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Shelley Marsh

From Little Things Big Things Grow

As the song says “from little things big things grow”. I kinda already knew it and I teach it in my classes every week, especially in relation to saving. However, it hit home last week when we rocked into the bank with this inconspicuous bucket of small change. Granted, it was heavy.  All silver, 20c, 10c and 5c only.  All the good coins had been spent a long, long time ago.

How much is this bucket of coins worth?

How much is this bucket of coins worth?

It doesn’t look like much does it?  How much do you think it was worth? On the way to the bank the hubster and I speculated about how much we thought it was worth. We both concluded that it would only probably add up to $20 or so. In our view $35 was the absolute max.  I was so confident in my prediction that I stupidly said to Miss Money that she could have the money to spend on school supplies as she embarks on her first year of primary school in a couple of days.

Into the coin machine they go......

Into the coin machine they go……

How wrong we all were!! As we poured the money into the counting machine it became abundantly clear that we were way off. In fact the 20c pieces in the green bag on their own were worth $40!!!!! We quickly passed $60, then $80, then the grand total……….

The grand total

The grand total!!!! $133.30!!!

Yep, you read it correctly, $133.30!!!!!!!!!! Insane!!!!! Who knew that a pile of small coins could be worth that much!!! Of course I had to do a mummy dodgy on the promise of school supplies and gave her $26 instead…… she was so excited by the process she didn’t even notice!!! Whew!!! So when saving seems too hard, why not start with those 5c and 10c pieces – they really add up!!!

Do you save small change? Have you ever been surprised by how much it turned out to be?

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30/01/2016 8 comments
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Unusual Ways To Save Money

As most of you know I have a part time job teaching social workers about money so they can then help their clients.  It is a fantastic job for someone like me who loves talking and writing about money!  I love teaching the course because every time without fail I learn something new from my class that I can then think about using in my life or share with you all.  What I find fascinating about personal finance is that there is not a ‘one size fits all’ answer or only one way to achieve a goal, there are different ways that suit different people.  Believe it or not some of the most diverse answers come when we talk about different ways to save money….. so here are some of the most unusual ones I have heard lately.

  1. Cold Hard!
    Yep – you read it correctly when I asked one of my classes the other day how they saved money one lady piped up and said “I have cold hard!”…. “er pardon” was my reply.  I certainly hadn’t heard that one before and my mind boggled as to what that could be!  As she went on to explain that she saves her money as soon as she gets paid putting a set amount of cash in a plastic zip lock bag and putting it in her freezer!!!!  Between the meat and the peas apparently!!!!  She also went on to explain that putting the money into her freezer means that she won’t touch it, whereas if it is in a bank account she will.  She has used this strategy to save for a solar hot water system and is currently saving for a cruise!!!  Obviously this one is not great if you get robbed and the robbers are hungry!!!  But still, I was impressed with her ingenuity!
  2. Coke bottle anyone?
    Apparently an empty 600ml bottle of Coke can hold close to $800 worth of coins, according to one guy from my class.  It is often touted on the internet to be $1,000 but my participants claim that is not true and it is more like $800 (what?! something on the internet that is not true!!!).  Being a closet Coke drinker I am keen to give this one a go myself.  I think it is a great way to save for Christmas!!!
  3. Don’t claim the tax free threshold
    When you get a job, you fill in a form which asks whether you want to claim the tax free threshold.  Australian residents for tax purposes are entitled to an $18,200 tax free threshold  If you select ‘no’ on the ATO form and don’t claim the tax free threshold, you are taxed on that first $18,200. It means you are paying tax on a sum of money, at your regular tax rate, even though you don’t need to.  As a result you will overpay tax and get a tax refund at the end of the financial year.
  4. Over-pay your rent
    This is another popular one especially to pay for Christmas.  Often paying more on your rent means you can have a month off at the end of the year to pay for Christmas.

Saving is a really individual thing, but when you get something that works for you – stick with it.

What is your unusual saving tip?

If you liked this post you might also like:

Home & Contents Insurance: How Do You Know If You Have Enough?

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If you would like to read more from me don’t forget to sign up to my weekly email using the form below:




Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances.

24/07/2015 5 comments
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2015 Federal Budget

Despite being tamer than last year, the 2015 was a real mixed bag for families.  If all the measures pass the Senate some families will be better off others worse off.  So here are the 5 main proposed budget changes that you really need to know about.!

(1) If you have a child in childcare – there are big changes you need to know about.

From 1 July 2017, a new Jobs for Families childcare package is expected to come online and replace the Child Care Benefit and Child Care Rebate with a single child care subsidy.  This subsidy will be paid directly to child care providers, reducing upfront fees.

The government estimates that the changes will save working families $30 per week on average.  Families with an income of under $65,000 per year are guaranteed a minimum of 12 hours subsidised child care per week with 85% of their child care costs covered, up to an hourly cap. The subsidy gradually tapers to 50 per cent for families earning around $170,000 or more.  There will be no annual cap for families earning less than around $185,000.  Families earning around $185,000 or more will have a $10,000 annual cap on the total amount of assistance provided per child per year. This is $2,500 more than the current Child Care Rebate annual cap per child.

However, the catch is that the amount of subsidy that each family receives is going to be subject to an “activity test” that is tied to the amount of paid work, study or volunteering that the primary carer does.  The primary carer must perform a minimum of eight hours work or study per fortnight to receive any child care support.  The more hours worked the higher the subsidy will be.

Given the above “activity” test the big losers from this reform are families with a stay at home parent.  If their family income is between $65,000 to $170,000 per year income bracket will lose the Child Care Benefit that they are currently entitled to, with no compensation under the new system. These families will have to pay the full cost of child care without any government subsidy

(2) There will be a limited nanny trial

If you have a combined income of less than $250,000 and find it difficult to access mainstream childcare services – because you would shift work, or are in a rural or remote area or are a parent of a child with special needs – you will be eligible to use your childcare subsidies on in-home nannies. Payments will be paid directly to the childcare provider.

(3) If you receive Family Tax Benefit payments there are several changes you need to know…

As of July 1, families where one parent earns more than $100,000 will no longer be eligible for Family Tax Benefit B.   This is one of the few changes from last year’s budget that has actually passed the Senate.

However, to fund the new childcare measures the government is looking to enact some other changes including:

  • Restricting the Family Tax Benefit B to families with children under six.  To help single-parent families receiving Family Tax Benefit A and no longer eligible for Family Tax Benefit B there will be an additional annual payment of $750 for each child aged between six and 12.
  • Freezing the indexation on both the Family Tax Benefit A and B for two years ie. the benefit won’t go up with inflation.
  • Also the large family supplement which is paid to those with 4 or more children will be cancelled.

(4) If you’re planning to have a baby… you could be worse off than under the current system.

If you receive paid parental leave through your employer you will no longer be eligible to receive the government funded scheme which is worth a maximum of $11,538.90.

(5) If you run a small business you could be a big beneficiary.

The government has announced a $20,000 limit for immediate asset write-offs for small businesses with annual turnover less than $2 million from 1 July 2015.

Lots of these measures will have to pass the hostile senate and as we know now, lots of the things that were announced in last year’s budget simply did not make it through.  So, what the budget actually means for families could be completely different story when the political process is finished, so I will let you know how actually things go!!!

If you liked this you might also like:

Simple Savings Ideas That Absolutely Everyone Can Use

5 Websites That Will Help You Make Or Save Money

How To Pay Off Your Mortgage Faster

5 Financial Tips You Need To Know Now You Are A Parent

If you would like to read more from me don’t forget to sign up to my weekly email using the form below:



Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

 

 

21/05/2015 7 comments
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I really enjoy blogging.  Not only does it give me the ability to interact and share my knowledge with my incredible readers (yes, you!!), it also at times throws up at times some pretty amazing opportunities. A couple of weeks ago one of these astounding opportunities hit my email inbox. It was an email from Holly Wainwright Editor of Mamamia!!! Yes the Mamamia, Australia’s premier website for women!!! Holly said that she had read my blog and was wondering if I would be interested in joining her and Andrew Daddo discuss pocket money on Mamamia’s popular parenting podcast “This Glorious Mess”.

“YES!!!” was my swift response!! Let’s face it, no one wants to reject the opportunity to be in the same room as a Daddo!!! 🙂  So before I knew it I found myself in a recording studio chatting pocket money with Holly and Andrew!!! It was an amazing experience.  I was super nervous and it was waaaaaayyyyyyyyy out of my comfort zone but Holly and Andrew made it heaps of fun!

So without further ado here is episode 6 of the pod cast of “This Glorious Mess” with Holly Wainwright, Andrew Daddo and myself talking pocket money!!! (I am in the middle after their chat about Mothers day 🙂

Click here to hear me on “This Glorious Mess” talking pocket money.

Oh and the pic above is the obligatory selfie of the three of us in the studio!

Have a great day!

 

Shelley

If you liked this you might also like:

Simple Savings Ideas That Absolutely Everyone Can Use

5 Websites That Will Help You Make Or Save Money

How To Pay Off Your Mortgage Faster

5 Financial Tips You Need To Know Now You Are A Parent

If you would like to read more from me don’t forget to sign up to my weekly email using the form below:



Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

10/05/2015 6 comments
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Interest rate cut

So this week the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points to new all time lows of 2.00%. Wooohooooo!!!! This is great news for those of us with mortgages. Provided the banks pass on the full cut, it is expected that the 25bp cut would save around $45 per month on a home loan of $300,000. So the big question is what should you do with the extra cash that you will have post the cut?

  1. Spend it
    This is one option and it is certainly what the Reserve Bank (RBA) would like us all to do. The whole reason the RBA are cutting rates to put more money in our pockets so we will spend it. This helps the economy as roughly 70% of the economy is consumption – you and me spending. The more we spend (up to a certain point) the better the economy goes.
  2. Pay off other debts
    If you have other debts that have high interest rates like credit cards or personal loans then it pays to get rid of these debts as fast as you can. Putting the extra money you gain from the interest rate cut onto your credit card could save you 20% or more (depending on your interest rate) on each $1 of debt paid off, a great return!
  3. Keep your mortgage repayments the same and pay off your mortgage faster
    The benefit of doing this is that not only do you pay off your mortgage faster but when interest rates eventually rise you will be protected as you are already paying off a higher rate anyway. In order for this strategy to work you need to be already managing ok with your mortgage repayment at the higher previous level.
  4. Put the extra into your emergency fund
    An emergency fund helps to deal with any bumps in the road that life might bring like losing your job or unexpected expenses. You should aim to have at least six months of expenses saved. Adding to your emergency fund always helps to build that buffer for when the unexpected occurs.
  5. Consider putting extra money into your superannuation
    Lot’s of factors are important when deciding whether add money to your superannuation. Make sure you get some good financial advice, specific to your circumstances.

So of all the options outlined above Mr Money and I have decided to keep our mortgage repayments the same and reduce our mortgage even faster. Actually, we have decided to do this for this cut and the previous one. I guesstimate (using a mortgage calculator ) that just by keeping our repayments the same amount as prior to the last two cuts we cut around 2 years and 11 months off our mortgage and save us around $20,000 in interest over the life of the loan if interest rates stay at this level. Whoooppppeee!!!

What have you decided to do with your mortgage rate cut?

If you liked this you might also like:

15 Ways To Save Money In 2015

How to Pay Off Your Mortgage Faster

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How Much Your Credit Card Debt Is Really Costing You

5 Websites That Will Make Or Save You Money

If you would like to read more from me don’t forget to sign up to my weekly email using the form below:



Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances.

05/05/2015 5 comments
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Living On One Income

We have spent big chunks of the last four years since our daughter was born living on one income.  Some of it was voluntarily, like the twelve months maternity leave I took after she was born.  Some of it was involuntary, like the two redundancies that followed soon after that: one for me, then once I got a part time job; one for my hubby!  Go figure!  I joke that we are not meant to have two incomes in our household, or so it seems!  Living on one income can be tough.  Really hard given the cost of living in Australia is so high and the cost of housing, well don’t get me started on that one.  However, living on one income can be done, and here are some tips to help you through.

Check out what Centrelink benefits you qualify for

Going from two incomes to one income, could mean that you might qualify for more assistance from the government than you could access previously. When my husband was made redundant and with me only working three days a week, we all of a sudden qualified for the Family Tax benefit A & B and the Childcare benefit (the means tested one).  Check out the Centrelink payment finder here, which will give you some guidance as to what centrelink payments you might qualify for.  Getting these extra payments have definitely helped.

Create a budget

If you haven’t done one, click here and see how to. Making one income stretch further is a lot easier if you use a budget.  Some people see a budget as something terrible, akin to a diet.  I prefer to think of it as a spending plan, making sure each dollar goes to our highest priorities and makes sure we get the best value for every dollar we spend.  I use the awesome free budget planner from the MoneySmart website.  Click here to check it out.

Check your spending leaks

Checking your spending leaks can also help you identify places where you can easily save money. All you have to do is to think of two things that you spend money on regularly, be it daily, weekly or monthly.  It could be a daily takeaway coffee, or weekly takeaway or monthly magazine subscriptions.  Next add up how much one of these things cost you over a month, then a year.  Now, think about how you could do that spending differently – be it bringing your lunch to work or cutting down from a large coffee to a smaller one, or buying from a cheaper supplier.  Remember, doing things differently does not have to mean that you cut things out entirely, unless you are highly motivated to do so!!  🙂 See how much this new way of doing things would cost you over a month and then a year.  Now, all you have to do is look at the difference between the two figures, how much it cost you per year using your old way versus the cost of the new way.  This is how much you could save by changing your spending behavior.  In my case I calculated I could save $2,184 simply by bringing my lunch to work and making my own hot chocolate in the office.  A huge figure, especially given I only work 3 days per week!

Meal Plan

Before the hubster was made redundant I used to meal plan for the week. So sit down usually on a Saturday and figure out everything we needed for a week of meals, create a list and purchase it all on the Sunday.  It was fab because I knew what we were having on each day and already had the ingredients ready to roll.  It prevented any random trips to the shops where I might bring home a few extras, shall we say.  At the moment our system is a bit out of whack.  My hubby does the meal plans for the 3 days I am at work (I don’t want to get in the way of him making dinner :-)) and I do the rest.  It still works fine and overall substantially cuts our food bill by at a guess at least 20%.

Compare, compare, compare….

On all your major expenses do a ring around or use online comparison sites to make sure you are getting the best deal. From your insurance to your telephone bill and everything in between make sure that you have got the best service to meet the needs of your family at the best available price.  I try to do the ring around once a year on all my services to make sure I am getting the best deal, and it can really make a big difference to your budget.  For example, by changing electricity provider I have saved $400 off my winter electricity bill, absolutely worth the two hours of leg-work it took for me to figure it all out.

Living on one income is difficult but it is achievable.  I hope my tips will make it easier for you and your family.

What are your tips for living on a single income?

If you liked this post you might also like

How I saved On My Electricity Bill

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If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:




Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances

 

 

23/04/2015 15 comments
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Interest free deals

Have you ever wondered how interest free deals work?  On the surface they all sound pretty attractive, who doesn’t want to get what they want now and pay it off interest free over 1, 2 or even 4 years?  Maybe you think it sounds too good to be true?  Well, here are some of the things you should know when considering one of these deals:

  1. Using one of these deals will most likely reduce your ability to negotiate.
    Cash is king when buying big ticket items, generally speaking retailers will not negotiate once they know you require finance. Taking up one of these deals might push you to spend more than you initially expect.
  2. Quite often interest free deals are not available on the cheapest products in each range, this means you might have to end up spending more than you initially thought.
  3. Interest free doesn’t mean fee free. Yes it is true that you are not paying interest for 1, 2 or 4 years on your purchase but you are paying fees and these can add up.  For example, currently advertised is a Harvey Norman 2 year interest free deal. This deal has a $25 establishment fee and $4.95 per month account keeping fee.  On a $500 loan that adds up to $143.80 in fees over the life of the loan or approximately 28% of the initial value of the loan.  On top of that, if you miss a repayment, you will be hit by a $25 late payment fee.
  4. Depending on your deal, your repayments during the period might not pay off the total loan by the time the interest free period ends.  Interest free deals can be structured in several different ways, with a few different parts. Some require a deposit, some don’t.  Some have a minimum monthly repayment, some are equal installments, some require no repayments during the period at all.  Make sure you understand which deal you are signing up for and exactly how it works.  Be warned!  Deals that involve a ‘minimum’ monthly repayment, do not see the whole balance of the loan paid off in full by the time the interest free deal ends.  If you have a remaining balance once the interest free period ends you will be hit with a high interest rate.  Usually around 29%.  To avoid this, instead of making the minimum repayment, calculate how much you need to repay to clear the entire balance and repay that higher amount each month.  For example if you have borrowed $500 over 24 months you need to repay $20.83 per month rather than the much lower minimum payment on your bill, to make sure the balance is cleared by the time the interest free period ends.

We have never tried an interest free deal.  We tend to like to be able to shop around and get the best deal possible on the product we have done our research on.  However, I have had friends who have done interest free deals and have been very happy with the outcome.  So if you are considering one of these deals make sure you understand exactly how the loan works and make sure you stick to the rules otherwise these deals can be costly.  Also watch the fees as these soon add up!

Have you tried an interest free deal?  Were you happy with the outcome?

If you liked this, try:

How To Create A Household Budget

5 Websites That Will Make or Save You Money

How I Saved On My Electricity Bill

Where To Get Financial Help For Free

15 Ways To Save Money In 2015

If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:




Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances

09/04/2015 7 comments
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Save holiday USA

You might have been wondering why things have been a little quiet on the Money Mummy post front over the last few weeks.  Well, the Money Mummy clan have been having a holiday in United States of America!!!  We spent most of our time in California including a trip to Disneyland which we all LOVED, but also popped over to New York and Washington to check them out and experience what it is like to be a tourist in minus 12 degrees!!!!! Yes we were there for New York’s coldest day in 50 years and it was FREEZING!!!  Mind you, our daughter loved the snow!  I have to hand it to the Americans you think that you know them because we see their TV, movies and their news but it is a far more diverse and interesting country than I gave them credit for and we had an absolutely fantastic time there.

-12 degrees!!!  Do I look cold to you?

-12 degrees!!! Do I look cold to you?

 

So if you are thinking of heading over to the US here are some of the ways we made our trip happen without breaking the bank (too much) 🙂 .

  1. Go in winter

    Winter?  What winter?  We spent most of our time in California where we discovered their reputation for amazing weather was well deserved.  Most days were around 23-25 degrees and we didn’t have any rain at all.  Ok, granted that California currently has a drought which is not great, but it did mean that weather wise we had an amazing trip.  Also the best part about travelling in winter was the lack of queues when you go to the attractions.  We spent four days in Disneyland and the most amount of time we spent in a queue was to meet Elsa and Anna from Frozen and even then it was only a 45 minute wait!!!  For most of the rides we either walked straight on or waited for a maximum of 10 minutes!!  It was fantastic.

    Little Miss Money meets the 'real' Elsa and Anna

    Little Miss Money meets the ‘real’ Elsa and Anna

  2. Use a travel agent

    We used a travel agent for a decent chunk of our travel.  He saved us a fair bit of money by convincing us to stay in a couple of hotels that we would have never picked ourselves and an airline we generally wouldn’t fly.  We stayed at the Hyatt Orange County when visiting Disneyland which got us a two bedroom suite for approximately $200 per night (my sister was staying with us) as opposed to $350 per night per room for the cheapest Disney hotel.  He also got us a great deal on “Bertha” our rent a car which I could never have got on my own.

    'Bertha' and the family at one of our many unusual road side stops

    ‘Bertha’ and the family at one of our many unusual road side stops

  3. Don’t use a travel agent

    Ok so I just contradicted myself but for some of the things we found it was far cheaper to book them ourselves.  The agent wanted to charge us $130 Australian dollars for a car to take us from the airport to our hotel.  We decided to catch a cab ourselves and it cost us about $60 Australian dollars.  We also used trip advisor to find some offbeat hotels which had kitchen facilities which saved us the cost of quite a few burger meal deals :-).

  4. Don’t be afraid to stay at cheaper hotels

    We found the standard of hotels to be pretty good in the US and there was a lot of choice.  In Las Vegas we stayed at the Excalibur which looks like a castle for $65 Australian dollars per night.  If you are looking for luxury this certainly wasn’t  it  but it was a nice enough place to sleep and my daughter loved it!!!  Given Las Vegas is not the most kid friendly destination, though it was better than we thought, certainly Excalibur was probably one of the most kid friendly hotels there.

    Life in a castle in Las Vegas!

    Life in a castle in Las Vegas!

  5. Hire a car and drive

    “What!!!  Don’t they drive on the other side of the road????”  I hear you say.  Yes it is a little scary to start off but driving around the US is awesome.  You get to see and do things that you would never get to otherwise.  The roads are amazingly well made compared to ours and we found the drivers pretty polite, contrary to what you might think 🙂 .  We picked up “Bertha” our hire car from San Diego and took her all the way around to San Francisco over 14 days.  She cost around $45 per day and we ended up taking her something like 3,200kms.  Petrol is cheap in the US as well.  We think we paid around $2.50 per gallon generally speaking so that is about $0.80 cents per litre in Australian dollars!!!!!  Mind you we brought our GPS from Australia and downloaded US maps so that was a big stress reliever in terms of getting us from A to B!!!!  It turned out to be a lot cheaper than flying for the three of us and it meant we got to see a lot more of the “real” America.

  6. Stay out of the Disney Stores with your 4 year old….

    Oh I had an epic fail here, mind you all the merchandise is substantially cheaper than in Australia, even accounting for the falling Australian Dollar while we were there 🙂

    Warning: Disney stores are BAD for the budget!!

    Warning: Disney stores are BAD for the budget!!

If you are thinking about going to the US I would highly recommend it.  We are going to be saving hard for the next few years to try and go again.  Next time we might try Disney World in Florida!  It is always good to have a goal!!  Now back to the real world!!!

Have you been to the US?  What did you think?

If you liked this you might also like:

15 Ways To Save Money In 2015

How To Pay Off Your Mortgage Faster

5 Websites That Will Make Or Save You Money

5 Financial Tips You Need To Know Now You Are A Parent

If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:




Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

29/03/2015 10 comments
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Nimble MoneyMe

I am sure you have seen the ads on TV: having problems with paying your gas bill/phone bill/car repairs/nursery for your new baby?  “Why don’t you Nimble it?” says the guy dressed in a rabbit suit.  Nimble call themselves “smart little loans” but in reality there is nothing smart about them, as behind the humor and quirky advertising, lurks the most insidious form of lending the ‘payday loan’.

But what is a ‘payday loan’?  Typically a payday loan is for a small amount of money, usually less than $2,000 and which is lent for only a short period of time.  Traditionally it was until your next payday and hence the name.  The other trademark of a ‘payday loan’ is the extra ordinate interest and fees interest they charge.   In Australia, fees are regulated at 20% of the value of the loan and a maximum interest rate of 4% per month.  Yes, you are right 4% per month is 48% per year!  So if you borrow a $1000 over 6 weeks it will cost you $1,280 in interest and fees!!!  And that is just for 6 weeks!!!  Worse, in the case of Nimble if you miss a repayment they will spank you with $35 fee and $7 a day until you have cleared the debt.  Yep, they don’t tell you all of that in the cutesy hipster advertising.  Now you understand why it is so easy to get yourself into trouble using this form of lending.

To help you get trapped in a cycle of debt Nimble will even put your hugely expensive loan directly onto a Nimble prepaid visa card for you – just to make sure it is even easier to spend!  And to apply for these incredibly expensive loans all you need is the Nimble app on your mobile phone or internet access on your home computer.

And this is what makes me fear for our children.  You see the clever, soft, hipster advertising isn’t aimed at me, a 40 something  mother, it is aimed at young people who are unaware of the danger that this type of lending represents.  Combined with easy access over the internet or an app on your phone, these types of loans have become far easier to access and more socially acceptable than ever before.  That has got to scare any parent.  No-one wants to see their son or daughter trapped in a debilitating cycle of debt, taking out loans to repay loans, where the horrendous interest costs and fees cripple any chance to clear the debt.

So what are the alternatives to a payday loan?

  • Ask yourself the question “Do you really need it?????” Are you absolutely sure you cannot do without it? Are there other ways to achieve the same goal?
  • If you need the money to pay a bill as the adverts suggest, make sure you negotiate with the supplier first. All utilities, whether you are talking about your telephone, electricity, water or gas bills have hardship programs you can utilise to get the bill paid without incurring more debt.
  • If you are on low income and qualify, you could take out a No Interest Loan (NILS). If you are interested in finding out more please click here.
  • If you are on Centrelink, see if you can receive an advance.
  • Talk to your family and friends and see if they can help you. Usually I don’t believe in mixing family and money but when it comes to payday lending it is a far better alternative than paying extortionate rates of interest and fees.

It is important to know that Nimble and MoneyMe are not the only guises of the payday lending blight in Australia.  Cash Converters, Cash Train and Cash Stop are all payday lenders and so is pretty much anyone else who offers easy short term loans, hipster advertising or not.

So as your child approaches adulthood make sure you talk to them about payday loans and all their different guises.  Tell them about all the things that the snazzy advertising and bouncy jingles forget to mention like the high fees and huge interest rates these loans attract and how easy it is to slip into a cycle of debt.  If they don’t believe you, as most teenagers don’t, tell them to check out this youtube video from “Last Week Tonight with John Oliver”, it is a comedic view of the horrors the payday lending industry have unleashed on the US.  It is exceptionally well done and well worth a watch for both parents and children (though the language gets a bit colorful at the end!).

 

 

I know that when my daughter is old enough, she will be watching it and  I will be telling her all about how payday lending works.   It is only through knowledge and education that we can protect our kids from this insidious form of lending.

p.s If you have a problem with payday lending a Financial Counsellors can help you, call 1800 007 007 Australia wide to hook up with one in your area.  Their service is completely free.

If you liked this you might also like:

15 Ways To Save Money In 2015

How Much Your Credit Card Debt Is Really Costing You

5 Websites That Will Make Or Save You Money

5 Financial Tips You Need To Know Now You Are A Parent

If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:




Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

17/01/2015 11 comments
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How to save

Our first post for 2015 is from the lovely Larissa from Hey Little Spender. Today she is sharing with us how she saved $93 per month in 15 minutes! Take it away Larissa!!

I know I should love this stuff, being a savings blogger and all that, but I’ve been procrastinating big-time on sorting out my two home loans.

They are the biggest investments I’ve ever made, and I worked and saved bloody hard to buy them.

However, strangely enough, finding a better deal on those loans doesn’t grab me the same way as, say, finding cheap movie tickets or saving money on holding a dinner party!!

What am I paying this much for?!

I know the rates are way too high at the moment, after coming off the end of a special rate which finished some time back. However beyond paying a quick visit to a mortgage broker, I’ve done nothing to fix the situation.

It’s all a little confusing – mostly because I am thinking about selling one of the places early next year and buying a new one closer to the city. And I didn’t know whether I could do anything to reduce the rates in the meantime while I went through the whole selling process, which is likely to take a while.

Plus I’ve never sold a house before, so the thought of doing that also terrifies me a little!

However today I took the bull by the horns, and decided that it was really time to stop wasting my money and get this thing sorted out – especially because I’ll need every penny if I plan to buy a new place.

I decided to take a little inspiration from my mate Jeremy, who often calls his bank to wrangle the best rate on his mortgage – read his tips here.

Comparing loans

I thought I’d better go in with at least a little bit of firepower, so I did a quick search on comparison website Canstar, and found the cheapest rate going. I didn’t look into the specifics too much (OK, at all) I admit, but thought I’d better have at least a ballpark interest rate up my sleeve to present to the bank.

Make me an offer, or I’m gonna leave

So with the lowest interest rate I could find written down, I gave the bank’s mortgage people a buzz to see what they could do, noting that unfortunately I would have to leave unless I got a discount.

They said they’d get back to me in 5-10 working days (arrghhh), but in the end it only took a few hours for a return phone call.

What they offered

My interest rates were at 5.44% – way too high for Australia I know.

One option was to take out a two-year fixed interest loan on the investment property I’ll be keeping (which would have been a 4.79% interest rate plus an $8 monthly fee). However it seemed a bit premature to agree to that on the spot.

Also, to complicate things further, because I bought the investment property using equity from the place I’m planning to sell, I’ll have to stick some of the sale proceeds on the investment property to keep the bank happy.

That will mean the loan amount is likely to change. Still with me?

Temporary fix

The other, more temporary option was to just change both properties to a 5.2% variable, no fee interest rate for now while I sorted out everything else to do with selling.

What I saved

To my surprise, I was able to change to the 5.2% over the phone – without even signing a form – and my online bank account confirmed that this had been done immediately.

On one property that means a monthly saving of $63, and for the smaller loan it’s a $30 saving.

I know I’m going to have to shop around again for a better rate once I buy a new place – if I decide to go ahead with that option – but from January, that’s $93 extra in my bank account each month. And it only took 15 minutes.

That saving will come in super handy as I squirrel away my pennies to buy a new place.

So there you go. I could kick myself that I didn’t do it earlier!

What have you done to find a lower interest rate? Share your tips here.

If you would like to get more great tips from Larissa, visit her at Hey Little Spender here or on facebook here.  This post was republished with full permission.

If you liked this you might also like:

How To Pay Off Your Mortgage Faster

15 Ways To Save Money In 2015

5 Websites That Will Help You Make Or Save Money

 

Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

08/01/2015 0 comment
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