(MONEY Magazine) – Q My husband, our two kids and I are planning a trip to Scandinavia. Our friends have told us that we can save money by buying a car in Europe and shipping it back to the U.S. We're talking about getting a Volvo 850 GTA with automatic transmission. Would we really save on the deal? Bettye Epstein SHERMAN, CONN. A As my Swedish friends used to say when I was growing up in Minneapolis, "Yumpin' Yiminy!" You can cut about 10% off the cost of the car, says Jerry Cheske of the American Automobile Association, and the numbers bear him out. If you buy a Volvo 850 GTA at your local dealer, you might haggle the price down to around $25,000 or so. The same car in Europe would cost $22,830 (including shipping) if you picked it up at Volvo's Gothenburg, Sweden factory because you will avoid dealer and handling expenses. Along with at least $2,170 in savings, you'd get little extras, such as a tour of the plant and a spin around its test track. Now here's the best part. If you buy the car at the start of your vacation, you will also pocket the $1,250 or so it would cost to rent a Volvo or similar large car in Europe for two weeks. So you end up with a net savings of $3,420. Other European car makers, including BMW, Mercedes and Saab, have similar buy-abroad programs. But in all cases you have to initiate the purchase with your dealer here in the U.S. Do this four to 16 weeks before you depart, since the model that you want may not always be available. Make sure that the car is "U.S. spec" (that is, built to our safety standards) and that your manufacturer participates in a program letting foreign car makers certify that a vehicle has passed all U.S. environmental and safety tests before it's shipped. That way, when your personal import lands on this side of the pond, you can just pick it up and drive it home.

Q Almost three years ago, when I was 20, I asked you whether I should buy a $24,000 sports car. I followed your advice and purchased a jalopy for $325 that is still going strong. Now I need help again. I just won a dilapidated single-family house for $250 in a city lottery. But after paying for renovations, insurance, and utilities, I estimate that my current monthly living expenses of $800 will climb to $1,200. My job teaching seventh-grade English pays $25,000 but has no retirement savings plan, and I have just $1,000 in a savings account. Before I bought the house, I could save $300 a month; now I'll need an extra job to do that. How can I survive and establish a nest egg? Sonja D. Jones WASHINGTON, D.C. A First, congratulations. Your new house may be a wreck, but as you fix it up and its value rises, it should provide an important source of equity -- especially given what you paid for it! Still, you'll have to exercise tremendous self-discipline to avoid winding up living in that jalopy. After paying taxes and Social Security, that $25,000 salary of yours turns into about $1,670 a month. (It looks like the all-noodle diet for you!) For starters, you need another $2,000 in savings just to cover moving expenses. You don't necessarily have to take a second job, but you should try to make some extra money through occasional moonlighting, such as tutoring. Karen Kabarec, a Palatine, Ill. financial planner, advises not taking any chances with your tiny savings; keep it in your bank account or switch to a money-market fund. Both now yield around 3.7%. Once you've moved, focus on building up an emergency fund equal to three to six months' expenses, or roughly $5,000. (Didn't I tell you this last time?) That too should be stashed in a bank account or money fund where your principal won't be at risk. Finally, as your pay rises, try to get back to saving $300 a month again -- in a conservative stock mutual fund -- for your retirement, perhaps in that very $250 house that over the years you'll have slowly renovated into a showcase. Q I would like to lend $10,000 to my mother-in-law for improvements on her home. This loan would be repaid from her estate after she dies. I want to charge her the lowest interest rate allowable without running afoul of the Internal Revenue Service. I understand that the IRS sets a minimum for what you must charge, the applicable federal rate, which fluctuates monthly. Must my loan be a variable-rate loan to match the AFR rate,or can I charge my mother-in-law a fixed rate of interest? Ted Stevens EUGENE, ORE. A You're in luck. If your loan is less than $10,000 by so much as one cent (and never exceeds $10,000 for the life of the loan), you don't have to charge your mom-in-law any interest at all. As far as the IRS is concerned, the dough could be construed as a "gift" -- even if she repays you -- and any "gift" worth $10,000 or less is tax-free. If she needs a little more than that, you and your wife could each lend her as much as $10,000 and still ignore those tiresome AFR thingums. Just make sure that your in-law and you sign an agreement that the principal will be repaid from the sale of the house or other assets after her untimely adieu. Then, your wife's siblings will have no legal right to rain curses upon your head when you collect what's owed you from the estate. Now just for the sake of argument and to help even more generous sons-in- law, let's assume you and your wife want to lend her mom $100,000. In that case, yes, you could charge her a .xed rate of interest, but it would have to be the AFR at the time you make the loan. The IRS publishes its rates in its monthly bulletin (ask your accountant for a copy) and tells which ones apply to short-term (less than three years), mid-term (three to nine years) and long-term loans (more than nine years). Although the short-term rate is the lowest -- recently 5.48% -- I think it would be most impolitic to suggest the dear lady repay you that quickly. I'd go with the long-term rate: 7.38% in June.