If you use your car for business, I've got some good news and some bad news. The good news is that the IRS has once again raised the mileage allowance for auto transportation.

Here are the new rates, effective for the entire 1980 tax year: 20 cents a mile for the first 15,000 miles (up from 18.5 cents in 1979), plus 11 cents (raised from 10 cents) for each mile over 15,000.

The bad news: Even the new rates are still quite low when compared with the actual total cost of operating your car. You may find it pays to itemize the actual costs instead of taking the standard mileage rate.

Remember that regardless of which method you use, you can add tolls and parking fees to the total.

The mileage allowance for medical travel, use of your car for charitable purposes and for calculating moving expenses also has been increased, from last year's eight cents to nine cents a mile.

Question: Some weeks ago you explained how to figure out how much insurance a person should have. How about the other side of the coin -- figuring out how much insurance I can afford?

Answer: There are no rules for deciding how much life insurance you can afford. It's usually a personal decision related more to your lifestyle than to your income.

Everyone should know what his or her essential living expenses are and how much disposable income is available.

If you don't know, sit down and make a list of fixed expenses such as food, clothing, transportation, medical care, etc. It's a good idea to refine those estimated by keeping track of all your expenses for a period of at least several months.

The next step is to find out the premium cost for the amount and the type of insurance you have determined you should have.

Now take a look at the numbers you have come up with. If you have enough disposable income (free cash after essential expenses) to cover the insurance cost as well as everything else you would like to do, you have no problem.

But if, like most of us, your disposable funds won't stretch for the whole package, then you have to make choices. It simply boils down to whether you're willing to pass up the week in Ocean City, or the Tuesday night bowling session, or the season tickets to the symphony to provide the cash for the insurance premium.

I could write thousands of words about the importance of having adequate insurance and explaining why you should earmark a percentage of your income for premium payments.

But it would be wasted effort unless you're willing to make the hard choice to divert to the payment of insurance premiums the dollars you were going to spend on something else.

If it turns out that you simply don't have enough money, or if you choose not to spend it on insurance, then you will have to lower your sights and settle for less coverage.

Before you do that, however, do a little comparison shopping. Life insurance is a consumer product sold in a highly competitive market; don't assume that all policies or all companies are alike.

Generally, term insurance will give you the largest amount of pure insurance protection for the smallest premium cost. But whole life may have a place in your eventual total program, so if you buy term insurance you should be sure the policy is convertible.

That simply means that you have the right to convert the term policy to an equivalent whole-life policy any time before the expiration date -- even if a change in your physical condition has made you otherwise uninsurable.

If you do have to compromise and live with less insurance than you figure you need, don't lose sight of your original estimate. Try to reach that goal as soon as possible.

Assuming you don't have a substantial package of accumulated assets to leave behind, your life insurance represents the major part of your estate. It is the source of the financial protection your family will need in the event of your unexpected and premature death.

Tax calendar: Next Monday (Sept. 15) is the due date for the third quarterly payment on your estimated federal income tax. Payments on Maryland, Virginia, and D.C. estimates also are due on that date.