Fact or Myth? Vol. 2

Are you ready for this week’s Fact or Myth post? I am!  Each week, I’ll focus on some common beliefs about saving/spending money and we’ll find out if they are fact or myth. I’ve found that there are a lot of common misconceptions about saving money. Nothing that will drain your wallet faster than falling into a trap. So, I’d like to clear up some of these myths and get to the truth behind them. Do have your own fact or myth questions? Feel free to email me (or post them in the comments) and I’ll feature them in a later volume and fill you in on whether they are fact or myth. Here we go with this week’s questions:

(These  two questions are from Marjorie as posted in last week’s comments)

Question #1: Putting your car in neutral while stopped for a long red light saves gas – FACT!  Think about it this way – if you’re not moving but your engine is running, you’re getting zero miles per gallon.  Idling at a traffic light is a gas guzzler.  Putting your engine in neutral calm down the engine and drops the rpm.  Keeping the car in drive  drains fuel, but in neutral, the transmission is resting which saves gas. Great news!  I’ll definitely do this from now on.

Question #2: Slow starts and stops save gas – FACT!  Coasting to a stop will save the gasoline you would otherwise use maintaining your speed longer.  Additionally, taking off slowly from a full stop will also significantly increase your gas mileage.

And now on to my own question:

Question #3: Renting is like throwing money away – MYTH!  I was the biggest believer in this myth when I was renting.  Each month, it felt like I was tossing a huge chunk of my paycheck down the drain.  According to Dave Ramsey author of Total Money Makeover, however, believes that renting isn’t such a bad option.  He gives a few reasons.  For one, renters avoid hidden costs for repairs and maintenance, since these repairs are included in their rent.  If you owned your own home, these costs would come out of pocket.  Also, Ramsey suggests  waiting until you can pay cash for the whole house (I wish!).  Although this is the most financially sound option, Ramsey says that you should at least wait until you are financially stable to buy a home.  Renting in the meantime allows you to do so.