Spending with cash is smart – you always know how much you have. But sooner or later, we all peer into the abyss of an empty wallet and ask: “Where did that $100 go?” Continued

Four out of five personal finance pundits say a budget is the only way to trim spending and save cash. Unfortunately, four out of five “real” people might disagree.

Let’s be honest, do budgets work? Continued

I am always interested in how others manage their personal cash flow, so I’ve decided to share how I do it. Ultimately, which accounts your money flows through matters less than where it flows to, but recently I’ve found utilizing multiple bank accounts actually makes keeping to a budget easier. Continued

If you have decided to start a personal budget or want to follow your budget more faithfully, perhaps you’re considering software to help get the job done. Mvelopes Personal, by software developer In2M, is one of three major choices for personal finance software along with Intuit’s Quicken and Microsoft Money. As described in this review, however, Mvelopes is substantially different than its competition. Continued

How many times have you written out a monthly budget that would make your bank proud, only to completely forget about it one week later as you charge the day’s third coffee to your Visa card? Continued

Wondering what ING Direct’s Electric Orange Debit MasterCard looks like? I just got mine in the mail, here’s a glimpse! Continued

Your car. You love it when it takes you to work or through winding mountains on a weekend escape. When it comes time for oil changes and tune-ups, however, your car stereo plays a different tune.

For many even minor car repairs can put a dent in your wallet, let alone the inevitable but unpredictable major system failures. When you bust a radiator, fuel pump, alternator, clutch or AC compressor, it will be the mechanic – not your car – taking you for a ride.

While you might not be able to avoid repair shop sticker shock, you can prepare for the expense. Budget properly and even astronomical repair tabs can seem like any other bill.

The first step to budgeting for auto maintenance is to change how you think about car maintenance. A few years ago it seemed like I was scraping the bottom of my bank accounts every time my vehicle needed work done. Finding the money for even small repairs was stressful because I hadn’t planned for the expense.

But guess what? I knew my car would need maintenance, and since it was an older car, I also should’ve known it would break down sooner or later! So I should have had money on hand to cover the car repairs. But how?

Insure Yourself

Insurance companies know people are going to crash their cars, get sick, and even die. Well, especially die. We all do. Yet the industry is still wildly profitable. That’s because insurance companies collect money before it is needed to cover an emergency expense and invest it. That’s why the longer you live, stay healthy, or drive without an accident, the more the insurance company can make off your invested premiums.

Why not insure yourself against breaking down? The idea is simple. Pay yourself a monthly auto maintenance premium based upon what you anticipate you might spend on car repairs in the next five years and invest it in a high yield savings account like ING.

Then, if you have a car repair, you’ll have money on hand to pay the bill without using credit cards. You’ll also have money to rent a car so you’re not stuck without a ride to work. If you haven’t had time to save enough to cover the entire repair bill, you’ll have to pay a bit out of your pocket, but that’s no different than an insurance deductible.

The best part is, your money will have earned interest all along!

No matter how old or new your car is, I strongly recommend creating a separate account just for auto maintenance. You can save a monthly amount in this account based upon your anticipated car expenses.

Use our free annual auto maintenance budget calculator now to see how much you should put aside each month for car repairs.

Keep On Fixin’ or Buy New?

When repairs keep on coming, why not just buy a new car? It’s certainly an option, but not always the most economical. The longer you can keep your vehicle on the road, the less money you’ll waste on depreciation, dealer and registration fees, and financing.

If you’re looking at an annual repair budget of over $2,000, however, the odds are you won’t be saving money by driving your old beater much longer.

If you do decide to get a new ride, know how to beat car dealers at their own game and get a few recommendations for safe and affordably fun cars.

Could you buy nothing for an entire year? Each year AdBusters promotes Buy Nothing Day on the day after Thanksgiving to raise awareness about wasteful consumer habits. But what about a Buy Nothing Year? That’s exactly what this group has pledged to do in 2007.

Before dismissing a buy nothing year as insane and unacheviable, consider the fact that the premise does not proclude buying the things you need for survival such as food, and actually allows to buy used or barter for anything you may desire. A secondary goal of buy nothing year is to encourage you to support local farmers and merchants in buying the foodstuffs you do need.

If you have ever participated in a buy nothing day or have ever pinched pennies for a few days, you probably already know how much we can do without when we put our minds to it. Candy and gum, fast-food lunches, useless trinkets, and excessive clothing all satisfy our desires, not our needs. And today, even larger items including computers, appliances, and cars are disposable. Wasteful packaging aside, most of what Americans buy will become trash within 10 years.

According to 2002 U.S. Environmental Protection Agency (EPA) data, the average American generates about 4.4 pounds of trash each day. That’s 1,606 pounds a year and, assuming a lifespan of 80 years, more than 64 tons in a lifetime, or the equivalent weight of some railway locomotives!

The staggering environmental impact of 300 million Americans treating their county as a landfill aside, all this buying detracts from our relationships and our health. It draws lines between privilege and poverty, inspires lust, and leads to debt. It’s why we work longer hours and get fatter than any other nation on the planet.

Not to mention, this being a personal finance website, the high cost of buying unnecessary and disposable products day in and day out.

What can you do? Can you go a year only buying local groceries and other items you need used? How much money might it save you?

What about a month? One week? Starting today, I am going to see how far I can go. I’ll let you know.

Because a buy nothing year is such an ambitious goal, anybody attempting it should be commended. Also, I would think it’s fair to be able to set your own rules. For me, I’m going to try to buy nothing from commercial sources except groceries (buy local when possible), medications and toiletries, and raw materials for art, household, or building projects. Everything else, I will buy used. I’ll let you know how it goes.

Late in 2006, ING announced to its ING Direct Savings customers the Electronic Orange checking account. It takes free checking a step further and actually pays at least 3% interest on your balance, however small.

True, Electronic Orange is a paperless checking account, meaning you can’t get physical checks in the mail. But I don’t know about you, but for me that is becoming less and less of a problem. With online bill paying, the only check I write each month is for my rent, and I’m willing to bet if I really wanted to I could convince my landlord to let me pay him electronically.

And those archaic checks aside, ING offers everything else you would expect from a checking account, most importantly free ATM access and a MasterCard debit card. They also provide bill paying and electronic check writing services for free.

If you’re a big spender, the interest rates are just as good or better than most high yield savings accounts (5.30% APY on every dollar for balances of $100,000 or more and 5.05% APY on balances between $50,000 and $100,000). For everybody else, it’s 3.0%. Still, that’s a heck of a lot better than what I currently earn on my checking account…Zilch!

As of right now, you first need to be an ING Direct savings customer to sign up. But if you haven’t done so already, there’s no reason not to grab an ING Direct Account an earn an instant 10% return on your money. (You get a $25 bonus when you open an account of $250 or more). So open an ING Direct account now and then sign up for their high yield checking account to start earning returns on your checking balance!

Maybe you just got your first credit card, or are retraining yourself to use credit responsibly after beating down some myself included, love to focus on credit card abuse and the difficulties it can cause.

But credit cards are also a powerful tool that can make managing your money easier.

Before you can use a credit card responsibly, you should understand how credit cards work. In short, the credit card is a tool you can use to receive a loan from the card’s issuing bank every time you make a purchase. The bank is happy to make this loan to you because it expects to collect interest. In fact, banks like credit cards because they can charge a much higher interest rate than they could on a secured loan.

However, the responsible credit card user typically has an advantage over the credit card bank called a grace period. Typically between 20 and 30 days, the grace period is the time period between when you make a purchase and when you pay your credit card company for that period in which no interest is charged.

Grace periods are powerful because they give you the opportunity to use your credit card as an ultra-short but interest-free loan. Instead of taking advantage of this benefit, however, many consumers do not pay their credit card balance in full each month, turning their credit card into a revolving credit line. Finance charges (interest) then accumulate on the unpaid credit card balance each month. If you’re in this situation, set a debt-free plan or look into 0% balance tranfser offers.

To use your credit card responsibly, you must resolve to pay your balance in full each month. That means keeping track of how much you’re spending on your credit card each month, and ensuring you will have enough cash the following month to cover your purchases.

I find that using one credit card for nearly all of my monthly purchases not only makes this fairly easy, but has made it easier to manage my money, keep my checking account balanced, and track my spending.

If you have learned how to create a spending plan and have written a budget, you know how much money you typically spend each month after your fixed costs like housing and car or other debt payments.

Let’s say your monthly spending allocation is $1,000. Now assume you’ll need $100 in cash for various transactions where using a credit card isn’t feasible. You know that you have $900 to spend for the month and can easily track how much you left to spend by checking your credit card balance, which most cards allow you to do easily and for free online.

At the end of your credit card billing cycle, simply pay the balance and start again.

Why bother? With the ease of using debit cards these days, why add a credit card to the mix if you’re not planning on paying over time? There are several reasons.

Rewards – Most credit cards offer some kind of rewards program, giving you back about 1% of every dollar spend in the form of cash, gift certificates, or travel. Many cards provide these rewards without an annual fee. So if you can avoid paying interest on your credit card purchases completely, your credit card is actually paying you!

Security – With growing concern over the ease of credit and debt card theft and fraudulent charges, having your credit card lost or stolen is a simpler fix than if the same happens to your debit card. In both cases you won’t have to pay for fraudulent charges, the difference is if a thief snags your credit card no money actually leaves your bank account.

Building Credit – Every month you pay your credit card bill on time, you’re building your credit history and improving your credit score, which will save you money in interest rates on every big purchase you make down the road, from your next ride to your first house. If you never use a credit card you could find yourself in your thirties and unable to buy a home!

Simplicity – Using a credit card for your monthly purchases eliminates the need to balance your checkbook more than once a month. As long as you track your credit card spending (and don’t touch your checking account), your checking balance will always be where it should be.

Now that you have the basics of using credit cards responsibly, choose a credit card that’s right for you. Chase offers a number of cards with good terms and a variety of no-annual fee rewards programs to choose from:

For Bookworms

Borders 3.2.1^SM Visa®
Chase Amazon.com Platinum Visa® Card

For Coffee Drinkers

Starbucks Card Duetto™ Visa®

For Globetrotters

Continental Airlines® World MasterCard® from Chase
British Airways Visa® Signature Card
United Mileage Plus® Signature Visa® Card

For Students

Chase Student Flexible
Rewards Card

For the “Just give me the cash” Types

Chase Free Cash Rewards^SM Visa® Card