.  The point is are you paying off debt and investing regularly? Yes, great you are ahead of most people in the world.  So don’t panic about trying to do everything right.  Remember to do what works for you.  There is no point investing if you are mentally not really for the risk.  The sleep at night factor is worth something so don’t sell our yourself out for a 1% extra return if you don’t think you will handle it well.

The Green Spot: Driving a Hybrid

Posted by Tim Stobbs on June 26, 2009

So recently at work I needed to borrow a fleet car and by luck got to drive a 2008 Prius for the day.  So here are my thoughts after my ‘test drive’ of a hybrid which was mostly highway driving.

First off you may think a hybrid would be gutless, but this car has some speed when you need it.  I was very happy with the ease of passing cars on the highway.  Perhaps the only real differences I noticed driving the car was the brakes slow you down a lot faster than most cars because it tops up the battery while doing so.  The other major difference was the  both car engines (gas and electric) turning off when at a stop light.  Other than that there are a few little differences like there is no park setting on the stick you use a button to do that instead.

I thought the car was highly educational.  Having an instant readout of your current fuel consumption is very interesting.  I learned that passing someone using a lot more fuel than I would have guessed (you spike to about 18 L/100 km).  Also I learned quickly any other faster acceleration uses a lot of gas as well.  I found by dropping speed from 111 km/h to 109 km/hr saves you about 1 L/100 km  off your fuel consumption, but turning off the air conditioning only saves about 0.2 L/100 km.  Yet a bad piece of highway will cost you about 0.5 L/100 km.

Now because of all the tracking on the car I know for my short day trip I averaged 6.1 L/100km for mostly highway driving.  My current car, the Echo,  is rated for about 5.5 L/100km for the highway and 7.0 L/100km for in city.  So the reality is unless you do a lot in in city driving a hybrid just isn’t going to save you much money on gas.  If you do a lot of city driving a Prius might be right for you.  I check on the city mileage rating, it was 4.0 L/100 km.

The car is a fun toy to drive if you want to improve your milage by adjusting your driving habits, but depending on how much in city verus highway driving you do don’t expect to save much gas with one.   So in my case I likely won’t be getting a hybrid very soon, but I will watch their developments with interest.