Even in tough economic times, the price of fuel has hovered above $3 per gallon. And should the economy rebound, those prices could skyrocket. You’ll wish you had found a fuel efficient car sooner than later.

Automakers are stepping up their game. Back in August, I was excited to see the Obama administration and automakers agree to set a fleet-wide fuel efficiency average standard of 54.5 mpg by 2025. We have a long way to go to get there, but you can already see signs of progress. As evidence, there are three new 2012 model year vehicles to make this year’s list.

There are some big differences versus last year’s list of the most fuel efficient cars. First, I decided to included the top fuel sippers, regardless of their price. In the past, I focused only on cars that retailed under $30,000. I also ranked by combined mpg instead of highway mpg. Power (fuel) source is now also listed.

Not all of these cars will be economical, despite their fuel efficiency, as some are luxury and targeted to the “guilty-rich”. Only 2 made my cheapest new cars of 2012 list – the Scion IQ and Smart FourTwo. They, and a few others could end up saving you $500-$1,000 per year at today’s fuel prices vs. similar vehicles. Over the life of a car, that can really add up.

Electric Car Tax Credits

There is presently a federal electric car tax credit available to Energy Star approved electric vehicles. It is worth noting because it is a whopping $7,500. Some states match all or a portion of that credit. It can take a pricey electric down to a competitive price level, and when you look at the fuel cost savings, it could result in a very frugal purchase. Three electrics made this list. The tax credit phases out for an automaker when they have produced their 200,000th electric vehicle.

What Cars were Excluded from the List?

For this list, I decided to focus on cars that have been or will be mass-produced for the 2012 model year.

Sadly, I had to drop the electric Azure Dynamics Transit Connect from the list, despite it achieving 62 city and hwy effective mpg’s, because I could not find the price publicly anywhere. It is a van that is built for stop & go, on-the-road businesses. This led me to believe that it is too low-volume in production and not a vehicle for the masses – even though a van that got 62 effective mpg’s would be awesome.

I also had to drop the Tesla Roadster and Tesla Model S because they did not have EPA tested effective mpg’s for the 2012 year as of yet (even though they surely would have made the list).

Obscure electric start-up or other limited run alternative energy models also did not make the list.

Where did these Fuel Efficiency Metrics Come from?

EPA combined, city, and highway mpg metrics, as well as annual fuel costs were grabbed from the U.S. Department of Energy’s fueleconomy.gov site.

With electrics, there are obviously no “gallons” to speak of.  The effective mpg’s are calculated by calculating that car’s required energy output to drive a mile and an electricity price of $0.12 kWh.

Annual fuel costs are based on 45% highway, 55% city driving, 15,000 annual miles and a fuel price of $ 3.30 per gallon for gas, $3.78 for diesel, and $0.12 kWh for electrics. If your driving profile is different, you can modify that on the site for each vehicle to find your specific annual fuel costs.

Without further ado, here are the top 15 most fuel efficient cars of 2012:

15. Volkswagen Golf TDI

Price: $26,105
Powered by: Diesel
Combined MPG: 34
City MPG: 30
Highway MPG: 42
Annual Fuel Cost: $1,668
Annual CO2 Produced: 6.3 tons
Comments: The VW Golf TDI is the only diesel to make this year’s list. The last few year’s have really dampened the excitement around diesels becoming a truly legitimate money-saving alternative.

14. Lexus HS 250H

Price: $37,905
Powered by: Gas-Electric Hybrid
Combined MPG: 35
City MPG: 35
Highway MPG: 34
Annual Fuel Cost: $1,414
Annual CO2 Produced: 5.1 tons
Comments: If you’re guilty-rich, you’ll love it. If you’re not, nothing to see here. Look away!

13. Smart ForTwo

Price: $13,240
Powered by: Gasoline
Combined MPG: 36
City MPG: 33
Highway MPG: 41
Annual Fuel Cost: $1,488
Annual CO2 Produced: 5.1 tons
Comments: How does the smallest car to make the list come in at #13?

12. Scion IQ

Price: $15,995
Powered by: Gas
Combined MPG: 37
City MPG: 36
Highway MPG: 37
Annual Fuel Cost: $1,338
Annual CO2 Produced: 5.0 tons
Comments: This newcomer from Scion has launched in California and will in the Midwest in March. It, sadly, is one of only two gasoline models to make the list. The IQ is tiny, but looks like a blast to drive. It came in at #5 on my list of the cheapest vehicles of 2012.

11. Honda CR-Z

Price: $20,135
Powered by: Gas-Electric Hybrid
Combined MPG: 37
City MPG: 35
Highway MPG: 39
Annual Fuel Cost: $1,338
Annual CO2 Produced: 5.0 tons
Comments: A damn fine looking, economical, and sporty hybrid that I can’t ever recall seeing on the road for some reason.

10. Ford Fusion Hybrid

Price: $29,495
Powered by: Gas-Electric Hybrid
Combined MPG: 39
City MPG: 41
Highway MPG: 36
Annual Fuel Cost: $1,269
Annual CO2 Produced: 4.7 tons
Comments: This car is almost identical to the Lincoln MKZ hybrid, at a lesser price.

9. Toyota Camry Hybrid LE

Price: $26,660
Powered by: Gas-Electric Hybrid
Combined MPG: 41
City MPG: 43
Highway MPG: 39
Annual Fuel Cost: $1,207
Annual CO2 Produced: 4.5 tons
Comments: At this price, both the Prius and Prius V seem like extreme bargains.

8. Toyota Prius V

Price: $27,160
Powered by: Gas-Electric Hybrid
Combined MPG: 42
City MPG: 44
Highway MPG: 40
Annual Fuel Cost: $1,179
Annual CO2 Produced: 4.4 tons
Comments: The Prius was so popular it has multiplied! The Prius V is a larger, more expensive version of the original Prius. Brand new in 2012.

7. Lexus CT 200H

Price: $29,995
Powered by: Gas-Electric Hybrid
Combined MPG: 42
City MPG: 43
Highway MPG: 40
Annual Fuel Cost: $1,179
Annual CO2 Produced: 4.4 tons
Comments: A hybrid Lexus for under $30,000? Still too much for my blood…

6. Honda Insight

Price: $19,120
Powered by: Gas-Electric Hybrid
Combined MPG: 42
City MPG: 41
Highway MPG: 44
Annual Fuel Cost: $1,179
Annual CO2 Produced: 4.4 tons
Comments: 2012 brings improved fuel economy. At its price, it almost made my list of the cheapest new cars of 2012. Yet it is large enough for a family to get around – and has incredible fuel efficiency.

5. Honda Civic Hybrid

Price: $24,820
Powered by: Gas-Electric Hybrid
Combined MPG: 44
City MPG: 44
Highway MPG: 44
Annual Fuel Cost: $1,125
Annual CO2 Produced: 4.1 tons
Comments: The hybrid of this classic economical car is not quite as economical as its Insight cousin.

4. Toyota Prius

Price: $22,880
Powered by: Gas-Electric Hybrid
Combined MPG: 50
City MPG: 51
Highway MPG: 48
Annual Fuel Cost: $990
Annual CO2 Produced: 3.6 tons
Comments: In its 3rd generation, the hybrid that started it all, the Prius is still the most popular fuel sipper out there. It is a great value for the price.

3. Chevy Volt

Price: $32,495
Powered by: Electric
Combined MPG: 94 (electric only)
City MPG: 95
Highway MPG: 93
Annual Fuel Cost: $648 (electric only)
Annual CO2 Produced: 0
Comments: The Volt is a plug-in electric hybrid that runs on electric and switches to gas if the battery is depleted. It’s MSRP is $39,995 without federal tax credit – it is primarily an electric and does qualify for the federal tax credit. Note that gas only would make it 40 highway, 35 city, and 37 combined, with an annual fuel cost of $1,447.

2. Nissan Leaf

Price: $21,625
Powered by: Electric
Combined MPG: 99
City MPG: 106
Highway MPG: 92
Annual Fuel Cost: $612
Annual CO2 Produced: 0
Comments: A re-starting problem really lowered the excitement around the launch of the Leaf. It also falls from the top to the 2nd most fuel efficient car spot as it is displaced by the cheaper Mitsubishi i.

1. Mitsubishi i

Price: $21,625
Powered by: Electric
Combined MPG: 112
City MPG: 129
Highway MPG: 99
Annual Fuel Cost: $540
Annual CO2 Produced: 0
Comments: Not yet released, but coming in early 2012, this will be the cheapest electric car on the market. It’s MSRP is $29,125, but a $7,500 hybrid tax credit brings that down to $21,625. State tax credits could bring it down further.

Best Fuel Efficient Car of 2012

Being in Michigan, I am bummed there are no electric tax credits in my state to match the $7,500 federal credit. If there were, I’d pre-order the Mitsubishi i or Nissan Leaf. The “i” (Jobs would roll in his grave) could be had for around $14k – putting it in third place of the cheapest vehicles for 2012. And with years of $1,000+ fuel savings ahead, it would be extremely economical. Unfortunately, only two states offer a credit of $6,000 or more, so reality must prevail.

Despite a strong first-year showing from the Mitsubishi i, the Honda Insight repeats for my pick of the best fuel efficient car. It’s cheapest model can be had for around $18,000, and that gets you a larger, highly functional car with an automatic transmission, 40+ mpg’s on the highway and in the city, a hybrid engine, and a nice set of features. It even slightly bumped its economy up by 1 mpg vs. last year for good measure.

Related Posts:

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• Chevy Volt vs. Nissan Leaf
• Who Killed the Electric Car?
• Cars on Craigslist

The Most Fuel Efficient Cars of 2012 is copyrighted by 20somethingfinance.com without consent to republish.

There are a few changes in 2012 versus the 2011 cheapest new cars list. Most notably, Chevy retired the drab and tired Aveo and replaced it with the beefed-up Sonic, which comes in as the 6th least expensive new vehicle. The brand new Scion IQ displaces the Scion XB, and comes in as the 5th lowest cost car for the 2012 model year. And the Fiat 500 Pop makes the list, in its inaugural model year. J-Lo would be proud.

A few returnees boost better fuel efficiency this year, particularly the Kia and Hyundai models as they move to improved 1.6L 6-speed automatic transmissions. I decided to include engine specs this year if you’d like to make comparisons.

All of the vehicles you will find on the list have automatic transmission. Why? It’s hard to find, negotiate, and re-sell manuals. If you are interested in manuals, each model, excluding the Scion’s have them. They to run roughly $1,000 less than the MSRP’s I quoted, but their limited availability may prevent your ability to find and negotiate (if you have 25 vs. 2 to choose from on a lot and other dealers locally have the same numbers, your negotiating power goes up).

The Used Vs. New Debate

Before running out any buying a shiny new car, do your homework to make sure it is the best use of your money. Be honest with yourself in evaluating whether you in fact need a car in the first place, and if you have a significant other, whether you need a second car.

If you do need a car, new cars might not present the best value for you – although, this list is a good place to start for value. If you get a new car, baby it, and ride it until its death, it is possible to get a better return for your investment than buying used. However, keep in mind that new cars lose 11% of their value as soon as they are driven off the lot, on average.

Other Factors to Consider with a Cheap Car

Beyond the prices I’ve listed, there are some other considerations you should have when shopping for a new car:

• Fuel economy is important. A Scion IQ, for example, would save you over $400 every year in fuel costs vs. the new Chevy Sonic. My source for fuel costs is fueleconomy.gov, which used a $3.23 average per gallon with 45% highway, 55% city miles, and 15,000 annual miles.
• New models are unlikely to offer up big incentives until the end of their model year. It’d be wise to wait. I did not factor incentives in to the prices listed.
• Ongoing costs and insurance costs for cheap cars is generally lower, but you don’t want to sacrifice safety. Make sure a car you choose rates high on safety.

Foreign Automakers Still Own the Market for the Cheapest Vehicles

Foreign Automakers claim ownership of 13 of the 15 cheapest new cars. Only the new Chevy Sonic and last year’s new Ford Fiesta make the list from the U.S. automakers. Topping the list with the most models are Kia (3), Scion (2), Nissan (2),and Honda (2). Smart, Hyundai, Chevy, Ford, and Toyota are each represented by one model on the list.

My Picks for the Most Improved & Best Cheapest New Cars of 2012

The Soul, Fit, and Fiesta are still personal favorites for their functionality, styling, and price. However, I have to hand it to the Versa for being a solid car with improved fuel efficiency (25 mpg to 30 city, and 33 to 38 in the city) and still comfortably being the second cheapest.

The once-ugly Kia Rio is now rather stylish, is $495 cheaper than last year, and jumps from 27 to 30 mpg city and 36 to 40 highway. It gets my pick for having the best improvement from last year to 2012.

Without further ado, here are the 15 cheapest new cars of 2012 from #15 up to #1. What’s your favorite?

15. Honda Civic

Base Automatic Transmission model: Honda Civic DX, 2-door Sedan
Engine: 1.8L, 5-speed Auto Transmission, 16-valve, 4 cylinder, 140 HP
MSRP: $17,175
Dealer Cost: $15,728
City MPG: 28
Highway MPG: 39
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The 2012 Civic is re-styled. With a $1,400 spread between MSRP and dealer cost, there may be room to negotiate.

14. Fiat 500

Base Automatic Transmission model: Fiat 500 Pop, 2-Door Hatchback
Engine: 1.4L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 101 HP
MSRP: $17,000
Dealer Cost: $15,905
City MPG: 27
Highway MPG: 34
Annual Fuel Cost: $1,785
Powertrain Warranty: 4 years or 50,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: As a guy, I hate to admit it (it’s definitely branded for the ladies), but this is kind of a cool car. Reminds me of the VW bug in appearances. The standard base model is pretty loaded in features. One disappointment? For a 1.4L, 6-speed, it gets very poor fuel economy.

13. Kia Forte

Base Automatic Transmission model: Kia Forte LX 4-Door Sedan
Engine: 2.0L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 156 HP
MSRP: $16,950
Dealer Cost: $15,644
City MPG: 29
Highway MPG: 36
Annual Fuel Cost: $1,671
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: Similar to the Kia Rio, but with more engine and slightly lower fuel economy.

12. Scion XD

Base Automatic Transmission model: Scion XD 4-Door Hatchback
Engine: 1.8L, 4-speed Auto Transmission, 16-valve, 4 cylinder, 128 HP
MSRP: $16,875
Dealer Cost: $15,755
City MPG: 27
Highway MPG: 33
Annual Fuel Cost: $1,671
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: If Scion wants to remain competitive with other automakers, they will need to focus on fuel efficiency. A 4-speed auto transmission is behind the game.

11. Honda Fit

Base Automatic Transmission model: Honda Fit 4-Door Hatchback
Engine: 1.5L, 5-speed Auto Transmission, 16-valve, 4 cylinder, 117 HP
MSRP: $16,745
Dealer Cost: $16,022
City MPG: 28
Highway MPG: 35
Annual Fuel Cost: $1,563
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Great functionality. Only comes in a hatch (it runs on a Civic base).

10. Kia Soul

Base Automatic Transmission model: Kia Soul 4-Door Hatchback
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $16,450
Dealer Cost: $15,379
City MPG: 27
Highway MPG: 35
Annual Fuel Cost: $1,615
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: 1.6L now available in 6-speed transmission, with better fuel economy.

9. Hyundai Accent

Base Automatic Transmission model: Hyundai Accent GLS, 4-Door Sedan
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,955
Dealer Cost: $15,239
City MPG: 30
Highway MPG: 40
Annual Fuel Cost: $1,468
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: I have not been in this car, but it has a cult-like following. 40 mpg highway is impressive.

8. Mazda 2

Base Automatic Transmission model: Mazda 2 Sport 4-Door Hatchback
Engine: 1.5L, 4-speed Auto Transmission, 16-valve, 4 cylinder, 100 HP
MSRP: $15,775
Dealer Cost: $14,354
City MPG: 28
Highway MPG: 34
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Has 4-speed auto trans vs. its cousin Fiesta’s 6-speed, giving it lower fuel economy. It does, however, offer a better warranty than the Fiesta.

7. Toyota Yaris

Base Automatic Transmission model: Toyota Yaris 2-Door L (Liftback/Hatchback)
Engine: 1.5L, 4-Speed Auto Transmission, 16-valve, 4 cylinder, 106 HP
MSRP: $15,600
Dealer Cost: $15,033
City MPG: 30
Highway MPG: 35
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Solid car is now restyled. Like the Scion, it’d benefit with value seekers in a move from a 4 to 6-speed engine.

6. Chevy Sonic

Base Automatic Transmission model: Chevy Sonic 2 LS 4-Door Sedan
Engine: 1.8L, 6-speed Auto, 16-valve, 4 cylinder, 138 HP
MSRP: $15,565
Dealer Cost: $14,973
City MPG: 25
Highway MPG: 35
Annual Fuel Cost: $1,730
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: New model from Chevy that replaces the Chevy Aveo. Would love to see this in a 1.4L in future years for improved mpg’s. 25 city is low for a car of this size.

5. Scion IQ

Base Automatic Transmission model: Scion IQ 2-Door Hatchback
Engine: 1.3L, Continuously Variable Auto Transmission (CVT), 16-valve, 4 cylinder, 94 HP
MSRP: $15,265
Dealer Cost: $14,936
City MPG: 36
Highway MPG: 37
Annual Fuel Cost: $1,309
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: New model from Scion, the IQ launches in California now and Midwest in March. It has the highest city MPG of any non-hybrid. It doesn’t look to be much bigger than a Smart Car, but has a bulkier build with big wheels.

4. Kia Rio

Base Automatic Transmission model: Kia Rio LX 4-Door Sedan
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,250
Dealer Cost: $14,325
City MPG: 30
Highway MPG: 40
Annual Fuel Cost: $1,468
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: $495 price decrease bumps it from #7 to #4 on the list. It also moves from 4 to 6-speed, bumping fuel economy from 36 to 40 on the highway. All of this, and its improved styling makes it the most improved car from 2011 to 2012.

3. Ford Fiesta

Base Automatic Transmission model: Ford Fiesta S Sedan, 4-Door
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,090
Dealer Cost: $14,157
City MPG: 33
Highway MPG: 39
Annual Fuel Cost: $1,468
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Great car. But the bigger (and not much more expensive) Focus is worth a look.

2. Nissan Versa

Base Automatic Transmission model: Nissan Versa Sedan 1.6S, 4 Door
Engine: 1.6L, Continuously Variable Auto Transmission (CVT), 16-valve, 4 cylinder, 109 HP
MSRP: $13,520
Dealer Cost: $12,907
City MPG: 30
Highway MPG: 38
Annual Fuel Cost: $1,468
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Some nice improvements in 2012 versus 2011. MPG’s jump from 25 and 33 with the continuously variable transmission. With its price, it deserves a look.

1. Smart ForTwo Pure

Base Automatic Transmission model: Honda Fit 4-Door Hatchback
Engine: 1.0L, 5-speed Auto Transmission, 12-valve, 3 cylinder, 70 HP
MSRP: $12,490
Dealer Cost: $11,991
City MPG: 33
Highway MPG: 41
Annual Fuel Cost: $1,458
Powertrain Warranty: 2 years or 24,000 miles
Limited Basic Warranty: 2 years or 24,000 miles
Notes: Good, but not ground-breaking mileage in a golf cart size, the worst warranty in the business, and a price that does not entirely set it apart from the competition? Other than being the cheapest car, it comes up a bit short.

Related Posts:

• Cars on Craigslist
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• Most Fuel Efficient Cars of 2011
• 2010 Cheapest New Cars

The Top 15 Cheapest New Cars of 2012 is copyrighted by 20somethingfinance.com without consent to republish.

I recently posted that one of my favorite credit cards, the Chase Freedom card, upped its promotion to $200 for new account holders. While that’s still true, they’ve now made it easier for you to get it.

Previously, you had to get the card, and then you get a $100 bonus after $500 in purchases in 3 months and then another $100 bonus when you make an additional $1,000  in purchases in 6 months.

Now, you will earn the $200 bonus cash back after making the $500 total in purchases in the first 3 months, which anyone can do when charging a portion of their groceries and/or utilities.

Chase Freedom offers:

• There are new rotating 5% cash back categories every three months. For example, you can get 5% Cash Back on up to $1,500 spent on gas stations and at Amazon.com from 1/1/12 – 3/31/12! Check out the complete 2012 Chase Freedom 5% bonus calendar.
• Unlimited 1% Cash Back on all other purchases without limits on what you can earn
• Up to an additional 10% Cash Back when you shop online at select merchants through Chase
• No annual fee
• Rewards never expire

Not bad!

The Chase Freedom is one of the cards my wife and I actually use and I’d highly recommend it.

This is a great cash back offer compared to what other cash back cards are offering and according to Chase, the Chase Freedom Visa $200 bonus is a very limited time offer.

If you sign on, as always, pay your balance in full every month.

Related Posts:

• Chase Freedom Review

Chase Freedom $200 Bonus Now Even Easier to Get is copyrighted by 20somethingfinance.com without consent to republish.

Definition of Retirement: sit around the home, read the paper, play some golf, drive around town in a Cadillac, catch the early bird special at the local diner, watch some TV, go to bed, and do it all over the next day. Mix in an occasional RV or European vacation to take some photos and all was right in the world.

Retirees had a simple financial formula for achieving that dream:

1. Hit age 65.
2. Stop Working.
3. Collect your pension check, replacing the majority of your annual income before retirement.
4. Collect your Social Security benefits to fill in the rest.
5. Rely on your retiree health benefits from your employer.
6. Collect your medicare benefits to fill in the rest.

Those days are all but over. Why?

1. Pensions are dead – our generation won’t get them, and if you are lucky enough to get one, good luck keeping most of it.
2. Most individual investors fail miserably at investing. With 401K’s, any hopes we have of retiring are dependent on a.) you becoming a good, patient investor, b.) the market performing well (just look at the last decade’s miniscule returns if you aren’t scared yet).
3. Social security benefits will not deliver what they have in the past (Social Security has historically replaced 40% of income). That is, if one of our political parties does not successfully push through the privatization of Social Security first, which would result in an impact similar to shifting pensions to 401K’s – that is, placing more burden on individual investors to get it right.
4. Retiree health benefits are about as rare as pensions will be for our generation – almost non-existent.
5. For better or worse, medicare as it stands is under attack by Republicans. According to the non-partisan Congressional Budget Office, Ryan’s medicare altering proposal would shift more and more burden to individual retirees as it encourages a move to individuals buying health insurance through the private sector and is tied to general inflation vs. medical inflation. Whether Ryan’s plan passes or not, the U.S. has a budget problem that is going to encourage shifting more and more burden to retirees over the years. We can’t escape that.

Traditional Retirement is Dead

Scary stuff. If you don’t start hoarding a significant amount of your income (50%+), average double digit returns, and stay in impeccable health… retirement, in the traditional sense, is all but dead to you.

The system itself was designed when we were primarily a blue collar society and our bodies could not take working much beyond age 65. As we have shifted more and more towards and information based economy, perhaps we simply don’t need the 65 and quit formula. We may not have a choice.

You simply won’t have have the same entitlement programs to fall back on and private sector employers won’t foot your bill either. For better or worse, IT’S ALL ON YOU.

I’m not taking a political stance here. I’m trying to warn you that you will really have to look out for yourself starting yesterday and get a little bit lucky if you want to have a traditional retirement in today’s political and economic climate.

Is that such a bad thing?

The New Retirement

Perhaps my views will change as I age. I just can’t imagine a life centered around doing nothing.

It sounds like preparing for death.

When I’m 65, 70, and beyond, I want to live it up!

I can’t imagine NOT working in some capacity. Sure, at the age of 70, I don’t want to be slaving away in a factory line somewhere or on a computer (I almost said ‘pushing paper’) for 40 hours a week, but I do want to pursue creative interests, do meaningful work, and engage with others.

And if I have to take a part-time job to grab partial health insurance, so be it.

I think this will be the norm for our generation. And it might not be all that bad.

Shifting Our Mindset About Retirement

Retirement is all about situation and mindset.

I view it as a gradual or potentially even sudden move from following monetary pursuits to following personal objectives.

In other words, achieving enough financial freedom to do what you want in life.

There may be some peaks and valleys along the way that force you to seek a meaningless job part-time that offers health insurance or force you to take a full-time job in order to replace lost retirement savings.

Maybe retirement for you is becoming debt free and quitting your corporate 9-to-5 at age 40, working part-time at a Starbucks for health insurance, and gaining the bulk of your income from passion-related multiple income streams.

Does that sound so bad?

The New Retirement Formula

Your mileage may vary, but I think the new retirement will look something like this:

1. Become debt free.
2. Pursue interests that result in income.
3. Supplement health insurance through income or part-time work with health benefits.
4. Enjoy the nice added benefit of Social Security, Medicare, or other entitlements, but certainly don’t count on them.

Notice the lack of retirement age or ‘stop working’ from the equation.

What Steps Can you Take to Prepare for the New Retirement?

Maybe I’m wrong, but I just don’t see our society moving to a heavier benefit entitlement system and our current system isn’t even sufficient for our generation to realize a traditional retirement. As a result, the traditional retirement is dead. In order to be prepared for and embrace that:

1. Stop worrying, it only causes inaction and a victim mentality. Start acting.
2. Attack debt with a vengeance. The sooner you can become debt free, the sooner you will be able to achieve the new retirement.
3. We’ve lived like many of our parents who have a cushy pension and who will get full Social Security payouts. We need to stop that. Keep your living expenses low. Consider downgrading or selling your vehicles and buying a tiny home instead of a larger one.
4. Save like you never have before, particularly outside of your retirement accounts. Still put significant funds into your retirement accounts, but realize that those accounts are designed for the traditional retirement model. If you withdraw early, you will be penalized. The new retirement will require you to have a larger savings base outside of retirement accounts that you can withdraw from when needed.
5. Start figuring out what your marketable hobbies and creative interests are and start pursuing them. Whether you achieve the new retirement or not, you should consider this.
6. Become multi-skilled so that you can be flexible and recession proof.

Whether you believe that traditional retirement is dead or not, these actions will only improve your financial standing and freedom to pursue your interests in life.

Traditional & New Retirement Discussion:

• Which retirement – old or new – sounds more appealing to you?
• Do you believe that the traditional retirement system is dead?
• What is your new retirement vision?
• How are you planning on preparing for the new retirement?

Traditional Retirement is DEAD! Now What? is copyrighted by 20somethingfinance.com without consent to republish.

I later asked readers why they had not got started investing outside of a 401k. The first part in the series dealt with the question of whether you should pay off debt or invest. This part will deal with how to actually start a discount online brokerage account.

When I polled readers, 18% said that the reason they have not invested is they didn’t know how to start an online broker account. Hopefully this post will do an adequate job in removing that barrier.

What is a Discount Online Broker?

A discount broker differs from a full-service broker in that YOU make the decision on what to invest in and actually execute the trade on your own. That may sound scary at first, but it’s really not so bad.

There are plenty of discount online brokers out there that have helped drive the cost of trading for amateur investors down significantly over the years. A discount online broker is really all you need. Full-service brokers charge exorbitant fees and don’t necessarily have your best interests in mind.

What Can you do Through an Online Broker?

There is a pretty long list of things that you can do through a discount broker, including:

• Putting your money into a money market account. If you leave your cash sitting, most will offer a nominal savings rate, much like a bank.
• Investing in a CD.
• Buying and selling stocks.
• Buying and selling stock options.
• Buying and selling index funds and other mutual funds.
• Buying and selling bonds.

And it’s relatively cheap to do all of them. Stock trades at most discount brokers are $7 or less and many offer no-transaction fee mutual funds, index funds, and ETF’s (more on what each of these is down the road…).

To put it simply: an online broker is a one-stop shop for you to invest your money in just about anything.

The Best Online Brokers: A Comparison

To get started, you need to pick a broker. There are a lot of good ones out there. Most offer relatively cheap trades. Some charge annual fees. Others have high minimum opening contributions. Some have better customer service and trading tools than others. Depending on your situation, the best discount broker for you might vary.

I generally look for accounts that don’t charge BS maintenance or inactivity fees or annual fees. I also look for low costs to trade stocks and funds and an easy to use interface. Here are a few of my favorites (none of these have inactivity or maintenance fees, and only 2 have annual fees):

TradeKing:

I have both my Roth IRA and Traditional IRA with TradeKing. TradeKing does not charge fees on their IRA’s and stock trades are only $4.95 each. Check out my TradeKing review for a full run-down.

• Stocks: $4.95/trade
• Mutual Funds: $14.95/open
• Minimum Opening Deposit: $0
• Annual & Inactivity Fees: $0 for IRA’s, $0 for non-retirement accounts, $0 inactivity fee
• Promotion: Reimbursement of up to $150 in transfer fees.

Zecco:

I have an investment account with Zecco because they offer $4.95 stock trades. They once offered 10 free trades per month if you had a balance over $25K, but they no longer do that, unfortunately. Check out my Zecco review for more on them.

• Stocks: $4.95/trade
• Mutual Funds: $10/open
• Minimum Opening Deposit: $0
• Annual & Inactivity Fees: $30 for IRA’s, $0 for non-retirement accounts, $0 inactivity fee

Scottrade:

I have had investment accounts with Scottrade. They have always maintained a flat $7 trading fee while others have shifted their fees around to gain new customers. One nice thing about Scottrade is that they have over 500 local branches that you can visit.

• Stocks: $7/trade
• Mutual Funds: $17/open
• Minimum Opening Deposit: $500
• Annual & Inactivity Fees: $0 for IRA’s, $0 for non-retirement accounts, $0 inactivity fee

OptionsHouse:

OptionsHouse has the lowest prices of the group at $3.95 for stocks and $9.95 for mutual funds. Don’t let the ‘options’ in the name scare you. You can do all of the standard stock and mutual fund investing with Optionshouse that you can elsewhere. They aim to make a platform that is friendly to options traders.

• Stocks: $3.95/trade
• Mutual Funds: $9.95/open
• Minimum Opening Deposit: $1,000
• Annual & Inactivity Fees: $0 for IRA’s, $0 for non-retirement accounts, $0 inactivity fee
• Promotion at the moment: Open a new IRA and get 100 free trades and up to $125 in transfer fees. Use promo code IRA FREE. Or you can open a non-retirement account and get a free Dell computer monitor.

Vanguard:

My 401K is housed with Vanguard. What I really like about them is they have an extensive list of very cheap index funds and ETF’s under their brand and they don’t charge you for trading in and out of them. If you want to invest in their index funds and ETF’s and have a large enough balance to avoid the $20 annual fee, then Vanguard is a great choice.

• Stocks: $7/trade, branded ETF’s & index funds are free
• Mutual Funds: $35 (if you go with Vanguard, just invest in their funds for free as they have the best index funds and ETF’s out there)
• Minimum Opening Deposit: $0
• Annual & Inactivity Fees: Vanguard charges a $20 account fee on IRA’s and other accounts if you have less than $50,000 in assets. If you have more, there are no fees. There are also $0 inactivity fees.

Schwab:

Much like Vanguard, Schwab carries a number of low cost branded ETF’s that they don’t charge you to trade in and out of. Their trading prices are otherwise the highest of the group, at $8.95 each and $49.95 to buy AND sell mutual funds that are not their brand. Don’t go with Schwab unless you intend in investing in their funds.

• Stocks: $8.95/trade
• Mutual Funds: $49.95/open & sell (excluding Schwab funds, which are free)
• Minimum Opening Deposit: $1,000
• Annual & Inactivity Fees: $0 for IRA’s, $0 for non-retirement accounts, $0 inactivity fee

How to Start an Online Broker Account

Now that you’ve picked out a broker, you’re probably wondering what steps you need to take to actually open an account. Check out the minimum opening deposits required, which I listed in the previous section. Note that buying into a mutual fund is usually more prohibitive than actually opening your broker account. Many mutual funds require you to have an opening investment of $1,000 to $2,500. Stocks and ETF’s don’t have these requirements.

Once you have that sorted out, the steps are generally as follows:

1. Create a login and password.
2. Choose the type of account you want. For most of you, it will be an individual investment account (non-retirement), a traditional IRA, or a Roth IRA. You’ll then be asked whether this is a cash or margin account. Since trading on margin is risky, you’ll want to select ‘cash’ 99.99% of the time.
3. You’ll then have to fill out a ton of personal information about yourself including marital and income status, your social security, previous investing history, etc. This information is required by federal law when you start a new broker account, so everyone has to do it, despite how invasive it may seem.
4. You’ll have to fund your account. Most online brokers allow you to do this in a few different ways: via ACH withdrawal from a bank account (usually free to do), via a wire transfer (your bank usually charges for this), via a transfer from another broker, or via check. Note that most, if not all, brokers accept cash or other form of payment.
5. After you fund your account, there is usually a clearing period of up to a week for a background check and for the funds to clear.
6. That’s it. As soon as your funds are cleared, you’re ready to invest!

Estimated time to complete the application and open an online broker account is usually under 15 minutes. It’s relatively straight forward. The hard part is waiting to invest your funds until they have cleared.

Now What?

You’re probably wondering what to do now. I will go through investing basics in upcoming posts, but I can only take you so far and can’t give specific investment recommendations. Start becoming obsessed with learning how to invest. In the meantime, move your funds to a money market account that will earn you a little bit of interest while you figure out what to invest in.

One step at a time. Open your online broker account first!

How to Start an Online Broker Account is copyrighted by 20somethingfinance.com without consent to republish.

One downside to economic recovery (which nobody would complain about right now) is higher costs of fuel. 2011 gas prices are already firmly above $3 per gallon and analysts are predicting prices to head north of $4 per gallon by the end of summer. Over the next decade, $5, $6, or $7 per gallon is certainly within reach. If you bought a gas guzzler when prices dropped to $2 a gallon briefly, you should have known better.

Ford, GM, and many foreign automakers are building smaller, more fuel efficient vehicles in anticipation of the continued rise in fuel costs. My advice? Place a huge premium on fuel efficiency in the coming years. If you’re in the market for a new vehicle, this list of the 15 most fuel efficient cars of 2011 should help. And you can also check out my list of the most fuel efficient cars of 2012.

Did Electric Cars Make the List?

This list wasn’t the easiest to make. The most fuel efficient vehicles were pricey due to their new technology and scarcity. As such, I cut out any vehicle with an MSRP above $30,000. This automatically excluded the Tesla Roadster, other limited production, luxury, or obscure electric cars, alternative energy vehicles (natural gas, etc.), and the Chevy Volt.

Some of these vehicles might make sense economically with the right federal and state incentives (particularly, the Chevy Volt), but even with $5 per gallon gas, it might be tough to make your money back. At $3 per gallon, it’s almost impossible.

City vs. Highway MPG Efficiency

Another challenge was figuring out whether or not to focus on city vs. highway mpg – which created two separate and distinct lists. Going with city mpg resulted in a list dominated by expensive hybrids. This is a personal finance blog after all, so I ultimately decided to go with best highway mpg because it resulted in a much cheaper list of vehicles.

Annual Fuel Costs & Fuel Efficiency

In my 2011 cheapest new cars post, I included the annual fuel cost metric because I’m a firm believer that when you consider a vehicle purchase, you’re only touching the surface of overall vehicle cost if you only consider the purchase price. Surprisingly, only 5 of the 15 vehicles made this list. Small doesn’t always equate to the most fuel efficient, apparently.

Take note that annual fuel costs listed are based on 45% highway, 55% city driving, 15,000 annual miles and a fuel price of $ 3.09 per gallon. If you have a different driving makeup, you can plug in your mileage at fueleconomy.gov for each vehicle to find your specific fuel costs.

Here is the list of the 15 most fuel efficient cars of 2011. Enjoy!

15. Kia Forte

Price: $15,390
Highway MPG: 36
City MPG: 26
Annual Fuel Cost: $1,589
Annual CO2 Produced: 6.2 tons
Comments: Much more attractive and more kick than it’s Rio sister, the Forte has that great 10-year, 100,000 mile warranty in addition to its strong fuel economy.

14. Kia Rio

Price: $15,390
Highway MPG: 36
City MPG: 27
Annual Fuel Cost: $1,543
Annual CO2 Produced: 6.2 tons
Comments: For the same price, I’d opt for the more attractive Forte any day. It sports a 1.6L engine but gets only 1 mpg better in city mileage than the Forte’s 2.0L.

13. Hyundai Accent

Price: $13,175
Highway MPG: 36
City MPG: 27
Annual Fuel Cost: $1,543
Annual CO2 Produced: 6.2 tons
Comments: The hatchback version of this vehicle isn’t that bad looking. It’s over 2,000 cheaper than the Forte and Rio, with the same great warranty and fuel economy.

12. Mini Cooper

Price: $20,100
Highway MPG: 36
City MPG: 28
Annual Fuel Cost: $1,613
Annual CO2 Produced: 6.0 tons
Comments: The Mini Cooper has looked the same for at least a decade (and pretty close to the original back in the 50′s. It’s a sexy little car, but read reviews inside and out, it has a lot of critics questioning its reliability.

11. Ford Fusion Hybrid (same vehicle as Mercury Milan Hybrid and Lincoln MKZ Hybrid)

Price: $28,240
Highway MPG: 36
City MPG: 41
Annual Fuel Cost: $1,187
Annual CO2 Produced: 4.8 tons
Comments: The Ford Fusion is nearly identical to the Mercury Milan and Lincoln MKZ, all of which come in a hybrid form. If price is your goal, the Fusion is easily the cheapest of the three. Still, compared to the Prius, Insight, and Camry hybrids, which all have better fuel economy, its price tag is too high. Ford is putting out an all-electric Focus in 2012. At the right price, it should be a game changer in the electric and hybrid markets.

10. Ford Fiesta

Price: $14,390
Highway MPG: 38
City MPG: 29
Annual Fuel Cost: $1,404
Annual CO2 Produced: 5.7 tons
Comments: You know my love for the Ford Fiesta. It was my pick for the best inexpensive vehicle of 2011. Welcome back, Ford.

9. Honda CR-Z

Price: $19,200
Highway MPG: 39
City MPG: 35
Annual Fuel Cost: $1,251
Annual CO2 Produced: 5.1 tons
Comments: No, it’s not a typo. This is indeed the Honda CR-Z – not the CR-V. A sporty hybrid for under $20K? Also not a typo. Great job on this one, Honda.

8. Smart ForTwo

Price: $12,635
Highway MPG: 41
City MPG: 33
Annual Fuel Cost: $1,389
Annual CO2 Produced: 5.2 tons
Comments: Golf Car on steroids. If you’re going to charge over $12,000 for this car, at least make people feel like they are getting a good value and add in AC and a CD player!

7. Audi A3 (Diesel)

Price: $30,250
Highway MPG: 42
City MPG: 30
Annual Fuel Cost: $1,469
Annual CO2 Produced: 6.2 tons
Comments: It broke my $30,000 rule, but only by $250, so I decided to include it. Note that with the diesels that make this list, annual fuel costs are actually higher than some of their gasoline counterparts because the cost of diesel has been higher than gasoline. They also put out slightly more pollution.

6. Volkswagen Jetta TDI (Diesel)

Price: $22,995
Highway MPG: 42
City MPG: 30
Annual Fuel Cost: $1,469
Annual CO2 Produced: 6.2 tons
Comments: The latest generation Jetta TDI (diesel) gets a nice 42 mpg highway, but at $5k more than the Volkswagen Golf (which gets the same, it’s hard to make an argument for it.

5. Volkswagen Golf TDI (Diesel)

Price: $22,800
Highway MPG: 42
City MPG: 30
Annual Fuel Cost: $1,469
Annual CO2 Produced: 6.2 tons
Comments: Convenient hatchback, good looking, great mileage, and affordable. A little pricier than similar hatchbacks, but the added mpg might make it worth it.

4. Honda Civic Hybrid

Price: $23,950
Highway MPG: 43
City MPG: 40
Annual Fuel Cost: $1,131
Annual CO2 Produced: 4.6 tons
Comments: Compared to the new Honda Insight and the competing Toyota Prius, the Civic Hybrid seems overpriced.

3. Honda Insight Hybrid

Price: $18,200
Highway MPG: 43
City MPG: 40
Annual Fuel Cost: $1,131
Annual CO2 Produced: 4.6 tons
Comments: Honda got it right here, but the Insight hasn’t received its due press. A hybrid that gets over 40 mpg in the city and highway for only $18k? Why isn’t this car more popular than it is! Perhaps the old (ugly) Insight model is dragging down its image.

2. Toyota Prius Hybrid

Price: $21,600
Highway MPG: 48
City MPG: 51
Annual Fuel Cost: $927
Annual CO2 Produced: 3.8 tons
Comments: The Toyota Prius is in its 3rd generation, and it is still the most economical hybrid out there at almost 50 mpg highway and city. On price alone, the Insight gives it a run for its money. Is the extra fuel economy worth the extra $3,400.

1. Nissan Leaf Electric

Price: $25,280 (after federal tax credit of $7,500)
Highway MPG: 99 (equivalent)
City MPG: 99 (equivalent)
Annual Fuel Cost: $561
Annual CO2 Produced: 0
Comments: The Nissan Leaf qualifies for a $7,500 federal tax credit this year, pushing its MSRP down to $25,280. Some states are offering a matching $7,500 credit. If yours does, you have to seriously consider it as your next new car before these credits dry up.

Best Fuel Efficient Car of 2011

If I lived in a state that gave a matching $7,500 tax credit on the Nissan Leaf, I’d probably buy it tomorrow. Under $18K for an electric vehicle with an equivalent 99 mpg is outstanding and I’d consider it a great investment, particularly if gas prices skyrocket (and even if they stay the same).

The reality is that there are few states that actually offer this credit. And as such, my pick is the Honda Insight. If it looked any more like the Prius, Toyota could file patent lawsuits (if they haven’t already). Yes, it does get a bit less mpg, but it’s $3,400 cheaper. It’s nicely equipped as well. And there’s no buzz around it, so you may be able to get it for a good deal from a dealer with a large inventory of them. The Prius, which still sets the standard for hybrids, comes in a close second and could easily reclaim the top spot if its price dropped a bit.

What’s your pick?

The Most Fuel Efficient Cars of 2011 is copyrighted by 20somethingfinance.com without consent to republish.

My 2010 cheapest cars report covered the top 10 low-cost vehicles. This year, I bumped it to 15, because a few of my favorites didn’t quite make the top 10. ALL of the vehicles you will find on the list have automatic transmission. I don’t drive a stick myself, and I’m sure many of you don’t either. However, if you are interested in manual trans, all of these vehicles have a version, and they generally run about $1,000 less than the MSRP’s I quoted.

Update: I have since published a list of the 2012 cheapest new cars.

The New Car Caveat

Before we get started, I’ll once again give the caveat that I am not an advocate of buying new cars, however, I do believe that if you buy a cheap new car and drive it into the ground, there is a good chance that it could comparatively save you money versus buying used. Want the best of both worlds? The 3-year resale value of these vehicles is usually around 55-60% and the 5-year resale value is often around 40%.

You’ll notice I also listed dealership costs, which should give you an idea of how much room you have to haggle. The Honda Civic and Hyundai Accent should have a lot of wiggle room, with over $2,000 in difference between dealer cost and MSRP. The Mazda 2 and Kia Rio, on the other hand, are actually both priced below dealer cost, making them loss leaders for the dealership. Wiggle room will be tight.

Current incentives were not factored into the prices, and a few models actually did have up to $1,000 cash back incentives at the moment.

Fuel, Maintenance, & Insurance Costs on Cheap Cars

Other than the price itself, cheap cars tend to have much lower total ownership costs than their more expensive brethren. Small and cheap tend to go hand-in-hand, and so do small and fuel efficient. Most of the vehicles on this list have an average EPA estimated MPG of over 30. The one year fuel cost estimates were based on 45% highway driving, 55% city driving, 15,000 annual miles, and $3.07 for a gallon of regular gasoline (source: fueleconomy.gov).

Maintenance costs are usually cheaper as well. The goal of auto manufacturers is to produce these vehicles as inexpensively as possible. Therefore, their parts are cheap. And so are their replacement parts. And because these vehicles tend to be popular, their parts are easy to find, reducing scarcity and lowering prices.

Insurance costs on these cars are usually lower as well because insurance costs are derived from the market value of the vehicle. The lower the cost of vehicle, generally, the lower the cost of insurance for it.

Once Again, Foreign Automakers Dominate the List of Cheapest Vehicles

All but two of the vehicles to make this year’s list were from foreign automakers. The two that did? The underwhelming Chevy Aveo and the brand new Ford Fiesta. Disappointing, but I have no doubts that you’ll see U.S. automakers continue to make the shift to smaller, cheaper cars in the very near future.

My Picks for the Best Cheapest Car of 2011

It’s a toss-up. I’m a huge fan of functionality, so hatchbacks and utility are big wins in my book. Also, if I’m going to buy a new vehicle, it’s not going to be ugly. I’m going to go with the Fiesta. It’s stylish, and excluding the only golf cart to make the list (ForTwo), the most fuel efficient. The hatchback also gives it functionality. The Soul and Fit come in a close second.

15. Scion XB

Base Automatic Transmission model: Scion XB 2.4L
MSRP: $16,950
Dealer Cost: $16,494
City MPG: 22
Highway MPG: 28
Annual Fuel Cost: $1,920
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Not the most fuel efficient or attractive, but it does boast the most powerful engine of the bunch.

14. Nissan Cube

Base Automatic Transmission model: Nissan Cube 1.8S
MSRP: $16,650
Dealer Cost: $15,536
City MPG: 27
Highway MPG: 31
Annual Fuel Cost:  $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Ugly, but in an endearing, futuristic way. The Cube is spacious and functional, which is definitely appreciated in a small, cheap vehicle.

13. Honda Civic

Base Automatic Transmission model: Honda Civic DX, 2-door 1.8L
MSRP: $16,605
Dealer Cost: $14,708
City MPG: 25
Highway MPG: 36
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: What can you say? It’s a classic amongst frugal deal seekers. It has stood the test of time longer than any other entry, and probably for good reason.

12. Kia Soul

Base Automatic Transmission model: Kia Soul 2.0L I4 A/T
MSRP: $16,495
Dealer Cost: $16,168
City MPG: 26
Highway MPG: 31
Annual Fuel Cost: $1,644
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: What’s not to like about the Kia Soul? It’s probably the best looking vehicle of the bunch, it’s functional, and it’s got that awesome warranty on top of it.

11. Kia Forte

Base Automatic Transmission model: Kia Forte LX 2.0L I4 6-speed A/T
MSRP: $15,995
Dealer Cost: $15,052
City MPG: 26
Highway MPG: 36
Annual Fuel Cost: $1,589
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: A sleeper in the bunch. Sleek, fuel efficient, and that great Kia warranty.

10. Scion XD

Base Automatic Transmission model: Scion XD 1.8L
MSRP: $15,970
Dealer Cost: $15,466
City MPG: 27
Highway MPG: 33
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Not a bad looker, but the interior looks tight.

9. Honda Fit

Base Automatic Transmission model: Honda Fit 1.5L Hatchback
MSRP: $15,900
Dealer Cost: $14,991
City MPG: 28
Highway MPG: 35
Annual Fuel Cost: $1,487
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The Honda Fit might have the best combination of price, functionality, and fuel economy. It’s hard to be in terms of pure value.

8. Chevy Aveo

Base Automatic Transmission model: Chevy Aveo Sedan 4-door
MSRP: $15025, the 5-door Aveo 5 Hatchback comes in at just $150 more ($15,175)
Dealer Cost: $14,920
City MPG: 25
Highway MPG: 34
Annual Fuel Cost: $1,644
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: It’s time for GM to give the Aveo a much needed face-lift.

7. Kia Rio

Base Automatic Transmission model: Kia Rio LX 1.6L I4 A/T
MSRP:  $14,995
Dealer Cost: $15,052
City MPG: 27
Highway MPG: 36
Annual Fuel Cost: $1,533
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: I just get a feeling of cheap when I look at this car. And not in a good way.

6. Mazda 2

Base Automatic Transmission model: Mazda 2 Sport 1.5L Hatchback
MSRP: $14,980
Dealer Cost: $15,054
City MPG: 27
Highway MPG: 30
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Wow, where did this one come from? Fuel economy isn’t the greatest for a 1.5L, but you have to appreciate the price. This is a new entry to the market this year.

5. Hyundai Accent

Base Automatic Transmission model: Hyundai Accent GS 1.6L 3-door hatchback
MSRP: $14,695
Dealer Cost: $12,546
City MPG: 27
Highway MPG: 36
Annual Fuel Cost: $1,533
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: Good warranty and there’s definitely wiggle room on the price with the difference between MSRP and dealer cost.

4. Ford Fiesta

Base Automatic Transmission model: Ford Fiesta S Sedan 1.6L 6-speed
MSRP: $14,390, Hatchback version runs at $16,190
Dealer Cost: $12,936, $15,473 for the hatchback
City MPG: 29
Highway MPG: 40
Annual Fuel Cost: $1,533
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Love it. I showered praise in my Ford Fiesta review last year, and it’s lived up to the hype in its first year. Peppy, fun, and very fuel efficient. Downside? The much better looking hatchback jumps up in price significantly over the sedan.

3. Toyota Yaris

Base Automatic Transmission model: Toyota Yaris 3 Door Liftback, 4 Speed Auto
MSRP: $13,755
Dealer Cost: $12,517
City MPG: 29
Highway MPG: 35
Annual Fuel Cost: $1,487
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The hatchback is an attractive little guy, but I’m not sure it’s as functional as some of its peers due to its small size.

2. Nissan Versa

Base Automatic Transmission model: Nissan Versa Sedan 1.6L, 4 Door
MSRP: $12,990 ($14,940 for the hatchback)
Dealer Cost: $12,337
City MPG: 25
Highway MPG: 33
Annual Fuel Cost: $1,644
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The hatchback might be the sleeper in the whole bunch. It’s very spacious and cheap.

1. Smart ForTwo

Base Automatic Transmission model: Smart ForTwo Pure Coup 1.0L
MSRP: $11,990
Dealer Cost: $11,516
City MPG: 33
Highway MPG: 41
Annual Fuel Cost: $1,380
Powertrain Warranty: 2 years or 24,000 miles
Limited Basic Warranty: 2 years or 24,000 miles
Notes: There should be an asterisk next to this entry. Yes, technically, it’s a highway approved vehicle, but it’s little more than a souped up golf car, in my opinion. Everything about this car says ‘cheap’, and not in a good way. And it has an industry worst 2 year, 24,000 mile warranty to back it. For what you actually get, I’d expect this car to retail for about $8k.

Related Posts:

• How to Save on Auto Insurance
• Most Fuel Efficient Cars of 2011
• How to Donate your Car to Charity
• Chevy Volt vs. Nissan Leaf

The Top 15 Cheapest New Cars of 2011 is copyrighted by 20somethingfinance.com without consent to republish.

Many of the services I will mention have ‘non-free’ (paid) alternatives. What’s particularly great about this list is that the free offerings do not suffer in their quality in comparison to its paid competitors. In fact, many are industry leaders – or will soon be someday – in their niche.

And some of these things aren’t services at all, but rather, ways that you can get free money that you might be missing out on. No catch, other than the fact that you have to be motivated and execute, which is always easier said than done. What better time of year than the beginning?

Free Checking

There has been widespread concern that new consumer protection from bank overdraft fees would wipe out the ‘free’ part of free checking accounts. Many banks have eliminated free checking accounts, but some of the best online banks have not followed suit. The two best online checking accounts I’ve found are:

• Ally Bank Interest Checking: $0 monthly fee, $0 balance to open, free checks, zero ATM fees (they actually pay for fees charged by other banks!), and you earn interest earned on your balance (with a high enough balance you exceed 1%).
• Everbank Yield Pledge Checking: $0 monthly fee, $1,500 to open, free checks, zero ATM fees (they also reimburse), and a high starting interest rate of over 1%.

Free Stock Trades

Check out OptionsHouse, a discount broker that is now offering up to 100 commission free trades if you have a minimum $3K balance when you enter promo code IRAFREE when opening a new IRA. The free trades are good for 60 days.

You can also get up to $125 in transfer fees reimbursed if you are switching from another online broker.

Free Credit Cards

When the Credit Card Act passed earlier this year, there was widespread fear that it would lead to more credit card issuers charging annual fees, particularly on cards with cashback rewards. Many of them did, however, the best rewards cards out there still have no annual fee. A few of my faves are:

• Costco American Express Card: No annual fee (with Costco membership), 3% cashback on gas & restaurants, 2% cashback on travel, 1% on everything else. Additionally, AmEx has the best added perks and customer service. Check out my full Costco American Express review for more.
• Chase Freedom Card: No annual fee, 0% intro APR’s on purchases and transfers, up to 5% cashback in specified categories (unlimited 1% on everything else), and a special bonus promo of $200 cashback after making $500 in purchases in your first 3 months. Check out my Chase Freedom review for more.
• Discover More Card: No annual fee, 0% intro APR’s on purchases and transfers, up to 5% cashback in specified categories (and up to 1% on everything else), a limited-time bonus promotion of $100 when you make $500 in purchases in your first 3 months, and up to 20% cashback when you shop at Discover partners. For more, check out my Discover More review.

As with all credit cards, in order to make them ‘free’, and even get cashback in a meaningful way, pay your balance in full each month.

Free Debit Card Rewards

The very few debit cards out there that offer cashback rewards typically offer a paltry % cash back. And many of the ones that do will charge you an annual fee just for the perk. Not PerkStreet Financial. Their MasterCard debit card offers an amazing 2% cash back (more than any other debit card and 99% of the credit cards out there).

Perkstreet gets my pick for being one of the best new financial service products. 2% cashback on a debit card – are you kidding me? Check out my PerkStreet Financial review for more information.

Free Credit Score

Credit Karma is a completely free credit score reporting service that offers up your TransUnion credit score. Although not the FICO score used by lenders, it should give you a close approximation to what your FICO score might be. There are no hidden free trials (then get screwed with a monthly charge) and no credit card is required to sign up.

Credit Karma also announced that they are now offering free credit monitoring! This is a service that usually costs $15/month!

How does Credit Karma offer this free service? Much like the Mint.com monetization model, Credit Karma will offer up partner services as a way for you to save money.

Free Money

Yes, you heard me right. Free money. No joke. You just have to have a little patience, Axl (like wait until you’re 65 type patience). If your employer matches funds that you contribute to your 401k, get as much as that free money as possible.

So many young professionals overlook this very important employment perk and they’ll be kicking themselves later in life for not having taken advantage of it and letting that free money compound over the years. It’s free money, folks! It may be the only time you’ll ever get it.

Free Capital Gains

After you’ve received your employer’s free 401k matching funds to the max extent that they offer, it’s time to go Roth – Roth IRA, that is. Since all funds that you contribute to a Roth IRA are pre-taxed, any capital gains that you make in the future are tax free. Check out the 2011 Roth IRA contribution limits (same as 2010) to find out how much you can contribute next year and start planning ahead.

On top of free capital gains, TradeKing offers up IRA’s that do not charge an annual fee. I house my Roth and Traditional IRA’s with them.

Free Tax Software

Like it or not, it’s time to start working on filing your 2010 taxes. Tax software makers Turbotax and H&R Block both offer up free 1040EZ federal tax software and free federal e-filing (state is extra on both), which should be sufficient enough for 60-65% of Americans who do not itemize tax deductions (a crazy stat, if you ask me).

Free Personal Finance Software

If you haven’t used Mint.com yet? What is stopping. In full disclosure, I’m slightly biased as I write for Mint, but I was using their service long before I started doing so and have continued to get a lot of value from Mint’s free budgeting and planning capabilities. You can get automated net worth and account balance updates, find out what others in your area are spending on certain categories, and suggestions on how to save money. And it’s all free. Many knock-off services out there are charging for less.

If you’re looking for something that is simple and basic, check out my free to download budgeting spreadsheet.

Free Credit Report

Don’t let marketing companies in disguise offer you credit reports (for free or paid), when you can 3 free credit reports per year. AnnualCreditReport.com (the real-deal website, mandated by the federal government) offers you three free credit reports annually. Otherwise, it’s likely a free credit report scam you’re looking at. Space out your free credit reports every 4 months to consistently check for discrepancies.

Have a happy and prosperous New Year!

10 FREE Financial Services to Help you DOMINATE your Financial New Year’s Resolutions is copyrighted by 20somethingfinance.com without consent to republish.

American Work-Life Balance

• According to the Center for American Progress on the topic of work and family life balance, “in 1960, only 20 percent of mothers worked. Today, 70 percent of American children live in households where all adults are employed.” I don’t care who stays home and who works in terms of gender (work opportunity equality for all – it’s a family choice). Either way, when all adults are working (single or with a partner), that’s a huge hit to the American family and free-time in the American household.
• The U.S. is the ONLY country in the Americas without a national paid parental leave benefit. The average is over 12 weeks of paid leave anywhere other than Europe and over 20 weeks in Europe.
• Zero industrialized nations are without a mandatory option for new parents to take parental leave. That is, except for the United States.

American Average Work Hours:

• At least 134 countries have laws setting the maximum length of the work week; the U.S. does not.
• In the U.S., 85.8 percent of males and 66.5 percent of females work more than 40 hours per week.
• According to the ILO, “Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and 499 more hours per year than French workers.”
• Using data by the U.S. BLS, the average productivity per American worker has increased 400% since 1950. One way to look at that is that it should only take one-quarter the work hours, or 11 hours per week, to afford the same standard of living as a worker in 1950 (or our standard of living should be 4 times higher). Is that the case? Obviously not. Someone is profiting, it’s just not the average American worker.

American Paid Vacation Time & Sick Time:

• There is not a federal law requiring paid sick days in the United States.
• The U.S. remains the only industrialized country in the world that has no legally mandated annual leave.
• In every country included except Canada and Japan (and the U.S., which averages 13 days/per year), workers get at least 20 paid vacation days.  In France and Finland, they get 30 – an entire month off, paid, every year.
• Then there’s this depressing graph on average paid vacation time in industrialized countries:

The Impact of Too Much Work

I’m not telling you to work less hours. If you genuinely love what you do and are doing it for the right reasons, you are more than entitled to spend all of your waking hours plugging away.

But for many of us, more work leads to more stress and a lower quality of life. Without time to unwind, take care of your home, spend time with loved ones, enjoy our hobbies, connect with friends, and generally live a more balanced life. Stress is the #1 cause of health problems – mentally and physically. And there are few things that stress us out on a consistent basis like work does, especially when it takes away from all of the other things that life has to offer.

Americans are the Outliers

And if all of this data tells anything, it’s that we are the outliers, not the norm. Why are we the outliers?

• Our companies fairly ruthlessly let people go. We want to keep our jobs and not be a ‘low performer’ compared to others.
• The decline of the union has led to less paid time off and other leave benefits.
• Cultural value of money over everything else. We love money, we want more of it, and we think money can buy happiness. And the more we work, the more we get paid.
• It’s been drilled in our heads that we are lazy compared to emerging market counterpart workers in India, Mexico, China, and other parts of Asia. Who isn’t? And what is our mental image of the work environments in those locales? To validate those fears, our jobs are being outsourced to the cheap labor in those countries. In reality, the U.S. is still the world leader in productivity per person.
• Our legislative branch of the government (on both sides of the aisle) has been bought and as a result has shied away from passing laws that protect workers that every other industrialized nation has passed.
• We generally don’t fight for our working rights. We take what is given to us.

What we All Need to Remember

What we all need to remind ourselves is that it doesn’t have to be this way.

• It’s OK to ask to move to fewer hours at work.
• It’s OK to take a week-long vacation if we need to.
• It’s OK to ask to work from home.
• It’s OK to take a month of unpaid leave while you raise a child.
• It’s OK… you get the idea.

Don’t let life pass you by in the name of fear, circumstance, greed, or misguided hopes. Sometimes you just need to draw a line in the sand and say “enough is enough”.

Overworked Discussion:

• Do you think we work too hard?
• Do you like the cultural norm around your workplace on working hour expectations?
• How have you been able to limit unhealthy overworking habits?

Related Posts:

• 5 Ways to Recession Proof Yourself
• How to Calculate your Real Hourly Wage
• Should you Tell your Employer you are Changing Careers?

The U.S. is the Most Overworked Developed Nation in the World – When do we Draw the Line? is copyrighted by 20somethingfinance.com without consent to republish.

It’s your birthday. And damn it, you deserve to eat and drink for free – and lots of it! Depending on your tastes and how recently you had a coronary, you can pretty much eat your way through your special day without paying a cent.

Remember when you simply had to walk in to a restaurant and tell them it was your birthday? No need for a license, and certainly no need to sign up for anything with your email address.

Those days are over, but you can still get disgustingly sick on your birthday from over-indulging on free food and drinks. And that’s an American past-time that will never go away. What I’m introducing to you today is the Birthday Glutton Marathon Challenge! Armed with a spam email address you can make a damn pig of yourself for free (and take another year off your lifespan in the process). Here’s how to do it.

7:00 AM – You have to start off your big day with a free birthday breakfast right?

• Denny’s: Denny’s is offering up a free Grand Slam breakfast on your birthday. It appears that no email signup is necessary. Just show up with your license at hand.

8:30 AM – Breakfast was food. Now, why not enjoy a free birthday beverage (or two) to finish it off?

• Starbucks: Join Starbucks rewards and get a free complimentary beverage on your birthday.
• Dunkin Donuts: Sign up for Dunkin’ Perks and get a free medium beverage, plus another on your birthday.

9:30 AM – Time for a pit stop and a breather.

12:00 PM – Time to hit the road again. It’s free birthday lunch time!

• Red Robin: Join e-club and get a free burger on your birthday.
• Ruby Tuesday: Join the birthday club and get a free burger on your birthday

Burgers don’t meet your fancy? How about Mexican?

• QDoba: Join the E-Club and get a free burrito on your birthday. Additionally, you get free chips and salsa, just for signing up.

2:00 PM – Not feeling so good. It’s time for a nap.

3:00 – 7:00 PM – Wake up and feel regret.

7:00 PM – It’s free birthday dinner time!

• Houlihans: Sign-up and get a free appetizer for joining plus a free entree on your birthday. Not bad!

Just one dinner on your birthday is for the weak.

• Benihana: Sign up for the Chef’s table email club and get a $30 birthday certificate every year.

9:00 PM – What would a birthday be without a free heart suffocating dessert!

• Coldstone Creamery: Join the birthday club and get free ice cream on your birthday.

But one dessert on your birthday is never enough!

• Baskin Robbins: Get a free scoop of ice cream when you join the birthday club.

Are you tough enough for the the Birthday Glutton Marathon Challenge? Challenge your friends and family who have upcoming birthdays!

Related Posts:

• 10 Food Rules to Save you Money & Improve your Health
• 10 Tips to Cut the Cost of Dining Out at Restaurants
• 4 Tips to Saving Money on Groceries

10 Free Birthday Meals is copyrighted by 20somethingfinance.com without consent to republish.