Recently, I had an early morning appointment that required me to take a different route to work. This detour took me through an upscale suburb, which was a definite “step up” from the middle class suburb in which I live.

On this route, I drove down a busy 4-lane thoroughfare. While in the left lane, I checked the mirror and saw an oncoming vehicle quickly gaining on me. I put on my turn signal and changed lanes, over to the right. As soon as I settled into the right lane, I saw the vehicle go barreling by me in the left lane. It was a nice looking BMW SUV.

As it turns out, the car had no reason to be in a hurry, as the light ahead was about to turn red. As I approached the light, the nice BMW was already there. I looked over at the SUV, and saw that windows were down while music was blaring. I took a half-caring glance to see this character was that was driving the SUV.

I saw a group of teenage girls in the car.

Remember, this was a BMW SUV, and it was driven by a teenager carrying a group of other high energy, loud-singing teenagers.

It looked like they were having fun, and I thought to myself: “What high school kid WOULDN’T have fun in a BMW like that?”

Then I started thinking about their parents. My next thought was: “What parents would give their high school kids a sharp, recent year BMW SUV?”

Perhaps to their parents, a BMW is like a Yugo. But for mainstream society, that’s an aspirational vehicle. Except of course for people like me, that have no intention of buying a vehicle like that even if I could feasibly afford it!

Anyway, the point is, does a kid really need a luxury vehicle?

When I was a kid, my first car was a Honda Civic that had no power steering, no power windows, and was a no-frills vehicle. Oh, and it wasn’t really mine – my parents let me drive it. When I turned 17, they let me drive the car most every day as they bought another car for themselves. I ultimately took this same Honda to college.

What’s funny is that as I close in on 40, I’m still driving a Honda. This time, it’s an Accord. Aside from the old-fashioned steering and windows aspect of it, my first car was not much different than my current car. There isn’t exactly a big gap between a Civic and Honda in terms of prestige.

Would that bother you? It doesn’t bother me much. Maybe a bit, if I think about it, but then I remind myself that this was a cash purchase and there are no car payments. That financially responsible approach is more important to me than having a bigger brand name or fancier car!

Now, as for my daughter, I will still work toward getting her a car of her own when she’s 16 or 17. It might be my car that she gets, or it could be a reliable, safe, used one. Either way, I will play a role in making sure I make the decision of what she drives!

So, with my stories as a backdrop, I ask you:

What was your first car like? Tell us make, model, and what kind of shape it was in when you got it. Did you buy it, or were you given it by parents?

Also, what are your thoughts on kids with new drivers licenses getting a car? Do you feel they should always be expected to buy it themselves, or should parents play a role in purchasing the car?

Do you like to pay taxes? I’m not sure many of us do. Nevertheless, most of us realize that taxes are a part of life in any country with public services.

That said, complaining that taxes are too high is almost “de rigueur” in many circles. There are myriad examples of ways people demonstrate how burdened they are with taxes:  

• “I could have gone on a fabulous two week vacation if I didn’t spend so much on those taxes”
• “I worked until April 10 just to pay off my taxes”
• “Once they take out taxes, there’s not that much left!”

Admittedly, I too have had similar thoughts at different times.

However, when you take a comparative look at taxation around the globe, it becomes clear that some are taxed more than others. For those of us here in the United States, as well our Canadian neighbors, the results may be enlightening.

Here is a look at the Total Tax Revenue by country, as a percentage of Gross Domestic Product:

Source: OECD Tax Database

As can be seen, the tax revenue as a percentage of GDP is actually relatively low for the U.S. and Canada. Compare these figures with that of France and Italy, for example. It would appear that we have it better here.

Now, let’s layer in savings rates for the same set of countries:

Sources: OECD Tax Database and OECD Economic Outlook Database

The tax data was from 2007 and savings rates from 2009, close enough for a near apples-to-apples comparison. Overall, it appears that the U.S. and Canada are not only taxed on the lower end of this set of countries, but also save very little as well.

What’s the lesson from this excercise?

My take is that though we don’t want our taxes to go higher, they could be worse - and shouldn’t be preventing us from saving more than we are at this time.

 Welcome to the 69th Edition of the Carnival of Money Stories! I’m pleased to be hosting this week.

I’m calling this week’s carnival the “Summer Vacation Edition”. Rather than focus on going back to school, or autumn looming ahead of us, I thought it would be fun to reflect on the summer. This summer, many of us have been fortunate enough to get away for a break, even if short. Whatever your vacation, whether no-frills or grand, let’s think about the fun that was had. If you haven’t taken a vacation, think of where you would like to go next. As can be seen from my most recent blog post, this is a topic that’s been on my mind:)

For me, my very short getaway this summer was to Canada, with one day being spent visiting Niagara Falls. I was last there in my youth, so it brought back some great family memories.  Those falls are still impressive, no matter how many times I have seen them.

How about you? Did you take a vacation this summer?

Let’s get to the articles!

EDITOR’S PICKS

Christian Personal Finance presents How I Run My Home Based Business

Donna Freedman  presents Online News Won’t Save The Planet

Jeff Rose presents 7 Financial Tips for Your Kids Starting College

Wealth Pilgrim presents Lost or Stolen Wallet? What to do Now

OTHER FINE ARTICLES

Passive Family Income presents Save Money by Reviewing Your Credit Card Statements

Richly Reasonable presents Online Grocery Shopping – Worth It?

Money Obedience presents Save Money At Any Income Level

Free From Broke presents Final Piece of 2009 Credit CARD Act Starts and How it Affects You

My Wealth Builder presents A Simple Way to Build Wealth

The Digerati Life presents How to Remove Spyware, Malware, or any Computer Virus

PT Money presents Is Lasik Surgery Worth It? My Story

Ask Mr. Credit Card presents I Have Been Traveling

Bucksome Boomer presents Should You Eat Your Eggs?

Studenomics presents Getting College Credit….and Paying it off Within 30 Days

Sweating the Big Stuff presents How to Avoid Paying Your Credit Card Bill

Nerd Wallet presents Calm Down, the Poor are not Paying for the Rewards of the Rich

DINKS Finance presents How Groupon Has Made Me a Believer

Budgets are Sexy presents The Splurging of Gift Cards

Simple Debt Free Finance presents Heads Up – Your Credit Score May Suffer Even If You Pay Off Your Card Every Month!

Go Banking Rates presents Top 3 Reasons Why Housing Won’t Recover

Money Thinking presents Introduction to being broke

Roth IRA Rules by RothIRA.com presents Comparing Retirement Accounts: Minimum Required Distributions

FMF presents Update on our Shopping List

Debt Management presents Time Orientation and Personal Finance

Mrs. Nepsy’s Frugal World presents Another Reason to Kill my Credit Card

Get Rich Slowly presents 16 Ways to Eat Healthy While Keeping it Cheap

One Family’s Blog presents Flipping a House during the Bubble Period in the Bay Area – An Experience

 Thank you to everyone who submitted an article for consideration. Next week’s carnival will be at Eventual Millionaire  

As I’m sure many you have heard, Jet Blue recently offered a travel package that created quite a buzz. For $499, people were allowed unlimited travel throughout their network of destinations, from from September 7, 2010, to October 6, 2010. The biggest restriction was no travel on Fridays or Sundays. This could be removed by going with the $699 deal.

I didn’t go for it, due to time commitments, but it was a pretty intriguing offer. If one has a large block of time available during that time frame, it can be a great opportunity to be a jet setter and explorer all in one month. Seems like a good time to me!

That got me thinking about how fun it would be to get away and just chill out. Even though it’s not possible right now for me due to time commitments, I feel like getting inspired by the possibilities.  Along those lines, I thought about this totally hypothetical situation:

Let’s pretend for a moment that someone offered you a chance to travel to one location for R&R, just to relax and recharge. The parameters of this daydream scenario would be as follows:

• One free round trip to anywhere within your country of residence; if U.S., it must be within the lower 48 states
• You would have up to 10 days to vacation
• You must stay within the state of your arrival/departure
• You got a reasonable daily stipend for lodging, food, auto rental – say, $200 per day.

For me, the place to chill would be Coastal Oregon. I would fly into Portland, then drive to the coast for some R&R.  Cities such as Cannon Beach and Yachats would be on my list of places to stay.

Why Coastal Oregon, of all places? I have been there previously, and found it to be a very relaxing place to visit. You get the beautiful, majestic scenery of the Pacific coastline, with the surf hitting beaches (and occasionally rocks and seastacks) that are juxtaposed against lush, green hills and mountains. There are some quaint towns along the way that are welcoming to tourists, yet relatively unpretentious. Good food, good times. I liken to a northern version of California’s famed Highway 1. It’s a little cooler, and there’s a bit more rain, but if you pick the right time to go and the weather cooperates, it’s a hidden gem. I’ve been to 47 out of 50 states,  and think this is a very underrated area for recharging one’s batteries. I highly recommend checking it out.

OK, enough about me. How about you? In this totally hypothetical, fun scenario, where would you go choose to fly? What state/province would you visit, and to what locations would you go?

I have always believed that one doesn’t need to spend large sums of money to have fun with the family. Sure, there are some things that inevitably - for the most part – require a decent cash outlay. Ranging from vacations to amusement parks, all the way down to movies at the theatre, there are many fun activities that fit this description.

Recently, I have been able to capture my 7-year old’s  attention with an old standby card game: Go Fish!

Now, to clarify, it’s really she that has captured my attention with this game. Lately, she has been asking me to play this game again, after the card deck was in a drawer for the last year. Honestly, even though it’s a kid-oriented game, I really have fun playing with her. It’s fun to see your child having a good time, using her mind “strategically” in some way, and playing to win while being a really good sport.  It’s all good, and seems like wholesome, family fun.

Besides the fun both parent and child are having, here’s the next best thing: the deck of cards cost us next to nothing!

They weren’t entirely free, but were part of a kids meal that we got her when traveling a few years ago. I think the meal cost no more than $5, and included this small deck of cards as the kid “toy”.  Instead of some action figure, as would be typical, this one was something where they could actually think a little bit, and interact with an older sibling or parent.

Anyway, we probably played about 5 hours worth of Go Fish!, I’m estimating, when she got the cards a few years ago. Since she recently rediscovered the game, we have probably played another 5 hours total, I would estimate.

Overall, 10 hours of enjoyment for spending very little is a great deal, I think! Technically, I can’t say it was “free”, as our $5 or so was inclusive of the food AND the game. That said, it’s good fun for very little cost.

She has seen a “real” card deck, and got a kick out of the pictures of the King, Queen, Jack, and Joker. I guess the numbers weren’t as exciting as pictures, which is why Go Fish! must be fun:)

If you have kids, are there fun activities you have them do that keep them entertained at very little cost? If you don’t have kids, perhaps you might remember some fun things from your childhood that probably didn’t cost your parents much.

Saving money is obviously an important action to be taken to maintain strong financial health. It’s something that too many people don’t do, despite being widely encouraged to do so. On the other side of the coin, there are some people who actively save. Within that group, there are some that are passionate about saving.

I’m in that latter camp.  As I’ve gotten older I’ve taken a closer look at my finances and projected where I am compared to I would like to be long-term.  The results of this analysis have pointed me in the direction of increasing my savings rate. Of course, one can only save so much; if you grow income concurrently, your savings increases further.

Clearly, there’s something motivating me, might you agree? This “long-term” notion I mentioned at the beginning of the prior paragraph naturally points to a future a need for money.

Ok – so that’s nothing different than saving from retirement, right?

Perhaps.  But it goes further than that.

While some savers are motivated to squirrel away money for specific items (house, for example), paying off debt, or for a retirement filled with world travels – I’m primarily motivated by one thing: not being old and broke.

Sure, I have other “aspirational” motivations, such as a glorious retirement filled with traveling around the world, living in a very nice home, spending lots of time with grandchildren, generously giving to those in need, etc. Actually, I what I would really like is financial freedom as soon as possible.

Let’s get that party started quickly!

But really, it’s that avoidance of being old and broke that’s at the foundation of my interest in saving. I had always had that in some far corner in the back of my mind, but my recent increase in time spent downtown here in Chicago – as opposed to the suburbs – has increased my daily exposure to people begging for money.

Now, the area around Michigan Avenue is a fantastic area with VERY expensive real estate, particularly for here in the Midwest. Additionally, it has what in my opinion is the highest concentration of fine shopping, dining, and hotels in between the East and West coasts.  That said, this perceived prosperity draws a few beggars at times.

I really don’t like to see this, and it’s not because I’m annoyed at them for being lazy. Well, it might be for some of them, particularly those in their 20’s and 30’s.  But mostly, I just don’t like to see people in a position where they have nothing – no money, no home. Call me a softie, that’s fine.

What really gets to me, however, are the older people who I have seen.  While being on the street probably ages people, a few of the people I saw clearly looked to be 65+. The first such person I saw was a woman, the second one an even older man.

That could be someone’s Mom or Dad out there!

Now, who knows what happened in their life to get them to that point. Maybe they did some bad things? Or, maybe they had just one or two bad financial decisions or life events and they were out on the street? Tough to say.

I give a few dollars to people such as this. Hopefully an exceptionally generous person will step up and do more.

Anyway, once I acknowledge that I feel bad for them, I start to think “I don’t want to be them.  Ever.”

In the hierarchy of financial motivators, that’s at the top of the list for me. Or maybe a better way to think about is that it’s at the foundation of my personal finance hierarchy of needs.

What motivates you to save money? Not superficially, but at your core.  Why do you, deep down, feel the need to save?

Hello Everyone! Thanks for being a part of Squirrelers, and contributing to the growing readership. I appreciate your continued interest as we grow, whether you’re commenting or reading.

Along those lines, if you have any feedback or comments on things you particularly like, would like to see more of, or would like changed, please feel fee to reach out to me via the contact form. Also, I warmly welcome guest posts here, so please feel free to get in touch if you would like to contribute in that way!

With that said, I have a few acknowledgments and weekly favorites to share with you:

Yakezie Launch

For those of you who aren’t aware, this week marked the launch of Yakezie.com, a website which will ultimately contain contributions by a large network of over 100 personal finance bloggers (including yours truly). The site is in its infancy now, but I am looking forward to the development of it. Great work by Financial Samurai and Chris Johnson to get this launched!

Squirrelers in Carnivals and Roundups

This week, Squirrelers was included in the following carnivals and roundups:

• Making $400,000 Yet Living With Mom and Dad was included in the Carnival of Personal Finance at Live Real, Now
• A Great, Refreshing Bargain in Our Midst was included in the Festival of Frugality at Simply Forties
• How Much Money Would it Take for You to Relocate? was included in the Carnival of Financial Planning at My Traders Journal
• Wheeling and Dealing for Healthcare was included in the “100 Lessons You can Learn From Frugal People” at College Crunch

Favorites from the Personal Finance Blogosphere

Below are a variety of articles that caught my eye this week. If you have some time, give them a read!

• Home Based Business Insurance – What Coverage Do You Need, at Wealth Pilgrim
• What Happens When Your Bank is Seized by the FDIC?, at Good Financial Cents
• Frugal Parents: What to Buy for a New Baby, at Money Funk
• Retiring in Luxury Overseas for Cheap – Bargain or Bogus?, at Free by 50
• How to Own Your Own Restaurant, Pack it in a Shipping Container, and Take it With You, at Invest it Wisely
• The Economics of Time, at The Wealth Artisan
• A Simple Trick to Get Your Credit Card Interest Charges Waived, at Len Penzo

Have a great weekend!

Many of us are always looking for ways to save money, be it in our day-to-day expenses, or larger purchases such buying a car. Often times, we look to getting the best deal we can get upfront, perhaps through bargaining or paying in cash.

For certain expenses, however, we need to look beyond just the initial purchase costs to save money. We often need to dig deeper to find the true savings opportunity that’s available.

A good example of this would be the tax credits that are available for energy efficient home improvements.

According to the Energy Star website, there are tax credits available for purchases of specific energy efficient and renewable energy products for the home. The savings are noteworthy, as they have seemingly generous limits, and some cases there are no limits.

Here is an summary of the tax credits that were noted:

Group 1

Items Covered:

•  Windows and Doors
  • Sliding glass doors
  • Garage doors
  • Storm doors
  • Storm windows
• Insulation
• Roofs
  • Metal
  • Asphalt
• HVAC
  • Central Air Conditioners
  • Air Source Heat Pumps
  • Furnaces and Boilers
• Water Heaters
  • Gas
  • Oil
  • Propane
  • Electric Heat Pump
• Biomass Stoves

Tax Credit and Restrictions

• Up to $1,500 maximum, at 30% of cost
• Existing homes, not new construction
• Must be primary residence
• 2010

Group 2

Items Covered:

• Geothermal Panels
• Solar Panels
• Solar Water Heaters
• Small Wind Energy Systems

Tax Credit and Restrictions:

• 30% of cost, with no upper limit
• Existing homes and new construction
• Does not have to be primary residence, vacation homes are eligible
• Through 2016

Group 3

Items Covered:

• Fuel Cells

Tax Credit and Restrictions:

• 30% of cost, up to $500 per .5 kW of power capacity
• For existing principal residence or new construction that will be principal residence, excluding vacation homes
• Through 2016

As can be seen, there are plenty of details and restrictions. Therefore,  I would suggest talking to a tax professional for further information before taking action on these opportunities.

That said, if you have some work to do on your home, or know anyone that does, it’s worth taking a closer look at this. Energy efficient practices are good for our planet, and could save you some money too. That’s a good combination, don’t you think?

Today marks a one month anniversary for me. A small anniversary, to be sure, but one that has taken some effort on my part to accomplish.

It’s been one month since I last consumed a caffeinated beverage.

OK, so like I said, this is a small anniversary. Perhaps you’re not much of a consumer of coffee, tea, or soft drinks. Or, perhaps you’re highly disciplined when it comes to food and drink, and wouldn’t have any issues with your eating and drinking habits. If so, that’s great! That’s a good place to be.

For me, this is a nice step in that direction.

If you’re like me, you might be someone who has your caffeine during the day at one time or another. Maybe it’s the morning cup of coffee. Or the cola at lunch. Perhaps it’s both. Maybe it’s at multiple times during the day.

There are many people that are hooked on caffeine, whether they realize it or want to admit it.

I have been advocating drinking water instead of less healthy alternatives, and had pushed myself to get to that point for the most part. However, my lifelong taste for Diet Coke emerged in a big way in recent months, with an extremely busy schedule at home and work.  I previously would have one occasionally,  but I slowly escalated my consumption until I was having at least 2 or 3 per day. This was reminiscent of my habits about 10 years ago. Additionally, if I came across free coffee anywhere (bank, office, etc), I would be sure to have it. That might be a few times a week too.

The result was that I just didn’t feel right, and decided that I needed to take steps to get more disciplined with my the food and drinks that I put in my body. So, eliminating caffeine seemed to be a good first step.

The first few days were rough, as I started to get headaches and felt nauseated. It felt as though I had some type of bad flu virus, for those initial days. Interestingly, when it was that bad during that initial time, I ran to a quick-serve place and picked up a fountain drink. After a short while, I felt good. While it was nice to feel better, it made me realize the hidden power of caffeine.

From that point, I resumed staying off caffeine, and I haven’t had any since. It’s been a month now.

No Diet Cokes, no coffee, no caffeinated tea.

Mostly lots of water every day.

There have been a few days where I had juice, and one day when I had two glasses of beer. That’s it.

The result: I actually feel better! Here are four benefits I have noticed:

1. Falling Asleep Easier. Caffeine isn’t preventing me from sleeping.
2. Getting Better Sleep. Once I fall asleep, I stay asleep more often
3. Less Ups and Downs in Energy. There are no bursts of energy followed by mini-crashes and lethargy; rather, I’m consistently at a good enough level of alertness throughout the day
4. Improved Concentration. It seems like it’s a bit easier to maintain focus for extended periods of time

In terms of the pocketbook, I’m clearly saving some money by having water instead of soft drinks, as I frequently suggest. But the bigger thing is that I’m able to maintain energy throughout the day – which I hadn’t been able to do as well before. This, I believe, can only make one a more productive, energetic, and innovative worker. It may not be directly quantifiable, but I think there’s at least a potential financial benefit that could be attributed to those factors.

Will I keep up this strict regimen? Probably not to this extent, but I hope to reestablish a long-term pattern of limited caffeine, with sodas being only an occasional indulgence once every few weeks. If I have a caffinated drink, maybe green tea would be a good option. We’ll see. 

Regardless, this one month exercise gave me a direct example of how good dietary habits can impact one’s energy, health, and even the ability to earn and save money.

Those of us who are personal finance bloggers or blog readers know that it doesn’t necessarily take remarkable luck and good fortune for someone to eventually become a millionaire. Sure, those things are a tremendous help, there is no question about that. However, an individual or family with a more modest level of income and not coming from wealth still has a chance to get there, provided they start saving early enough.

Yahoo! Finance had an article on 7 common millionaire myths that are commonly held. Below are those myths, with my comments:

1) Millionaires Don’t Pay Their Taxes.

As the article states, they already do, and this is not likely to change in the near term. While we all want to be millionaires, there’s no need to hate on those who are, just because they’re millionaires!

2) Millionaires Just Inherited Their Money

Some sure have, but the viewpoint that all have inherited big money is simply not true. Many of them have worked hard for their money. I think that this myth is one that’s perpetuated in order to make people feel better about their own situations. Believe me, I’m no millionaire but I’m not going to stick my head in the sand and think that all millionaires just had the money handed to them. Some did, but not all. Sometimes that’s evident.

3) Millionaires Feel Rich

I’m not a millionaire, so I can’t tell you exactly how they feel. It would be nice to find out from personal experience someday! That said, from what I have seen, I suspect it’s the drive to cover life’s necessary expenses, and a bit of ”paranoia” about being broke, that has driven people to get to the point of being wealthy.  

4) Millionaires All Have High-Paying Jobs

No, they don’t. Some people are able to live within their means, maximize the savings minus expense gap,invest properly, and avoid big financial and life mistakes. With a mixture of discipline (and in some cases a little luck), there have been innumerable middle-class people who have accumulated wealth.

5) Millionaires All Drive Fancy Cars

Many people became millionaires by living within their means, and being able to discern wants and needs. If I had a million dollars handed to me today, I still wouldn’t buy a new, upscale branded car. Rather, I would buy a reliable used car.

6) Millionaires Hang Around the Golf Course All Day

If they did this, they had better be worth well more than a million dollars! Otherwise, their millionaire status would be gone in a hurry. This myth is a bit strange.

7) Millionaires are Elitists

Some may be, and I’m sure many are out there. I have also seen a few that are outwardly just like the average person, but behind the scenes when you get to know them their hidden snobbery comes out. Also, I have seen a few that are not elitists and frankly, don’t want to spend any money at all if they could help it. I think it’s tough to generalize about the attitudes of millionaires.

What do you think of this list?

I think there is much wisdom to be gained from those that are. In order to obtain that wisdom, I believe one must cut out biases, perceptions, and jealousies, and focus instead on embracing reality.

I also think that some people who want to be wealthy try to act like they’re already there. You know, driving a car that’s really a step or two above what they should be driving, buying a home that’ s not a good fit based on their income and savings, or purchasing designer clothes despite not saving much money.

A buddy of mine who is in his mid-30’s and dating shared with me a story about a woman he went out with who told him about her vacation preferences. She said that when traveling, she preferred to stay in 5-star resorts and get pampered as that was her standard. She just wouldn’t stay in someplace lesser. His take was that this was a huge red flag, and the relationship never got started. Clearly, to him, she was someone with very high tastes that was living well beyond her means. He’s not stingy at all, by the way. He’s a good guy that would be generous to anyone he is with (in case you’re reading, my friend!).

Anyway, I think that outside of those who inherited or got extremely lucky in some way, many people who are millionaires got there because of hard work, living within their means, saving a significant percentage of their income, and being financially responsible. Furthermore, these aren’t necessarily extraordinary income earners, either.

What do you think? Do you agree that these are generally myths? Do you have any examples from your own life to prove or disprove these assertions?