Get Into the Savings Habit by Putting Away 50% of Your Extra Income

Getting into the habit of saving if you haven’t started is a serious psychological hurdle. To help ease into it, start saving half of any money you can count as “extra.”

As personal finance blog Budgets Are Sexy points out, any money considered “extra” isn’t something you’re likely to miss. If your bills are paid and you’re well fed, the leftovers are likely going to go towards something you don’t necessarily need. The impulse to buy things you want is what keeps you from saving to begin with. However, if you only save half of your extra money, you can scratch that itch a bit while still preparing for the future:

It’s called the ‘Save 50% of all your EXTRA money’ pill, and once you take it you can’t stop. Similar to saving 50% of all your income – which is often cited as ‘not possible’ and ‘why the hell would you want to do that??’ – this one gets you started by concentrating on all the extra money that comes in outside of your regular income. And since it’s all ‘extra,’ you won’t miss it!

Over time, you can grow how much you save and adjust your lifestyle as needed. Maybe you’ll discover that having a solid emergency fund is more worthwhile than going to the movies every week. Or maybe saving in the short term will make it easier for you to adjust your lifestyle to increase your savings later. Either way, if you’re not saving, giving yourself a gateway drug will do you more good than forcing yourself into a savings plan you can’t handle right away.

The pros of adding a teen driver to an auto insurance policy

Teenagers are the riskiest drivers on the road – and this is apparent by how much insurers charge them or their parents for auto insurance.

According to Russ Rader, spokesman for the Insurance Institute for Highway Safety (IIHS), crash rates for teens are three times higher than those 20 years of age or older.

Whats more, National Highway Traffic Safety Administration (NHTSA) data show that traffic crashes are the leading cause of death for teens, accounting for one-third of all deaths of 16- to 19-year-olds.

What may come as a shock is that adding a teen driver to an existing auto policy can sometimes double the annual premium – but it all depends on the state where you live.

FOX Focus: Is it worth spending the extra money on travel protection?

MILWAUKEE — It happens to all of us. Youre booking your vacation online and get to that screen — travel protection. Do you need it? Is it really worth spending the extra money? We get answers in this FOX Focus from an expert with Funjet Vacations.

Auto insurance: Stay insured while on the move

Insurance renewals for automobiles and two-wheelers continues to be a bugbear for the road transport authorities and the insurance regulator. A recent report released by the Insurance Regulatory Development Authority of India (Irdai) reveals that over 75% of the two-wheelers operational in India are running without insurance. While new owners buy insurance policy at the time of delivery, many do not bother about checking insurance renewal dates and making timely renewals.

Having third-party insurance for your automobile is mandatory as per law. Here is a close look at how even a small delay in renewal can come back to haunt vehicle owners.

When should you renew your auto insurance policy?

Your automobile insurance must be renewed well in advance before its date of expiry to avoid unsavory situations. For example, a policy taken on January 1, 2015 will be valid till the midnight of December 31, 2015. This means, if you have not renewed your policy on December 31, and meet an accident or incur a loss on January 1, 2016, you cannot claim against your insurance policy.

Also, note that the date of coverage here is not as same as the date of issuance. A policy issued on January 1 may not start the coverage on the same day. Therefore, check the coverage date and not the date of issuance of the policy.

Consequences of failing to renew on time

If you drive your car or a two-wheeler that does not have insurance, you are committing an illegal act. You can be fined by the traffic police and booked for serious traffic right violation. If your vehicle gets stolen or is involved in an accident, you will get no help from the insurance company for any claims if the insurance has not been renewed on time.

Other impacts of a failed insurance renewal

No protection: Your vehicle will longer be protected without an active insurance in place. Even if your insurance expired an hour earlier, you will have to bear all losses if the vehicle gets involved in an accident or theft.

Denial of NCB claim: If you allow your two-wheeler insurance policy to lapse for a period of more than 90 days, you will have to forfeit your No Claim Bonus (NCB). This means when you renew your policy the next time, you will not get the benefits of NCB.

Need for physical inspection: If you renew the policy after the date of expiry, you will need to bring your vehicle to the insurance agent for physical verification. Therefore, if you are travelling or not available in person, you will have to wait and stay uninsured until you can bring your vehicle for physical inspection by the agent.

Ways to renew your insurance policy

Online renewal: To avail online renewal, you will need to log on to your insurer’s website and look for a policy renewal link. Add in your vehicle details along with the policy number, etc. You can choose to include any insurance add-ons as per your need. The online premium calculator will calculate your due premium. Pay the premium online and you will receive your policy documents by email.

Offline renewal: If your insurer mandates physical inspection, you will not be able to renew your policy online. You will need to physically visit your insurance agent, get your vehicle inspected and pay the premium at the insurance company’s office.

It is mandatory for you to have an auto insurance policy in place at all times. So mark your calendar whenever you buy automobile insurance so that you will be alerted about the insurance expiry date every year before the due date.

The insurance regulator has introduced a 3-year term for two-wheeler insurance, which gives you the freedom to relax for at least the next three years. Therefore, if you think that you are likely to forget your due date for insurance renewal for your two-wheeler, you can consider opting for a long term insurance plan.

The writer is CEO, BankBazaar.com

Will Higher Interest Rates Make Cars More Expensive?

CARS.COM As the Federal Reserve raises interest rates for the first time in nearly a decade this week, what does it mean for car shoppers? Experts say the immediate effects will be slight, but future rate hikes will likely raise the rates on your next car loan, down the road.

Related: What You Need to Get a Car Loan

What car shoppers should know:

How much will the rate hike increase interest rates on car loans right now?

Not much, experts say. The Feds rate increase was just 25 basis points, or 0.25 percent. Thats small, and its important to realize that interest rates are still low. The Fed rate is short for the federal funds rate, the interest rate that banks can charge to loan money held at the Federal Reserve to other banks. A rise in the funds rate generally causes other interest rates to rise, though not necessarily at the same time or by the same percentage.

Melinda Zabritski, Experians senior director of automotive finance, notes that the increase, though small, will affect interest rates on auto loans, but the impact will be very, very little, said Nariman Behravesh, chief economist at IHS, a consulting firm. Were just talking about 25 basis points, Behravesh told Cars.com.

Why such little effect?

Experian places the average interest rate on a new-car loan in the third quarter of 2015 at 4.63 percent. Thats up versus 4.47 percent in 2014s third quarter. Interest rates on used-car loans have increased similarly.

Mike Buckingham, a senior director at JD Power and Associates auto finance practice, notes that rates have risen over the past 60 days. Whats more, the Feds benchmark rate isnt the only factor that lenders use to determine your interest rate on your car loan.

Buckingham said banks determine interest rates based on how much cash they have on hand, as well as their assessment of market conditions.

I dont want to say the Fed funds [rate] is irrelevant, he said, but its not as if tomorrow, wow, rates will go up.

So where are interest rates going?

This weeks rate hike signals the likelihood of future rate hikes, which would likely push interest rates higher on future car loans. CNBC reports that most members of the Federal Open Market Committee, the body that sets the Federal Reserves interest rate, expect rates to be at 1.5 percent or lower by the end of 2016, climbing to the low-3-percent range by 2018.

Wont competition between lenders keep interest rates low?

It should have some dampening effect. Zabritski expects increased competitive pressure and a higher emphasis on subsidized interest rates from automakers finance companies to keep rates down.

Lenders have seen some incremental price increases in there, but they want to be competitive in the marketplace, Buckingham said. I think everyone looks over their shoulder and sees whos going to make the first jump [in loan rates], if any.

If and when rates increase, who will be affected more: shoppers with bad credit, or those with great credit?

Its hard to say. Buckingham said auto-loan rates will absolutely go up over the long term, but not any more so among lower-credit shoppers than those with good credit scores.

Zabritski said the Feds rate increase would drive likely a stronger impact for interest rates among lower-credit shoppers. Behravesh expects that, too, but he said the difference wont be much.

People who have lower credit ratings will see obviously bigger hikes as a result of what the Fed is doing than people with good credit ratings, Behravesh said, but its still going to be relatively modest increase, even in [loans for] the least-qualified borrowers.

Should I buy a car now?

Consumers shouldnt rush to buy their next car on account of this weeks news, Behravesh said, but it wouldnt hurt for anyone already in the market to take advantage of todays still-low rates.

If theyve got the finances, and they think that sometime in the next year they would like to buy a car, [theres] no harm in doing it earlier rather than later, he said. But this is not a strong recommendation.

Whenever interest rates go up whether its now or later how much will that affect my monthly car payment?

Less than you may think. Interest rates dont affect car loans as much as they do, say, home mortgages. A five-year, $25,000 new-car loan at 4.0 percent interest is $460 a month, but if your rate climbs to 4.5 percent, that payment increases just $6, or about 1 percent. Compare that to a 30-year, $300,000 mortgage at 4.0 percent, which leaves you a monthly mortgage payment of $1,432. If you raise the rate to 4.5 percent, it adds $88, or about 6 percent, to your mortgage payment.

Auto loans mask the effect of interest rates because theyre short, compared to mortgages. Theyre also quite flexible in terms of loan length. Lenders (and consumers) can always reduce the sting of a higher interest rate or a pricier car, for that matter by extending the loan terms, though it isnt necessarily a good idea.

Thats already going on. In the third quarter, some 44 percent of new-car loans were 61 to 72 months long, while another 27.5 percent were 73 to 84 months both record Q3 highs, according to Experian.

What matters even more than the [interest] rate itself is what the monthly payments are, Behravesh said. Lenders will exercise a lot of flexibility to keep monthly payments low, even in a higher-rate environment, he added.

Will the rate hikes affect leasing availability and rates?

Maybe, if all other things were equal. Zabritski said there could be an impact if consumers trade in their leases early to lock in lower rates prior to the expected hikes. But future leases are impacted by other market factors, like residual values, she added.

Automaker intervention affects those rates, too. Buckingham notes that although interest rates affect lease terms, automakers subsidize those rates so much that the actual increase shoppers would see is a mystery.

To the manufacturers, their cost of leasing will rise slightly via the interest rate, he said. What is unknown [is] will they pass it onto the consumer.

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Belgian college staff worried Paris attacker had been radicalized

A police commission is interviewing staff at a Brussels college after education authorities failed to act on concerns that a student who later became one of the Paris suicide bombers had been radicalized, two Belgian newspapers said on Saturday.

Spectators invade the pitch of the Stade de France stadium–Hadfi was one of the of the suicide bombers outside the stadium during the Paris terror attacks.Photo: AP

Bilal Hadfi, 20, named as one of the attackers who detonated a suicide bomb outside the Stade de France in Paris on Nov. 13, attended the Anneessens-Funck college in Brussels until he dropped out in February to travel to Syria.

The two Belgian Dutch-language newspapers, De Morgen and Het Laatste Nieuws, cited documents they said showed staff were seriously concerned about Hadfis extremist views, which were evident in the classroom.

The reports did not elaborate on the exact nature of the documents but said they showed the college director informed the Brussels education board in April that Hadfi, a French national, had traveled to Syria.

Committee P (le Comite Permanent de Controle des Services de Police), as the Belgian police oversight authority is known, is investigating why the information was not passed on to police, the newspapers said.

Soldiers patrol the streets in Brussels on November 24th while the city was in lockdown after a terror alert.Photo: Getty Images

Neither the college, Committee P nor the Brussels education board were immediately available for comment.

While there has been little hard evidence of intelligence and tip-offs falling between the cracks before the Paris attacks, Belgium has faced international accusations that underfunding and political in-fighting had left its security services the weakest link in Europes counter-terrorism defenses.

It was not clear when Belgian security officials became aware that Hadfi has traveled to Syria.

But on his return to Europe he evaded the intelligence services. They bugged the apartment he had been registered at, but he failed to show up, so could not be traced.

PLU takes step to make college more affordable for local students

A new scholarship at PLU removes cost from the equation. Called 253 PLU Bound, it is available to first-year students starting next fall. It targets students enrolled at the 61 high schools in the local area code.

The university promises to cover the cost of tuition of all eligible students for four years through a combination of federal, state, and PLU grants and scholarships and the state’s College Bound Scholarship program.

Njuguna said he liked hearing that the scholarship is not limited to a small handful of recipients.

“That it’s not competitive, that’s unheard of,” he said.

More students eligible

PLU already has partnerships with area school districts to bring local students to campus, but officials say the 253 scholarship opens the door to significantly more students, including low-income students.

Because the school has not offered this option before, PLU admission officials don’t know how many students will apply and have not set a goal, said Melody Ferguson, director of admissions.

FSU QB Everett Golson out for Peach Bowl, ending college career

Florida State quarterback Everett Golson did not make the trip to Atlanta for the Seminoles upcoming Peach Bowl game against Houston due of personal reasons, coach Jimbo Fisher told reporters on Saturday.

The specific reason for Golsons absence is a tied to a death in the family, according to ESPNs Matt Fortuna. Golson was expected to backup Sean Maguire in Thursdays game against the Cougars, which was to be the final game of Golsons collegiate career.

Golson completed 147-of-219 passes for 1,778 yards with 11 touchdowns and just three interceptions in nine games of action with seven starts for Florida State this season. Health and some spotty play down the stretch of the regular season led to Maguires emergence and the Seminoles offense, particularly the downfield passing attack, has been better ever since.

Godsons career will always be notable for his role as the starting quarterback for Notre Dame in the Irishs undefeated regular season that ended in a loss to Alabama in the 2012 BCS title game. He then missed the 2013 season due to an academic suspension, only to return to lead Notre Dame to a fast 6-0 start in 2014 before the team Golson included struggled down the stretch.

Banker: Rate hike to have little impact

The Federal Reserve, as expected, raised its key, short-term interest rate last week, but local consumers will feel little impact, according to Jarrod Yarnell, President and CEO of First National Bank of Paris.

The quarter point increase by the Fed last Wednesday was a signal the central bank has some confidence in a long recovery from what many have called the worst recession since the Great Depression. It was the first rate increase in nine years.

“The impact of this first rate hike in a long time will be minimal,” Yarnell said last week. “There are some loans, credit cards, home equity or business lines of credit that are tied to the prime rate that will feel a minimal impact.”

Yarnell added that once the Fed increased its Fed Funds rate, the prime interest rate went from 3.25 percent to 3.5 percent.

“Mortgages and other types of loans that are tied to market rates won’t necessarily go up,” Yarnell said.

Yarnell also said the Fed is signalling that more rate hikes are coming.

“The increase means the Fed thinks the economy is improving and consumers can handle it,” he said. “Rates staying low isn’t a good thing. The futures market is pointing to three or four more rate increases in 2016. The Fed is certainly signalling they want to get us back to a more normalized environment. Time will tell, but that’s their intent.”

In the latest Arvest Consumer Sentiment Survey, released the day before the Fed announcement, it was shown that Arkansas consumers increased their savings rates between March and September. The surveyors suspect it is due to lower gas prices.

The Arvest survey also states that Arkansans are expected to take on more auto loans and credit card debt in the next six months. The survey, conducted in September, focuses on consumers’ attitudes concerning spending, saving and debt.

Arkansas consumers’ household savings rate increased from 11.6 percent to 13.9 percent from March to September. While the percentage of those planning to increase their savings rate fell from 20 percent to 14 percent, the number of Arkansas consumers planning to maintain their current rate of savings went from 73 percent to 77 percent.

Arkansans’ consumer debt also remained below that of its neighbors in Missouri, including greater Kansas City, in all categories except for auto loans and student loans. Arkansas respondents reported that 35 percent had auto loans in September while Missouri respondents reported 31 percent, and 26 percent of Arkansas respondents reported outstanding student loans compared to 15 percent in Missouri.

“Like their national counterparts, Arkansans reported being able to increase savings rates from March 2015 to September 2015,” said Kathy Deck, director of the Center for Business and Data Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas.

Deck is the lead economist for the survey.

Yarnell said that the rate increase could be used by consumers as a signal to act if considering a loan.

“If you’re a consumer, it might be time to look at rates on your loans and make plans, taking expected rate hikes into consideration,” he said. “If you’re looking to buy a house and can afford it, now or the near future might be the time to consider taking advantage of rates while they’re still low.”

The Times Record of Fort Smith supplied information used in this report.

Couch: College Football Playoff is out of place on New Year’s Eve

The College Football Playoff has overstepped its bounds. Even if many of us can’t think of anything we’d rather do on New Year’s Eve.

The sport is straying from its lane and kicking dirt on Dick Clark’s grave, offering the play clock as an alternative countdown to the ball dropping in Times Square.

It’s the arrogance and thoughtlessness that irks me. The notion that college football is such a powerful drug in American culture that we’ll alter traditions and cancel plans because we can’t help ourselves.

This year, in Greater Lansing and around Michigan, the college football power brokers are probably right — we can’t help ourselves. We don’t want to. Michigan State playing Alabama in a national semifinal in primetime on New Year’s Eve is something special. Something unique.

And while it surely has caused a few logistical headaches for venues and disagreements among couples and between friends, it’s also created an opportunity for a memorable night.