The 2 costs that can make or break your nest egg

If you earn a decent income but have trouble saving, the culprits could be the roof over your head and the car in your driveway.

Retirement savers who contribute more to their 401(k)s often spend less on housing and transportation than their peers, according to a study by the Employee Benefit Research Institute and J.P. Morgan Asset Management.

Better savers also spend less on food and drink, but housing and transportation are bigger expenses that tend to be less flexible. Once you commit to a place to live and a car payment, you’re typically stuck with those expenses for a while.

In my latest for the Associated Press, how your house and your car could be affecting your retirement savings.

Friday’s need-to-know money news

The hackerThe best way to invest your first $1000, the pros and cons of living on cash, and what’s covered by identity theft insurance.

How to Invest Your First $1,000
The road to investment success has to begin somewhere.

4 Tips Before Buying Your Teenager a Car
Laying down the rules of the road before they get behind the wheel.

What I Learned From Living on Cash
Could you survive the Cash Challenge?

Will ID Theft Insurance Shield You From Fraud?
What is and isn’t covered by identity theft insurance.

Trick Yourself Into Boosting 401(k) Contributions
The simple trick that could increase your 401(k) contribution.

The best used cars, from Edmunds.com

If you’re in the market to replace a vehicle, check out Edmunds.com’s list of 2012 Used Car Best Bets, which include:

Compact Sedan: 2005-2010 Hyundai Elantra
Midsize Sedan: 2005-2010 Nissan Altima

Large Sedan: 2006-2010 Hyundai Azera
Coupe: 2005-2010 BMW 3 Series
Convertible:
2005-2010 Mazda Miata
Wagon:
2005-2010 Pontiac Vibe
Compact SUV/Crossover:
2005-2010 Honda CR-V
Midsize SUV/Crossover:
2005-2010 Ford Explorer
Large SUV/Crossover:
2005-2010 Chevrolet Tahoe
Minivan/Van:
2005-2010 Honda Odyssey
Compact Truck:
2005-2010 Toyota Tacoma
Large Truck:
2005-2010 Ford F-150
Luxury:
2005-2010 Infiniti G35/G37
Hybrid:
2005-2010 Toyota Prius

Sport Compact: 2005-2010 Subaru Impreza WRX

Edmunds.com editors picked the cars based on reliability, safety, value and availability. The editors considered cars that were two to seven years old, which is pretty much the sweet spot for used car purchases.

Since all cars are used cars as soon as you drive them off the lot, you might as well let someone else take the depreciation hit. You can tens of thousands of dollars over your driving lifetime by buying slightly used cars. Save even more by paying cash and keeping them for 10 years or so.

For more details on Edmunds.com’s list, visit http://www.edmunds.com/car-reviews/best-used-cars.html.

Which cars retain their value the best?

If you buy cars and then drive them until the wheels practically fall off–as I usually do–then you don’t need to worry much about “retained value.” You can take pride in squeezing all the value out of your vehicle before it’s hauled off to the dump. If you plan to trade in a car at some point, though, it can make sense to pay attention to how well the value of that make and model holds up over time.

Edmunds.com just released its 2012 Best Retained Value Awards, to single out the cars that depreciate less over time. Honda and Acura are the top brands, while Ford had the most model-level awards. You can see the complete list, complete with runners-up, here.