Moneywise24 Personal Finance

Over the last few years we have seen the price of oil go up, and further up, and even more. With an increasing demand for oil in emerging markets such as China and India, combined with limited capacities, this trend is likely to continue. We feel this in our wallets, as the price for petrol is being driven further upwards. It encourages us to take action where ever we can. Since hybrid cars are still relatively expensive, here are four options you may want to consider in order to reduce costs on petrol.

Pick the right vehicle

If you have the option to buy a new vehicle, you can do so by looking closely at the fuel consumption. Strong engines usually consume a lot of fuel. Ask yourself what you need the car for? Do you really need a strong engine, or a large and heavy car, which is likely to consume more. Many people tend to pick their vehicle according to what they like, or what they think they need. Professional car salesmen are not a great help either, since their job is to favor the sale of more expensive, and larger vehicles.

In addition to the engine size, many modern cars have technologies in place which help to reduce fuel consumption. Before running off and buying a new vehicle, do some research on the internet, and ask yourself “what do I really need?”.

Drive to save money

Different people have different driving styles. Still, your driving style may result in too much fuel consumption. Too fast acceleration, opening the window at high speed, or the usual stop-and-go in the city are typical driving behaviors that consume fuel.

Try to accelerate smoothly, and look way in advance what is happening on the street. If there is a red light coming ahead, there is no need to keep accelerating, just in order to come at a full stop. Try to keep the car moving as much as you can. Additionally, get rid of any extra weight in the trunk, and ensure that the tires have the right pressure.

Walk, take the bike, or use public transportation

If you have the option, leave the car and either walk, take the bicycle, or use public transportation, especially in urban areas. This not only saves fuel, but it will also save you on mileage, so the car will not depreciate as fast. Additionally, walking or taking the bicycle is healthy.

Carsharing

Perhaps you have the possibility to share a car with a friend, or neighbor. Carsharing means you share one car, and divide the costs for petrol between all people in the car. For example, you might use your own car and offer other people a ride, and the next day someone else offers his/her car.

The list of possibilities may go on even further. However, these four examples are a demonstration of how you can actively reduce your costs for fuel and petrol. Should you have any other suggestions, just write a comment on this post.

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I know this topic might be a bit controversial, some people welcome it, others don’t. The keyword is ancillary fees within the airline industry. Basically, ancillary fees are any additional fee paid on top of the ‘naked’ price for a flight. This means, that any additional service apart from the mere transportation from A to B is being charged separately, be it a blanket during a 12-hour flight, meals, beverages, newspapers, earplugs to hear music, internet access, or even a place near the pathway, or at the emergency exit.

Ancillary fees are already for a great part common practice in the U.S. and with low cost carriers in general. You may book a Ryanair flight for $5, but end up paying $130 if you add extra charges for luggage, taxes, and food and beverages. Still, many airlines around the globe have not yet adopted ancillery fees and offer an all-inclusive package, but are discussing the topic heavily.

The introduction of ancillary fees is controversial, depending on what someone is looking for on his or her flight. On the one side, ancillary fees simply means not having to pay for a service which is not being needed. But then again, can we determine what is needed and what is not beforehand?

Another concern is how ancillary fees will shape the fee landscape. Many people claim, that for them flying will become less expense, since they can save on services not required. But the big question is, will the overall price really drop that much? If I would book a flight and pay for all available services on top, would I pay just as much as an all-inclusive flight?

As with real estate, or land plots, there is a lot of money to be made by splitting up property and selling smaller packages. For example, a plot of land, which costed $500,000 might be split up into 4 equal parts and be sold for $180,000 each; that’s a total of $720,000. Similar strategies are conducted in supermarkets, or by marketing agencies, by selling products in smaller packages at a smaller price, where the reduction of pricing is far less than the reduction of product quantity.

Ancillary fees is a hot topic, and I will surely follow this with great interest. Let’s see where we are at in 5 years from now.

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• The Bicycle As A Transportation Alternative

Being from The Netherlands originally, I have grown up with my bicycle. In The Netherlands, on average there is one bicycle per inhabitant, and there are more bicycles than cars. Yet I have managed to lose touch of using the bicycle as a main form of transportation when I went abroad; especially here in Germany, where people are pretty car-crazy.

Still I enjoy using the bicycle, and there are actually 3 main reasons, which I want to suggest here, why it could be a good idea to use the bicycle as an alternative form of transportation, at least partially.

It’s cheap

Let’s face it. Since this is a money-related blog, the first benefit of using a bicycle is that it’s cheap. Bicycles come for a few hundred Dollars already, and for a bit more you’ll be able to purchase a bicycle of good quality; it really does not have to cost more than 1,000 Dollars or Euros. The maintenance costs are also low: I had my bicycle maintained before last winter for around 60 Euros. I do this every year, so that I know everything is in good order, nothing is broken, and that I can fully enjoy riding it. I find nothing more irritating than having to deal with something that is half broken.

Perhaps the most important cost-savings factor is the money saved on fuel, road tax, and insurance.

If you have a bicycle of good quality, with a bit of precaution you would be able to ride for 10 years perhaps. I have mine for 12 years now… but it does need replacement.

It’s healthy

Getting some exercise is healthy. I feel we spend too much time behind our laptops, getting too little exercise. Even if it’s for 5 minutes per day, still it’s 5 minutes. I use the bicycle during summer to get to work, as an alternative to the metro. That makes 30 kilometers (or 18.7 Miles) per day. It took around one month until I was starting to get some very powerfull results. At winter, when I am not using the bicycle, I exercise one additional day per week at the gym, in order not to lose the beautiful results of summer.

You always get a parking space

The last benefit to using a bicycle is that you’ll always get a parking space. No more driving around blocks for hours, waiting for a parking space to become free, paying loads of money on fuel, or paying enormous amounts on parking fees (in the Amsterdam city center, you pay an average of 5 Euros per hour for a parking space on the street… if you are able to find some). You can virtually just hop on, go where you want to go, and leave your bicycle right in front of where you want to be.

All in all, I find cycling an excellent way to stay fit, healthy, and save some money in the process. Surely I won’t go through this trouble when I have to carry things around with me. But when I know that I am traveling lightweight, and I don’t need to go very far, and the weather permits it, the bicycle is my way to go.

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