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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?

If you liked this post you might also like,

10 Easy Ways To Save Money

How To Pay Off your Mortgage Faster

5 Websites That Will Help You Make or Save Money

How To Create a Budget

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?

Should I Fix My Mortgage Rate?

How To Use An Offset Account To Pay Off Your Mortgage Faster

How To Make Your Savings Work Harder

 

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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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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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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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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Ways To Save Money

As most of you know my day job is to teach social workers about money so that they can then help their clients with their financial issues.  A big part of the course is exchanging ideas on ways to save money.  I love to hear everyone’s tips for saving money and it is one of my most favourite parts of the course.  So, given I have heard heaps of ways to save money, I decided to compile all the best ones into this list.  I am not suggesting you do all of the things on the list, but take a look and use the ideas that make sense to you.

  • Use a separate bank account that is hard to access.
  • Direct debit a set amount into your savings account as soon as you get paid.
  • Get your employer to directly put part of your pay into your hard to access savings account so you never see it.
  • Never spend a gold coin. As soon as you get one put it into a money box that you need to a can opener to open. This really adds up over a year.
  • Never spend a $5 note. Again put it into a money box that you need a can opener to open and be surprised how much it adds up to by the end of the year.
  • The night before you get paid clear out all the notes from your wallet and put them in a money box.
  • When you get paid put any excess money you have left in your account directly into your savings account.
  • If you use the internet to access your savings account try changing the password to your savings goal – such as “Holiday to Thailand” or “House deposit” so that every time you access the account you are reminded as to why you are saving the money in the first place.
  • Check your spending leaks. A spending leak is something that you do regularly which you could do differently to save money.  For example, on in my case I calculated I could save $2,184 per year 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!!  To find out more click
  • Track your spending by either writing all your spending down on a piece of paper or using MoneySmarts free TrackMySpend app. This will let you know where your money is going and indicate places where you can cut costs.
  • Buy vouchers with excess cash in your wallet when you are at the supermarket. Stash them somewhere safe and see how they add up over a year. Just watch the expiry dates.
  • Shop from your cupboard and spend only $21 for the week on groceries. If you are anything like me then you have enough food in your cupboards to last quite some time!! Sometimes I think I am a ‘doomsday prepper’, without the weapons or the underground shelter, but on the food front we will be fine in an emergency!!! Shopping from your cupboard means you make recipes for a week from what you already have then use a small amount of money, say $21, to by the extras you require.  Then you put any money that you would have spent for the week on groceries into your savings account or money box.
  • Sell things and put the money directly into your savings account. I recently raised $440 buying selling clothes and toys that my daughter no longer used. It was really easy!  To read more about it please click here.
  • Stash any windfalls you might have into a hard to access savings account before you have a chance to spend it! Maybe your tax refund?
  • Pay excess on your mortgage, if you have one, then use a redraw to get it back if you need it. This will not only save you interest on your loan but shave years off your mortgage, meaning you will be owning your own home sooner.

There are heaps of different ways to save money.  You might think these are just little things but I promise you it is these little things that make the difference.  I had a single mum in my class who saved every $5 note over a year and took her kids on a ski weekend with $840 in $5 notes.  So give the tips that you think suit you a try and you might be surprised how much you have by the end of 2015!!

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

 

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.

11/12/2014 17 comments
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Road Safety Saves Your Wallet

This post is brought to you by Prime Lawyers.

Last week I popped out to my letterbox to see what the postman had brought.  No bills; fabulous, a few pieces of junk mail; ok, but then I saw an ominous looking envelope.  You know the sort, official looking but you can’t tell who has sent it.  I started to get nervous.  Could it be the dreaded Tax Department?  No, we already had a pay up notice from them and it wasn’t even due yet.  The Department of Social Security or Human Services or whatever they call themselves nowadays?  Nope.  It didn’t look good.  So with great hesitation I opened it.

It was a speeding fine!  Agggggghhhhhhhhhh!!!!!  I didn’t realise the main road next to my new job was a 50 km/h zone and I had been caught by a speed camera doing 64 km/h!!   The total cost of my misadventure the loss of 3 demerit points and $248!!!!  Ouch!!!

I hate paying fines.  My husband says I drive like ‘Miss Daisy’ and maybe I do.  I think it is best to try and avoid fines at all costs.  Clearly this time I was not ‘Miss Daisy’ enough.  My bad.  I broke the rules and now I have to pay.  However, I cannot help but think of all the other things I could have done with that money.  Money that is now going into the government’s coffers.

However, it could have been worse.  Another 6 kms/h over the speed limit and it would have cost me $425 and 4 demerit points!  Eeeek!!!   And if you are travelling 30 kms/h over the speed limit it costs you $815!  And don’t even think of touching your mobile phone while driving, that will cost you another $298!

Although being fined is, by far, not the worst outcome you can face from breaking the road rules.  No, there are far worse outcomes.  You could cause an accident.  Then not only do you have the hassle and cost of dealing with repairers and insurance companies to get everything fixed, but you could also face negligent driving charge.  The maximum penalty for an offence of negligent driving is a $1,100 fine.  Ouch!

But even that is not the worst of it.  If you have an accident, especially at speed or driving under the influence of drugs or alcohol,  you are more likely to hurt or kill yourself, your family or someone else and their family.  It really does not get any worse than that.

So be careful this Christmas and stick to the road rules.  Remember double demerit points will apply on the major holiday periods.  Make sure you stick to the speed limits, don’t touch your mobile phone while driving and especially make sure you do not drink and drive.  Your wallet, your family and potentially someone else’s will thank you.  In the meantime it is back to being ‘Miss Daisy’ for me!

{Please note the cost of fines quoted in this post are from the NSW Roads and Maritime Services Department.}

This sponsored post is brought to you by:

Prime Lawyers:  Prime Lawyers is a premium service law firm with offices in the Sydney CBD, Chatswood, Parramatta, Sutherland and Wollongong.  They have a team of lawyers who specialise in traffic law/negligent driving charges.  Click here to find out more.

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28/11/2013 19 comments
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How to get the most from your savings account

Your savings are an investment.  They are not something that should be plonked into the same old  savings account because that is what you have always done.  You can, and should make your savings work harder.  With the latest round of interest rate cuts, interest rates are low and it is now even more important to make sure you are getting the best possible return for your savings.  “Don’t I just pick the account with the highest rate?” I hear you say.  Yes, generally speaking, but like most things it is not as easy as just that.  So here are a few things you need to look out for in choosing the best possible a savings account for your cash.

  1. What is the interest rate?  I know it is an obvious one.  The higher the better but there are a couple of tricks when looking at the rate.  Firstly, you have to be clear whether it is a bonus rate or not.  Bonus rates are an introductory offer which lasts for a period of time before the account reverts back to the regular interest rate.  The bonus period generally lasts from 3 to 6 months.  The trick is that once that period is over the difference in interest rate can be quite large.  For example one account I was looking at had a bonus rate of 4.6% but then reverted to 2.75% after 5 months!  There is nothing wrong with taking a bonus rate just as long as you know that is what you are doing and you are clear what rate the account reverts to.  In fact, you can take advantage of them then move when the rate ends if there is a better deal on offer.  Just make sure the account allows you to do this.
  2. How often is the interest paid? The trick is, the highest interest rate is not always the best as how often the interest is paid is an important factor too in determining your investment earnings.  Generally speaking the more frequent the interest payments the better off you are.  This is due to the power of compounding (click here to find out more about compounding).  So, when looking at two investments at the same interest rate, the one with the more frequent interest payments is better.  For example, a $10,000 investment at 4.7% paying interest monthly will make you $10 more interest over 1 year than the same investment paying annual interest.  It doesn’t sound like much but run that investment over 5 years and the difference is $61.  We all know every little bit helps!  Click here for a calculator to check out the impact of compounding and interest rates on your savings and to help you compare accounts.
  3. Fixed vs variable interest rates?   Most basic online savings accounts and cash management accounts pay variable interest rates.  This means that the rate of interest that you will be paid will rise and fall with changes in official interest rates.  Fixed rate investments, such as term deposits pay the same rate of interest during the term of the investment, regardless of what happens to official interest rates.  Fixing your rate is a good strategy when interest rates are falling because you lock in a rate but when rates are rising you miss out on higher rates during the term of your investment.
  4. Are you locked in?  In financial speak we call that the term of the investment.  Most online savings account give you easy access.  Term deposits lock your money away for a specified period of time.
  5. What fees are involved?  Fees eat away at your returns.  Given the low interest rate environment it becomes even more important to make sure you have a fee free account.
  6. Is there are minimum balance?  Be clear on whether the account has a minimum balance and whether you make that criteria.
  7. Other features.   Be clear on what sort of other features you would like to have on the account.  Do you want ATM access or do you want to limit access so you are less likely to raid the cookie jar :-).

So as you can see there are lots of factors that need to be taken into account when choosing the best savings account for you.  One of the best ways to compare all these factors is to use a comparison site.  These site don’t cover the whole market but they can certainly give you a good idea of what is out there and help you on your journey to get more out of your savings.

If you liked this post, you might also like:

 10 Easy Ways To Save Money

How To Pay Off Your Mortgage Faster

How Interest Rates Impact You and Your Family

How To Boost Your Superannuation Balance For Free!

* Please note this is for your general information only and does not constitute financial advice.  Please see a financial planner or accountant to get advice specific to your individual needs.

15/08/2013 19 comments
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How interest rates impact families

Interest rate talk is everywhere, especially with last week’s decision by the Reserve Bank of Australia (RBA) to cut the official interest rate to 2.5%.  Many people think that changes in interest rates impact only those who have a mortgage but this is simply not true.  Changes in interest rates impact everybody.  They influence whether individuals like you and I decide to save or spend or borrow.  Or whether businesses, large and small will expand or contract.  In this way interest rates impact the direction of the whole economy, impacting the daily lives of you and me.

So let’s start at the start – what is an interest rate?  An interest rate is simply the price of money.  The lower interest rates are the cheaper it is to borrow money and spend it and the less attractive it is to save money (because you don’t get much return on your savings).  The converse is true of high interest rates which make it more attractive to save and less attractive to borrow and spend.  Think about it, if interest rates were 15% it is very unlikely that you would want to take out a loan and buy a new house.  However, putting your money in the bank where you would get 15% interest would look pretty attractive.  In this way the RBA uses the level of interest rates to increase the level of spending or saving to make the economy go faster or slower as required.  If the RBA thinks the economy is growing too fast they will raise rates to make it more attractive to save and slow borrowing.  If growth in the economy is slowing then the RBA will cut rates to increase the attractiveness of borrowing and to cut savings.  At the moment the RBA are cutting rates as they are concerned about the economy slowing and so are trying to get us all to save less and spend more.

Things to watch out for in a low interest rate environment:

  1. If you are looking to borrow you must always remember what goes down must go up!  Yes interest rates have gone down recently but when low interest rates do their job and the economy picks up, interest rates will inevitably start to rise.  Don’t be tempted by the current low rates to borrow to the max.  Yes, take advantage of low rates but always stress-test your repayments to make sure that you can still make them at higher levels of interest rates.  For example, when we bought our house back in 2008 (just before the Global Financial Crisis hit), we were paying around 9.5% on our mortgage.  That meant an extra $1,500 on our repayments per month compared to what we are paying now.  A decent chunk of change!!!  Mortgage rates could easily get up to these levels again, so be prepared.  Click here to check out a mortgage calculator to make sure you will be ok when rates start to rise.
  2. Low interest rates are a gift to borrowers – so use it wisely!  The RBA would like you to take the money you save on your mortgage repayments and spend it.  A wiser idea might be to keep your repayments the same so you pay off your mortgage faster (provided you are comfortably making your repayments at current rates).  The latest rate cut reduces repayments by about $50 per month on a $300,000 mortgage.  This seems only small but it can cut years off your mortgage.  Click here to check out a calculator which shows what a difference a small increase in repayments can make over the life of your loan.
  3. Maybe it is time to consider fixing part or all of your home loan.  See my post next week on the pros and cons of such a strategy.
  4. Savers need to make their savings work harder.  If you are a saver, good returns are becoming harder to come by and it becomes more crucial to assess all your options and make sure you are getting the best possible rate for your savings.  Click here to check out my post on what to look out for when choosing an account.
  5. Savers don’t chase returns.  In a low interest rate environment, returns on savings are generally lower and the temptation to take on higher risk investments for greater return grows.  Be very sure you know what you are doing and that you are very comfortable with the increase in risk that comes from higher return investments.  For example, taking money out of cash (low risk) and putting it in shares (higher risk) is a big move up the investment risk spectrum.  Make sure you understand this is what you are doing and you are comfortable.   (Click here to see my post on understanding risk.)

Interest rates are one of the important levers that are used to steer our economy.  Everybody should pay attention to changes in rates as they impact the daily lives of every single one of us.  Interest rates affect whether we borrow, spend or save.  It impacts how easily we find it to get jobs, take holidays or sell our house.  It affects individuals and businesses and nearly every financial decision you make.  Where are rates going from here?  Only time will tell, but I suspect we have seen the last cut for the next few months.  How the economy performs from here will determine which way rates go next.

If you liked this post, you might also like:

How To Pay Off Your Mortgage Faster

10 Easy Ways To Save Money

How To Boost Your Superannuation Balance For Free!

Is Costco Membership Worth It?

* Please note this is for your general information only and does not constitute financial advice.  Please see a financial planner or accountant to get advice specific to your individual needs.

13/08/2013 3 comments
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Easy Ways To Save Money

Ok, here is a confession.  I am not very good at sticking to a strict budget.  For me, it’s like being on a soup diet, it is just not possible!  However, on my journey from being a spender to a saver I have learnt several tips that have helped my bank balance to grow.  Most of them are small things but the best part is that instead of being a chore or a punishment they have simply become a part of the way I live my life.

So today I would like to share them with you:

  1. I always write a shopping list and stick to it.  Supermarkets are the land of temptation.  They are deliberately designed that way.  Where and how each product is placed is planned to get you to spend more.  They call it the “theatre” of the shopping experience.  Have you ever wondered why the milk is always on the back wall of the store, furthest from the door?  It is so you have to walk through the whole store to get to this one essential item, hopefully picking up a few unintended purchases on the way.  I find a  shopping list helps to keep me focussed on the task at hand.
  2. At the supermarket, compare products on a per unit basis.  The shelf pricing sticker for each product shows how much the product is on a per unit basis (per 100g or per litre etc).  I sometimes find that the largest size does not represent the best value on a per unit basis, especially if the smaller version is on sale.  This method also gives you a common basis to assesses whether the branded good is worth it versus the “home” brand, without having to worry about different package sizes.
  3. I have a $100 single purchase spending limit.  This means that anything I want to buy that has a price tag of over $100 (you can pick the number that suits you), I have to wait until the next day to buy it.  Let’s just say it helps slow down my spending and gets me out of the shop environment where I can think more clearly.  It is surprising how many times I have decided with the clarity of time that I don’t need to go back and purchase something.
  4. Embrace the hand-me-down and buy second-hand!  I am so grateful to have a wonderful friend who has given me loads of hand-me-downs, anything from clothes to toys and bedding.  She gets great joy in seeing her children’s things having a second/third life and it has saved me a fortune.  I am continuing the tradition by handing Miss Money’s clothes etc on to someone else.
  5. Buy an Entertainment Book and use coupons when you can.  Ok I realise that it is a complete oxymoron to tell you to buy something to save money!  (Though I have tried using this argument on my husband!)  However, there are great savings to be had using this book of coupons and part of the proceeds raised from the sale of the book go help great causes such as hospitals and charities.  Back in our pre-children days, my husband and I used to be regular users of “fine dining” section of the book.  Now, it is all about the coupons at the back.  So far we have used the vouchers to get 25% off our local pizza, 25% of Adult entry to the zoo and buy one get one free ice cream.  It doesn’t take long for the savings to add up, even after accounting for the cost of the book.  If you are interested in checking it out click here.
  6. Hook into your local networks to find ways to entertain your children for free.  Check out your local council’s website for free activities for children, especially during the school holidays.  There are also websites such as Kid Size Living that tell you of free activities going on in your area.
  7. Turn off the lights and don’t leave electrical goods on standby.  It’s an oldie but a goodie and such a simple way to save money.
  8. Avoid fees where possible.  This includes things like fees for using another bank’s ATM, or fees for using your credit card.  I have an ATM finder app on my phone which directs me to the closest ATM for my bank.  I also do my best to avoid parking and all other fines as I see them as a big fat waste of money.
  9. Pay off your credit card.  Running a balance on your credit card and not paying it off every month is costing you cash.  Cut it up and pay it down.  Click here to see my tips on how to do so.
  10. Make your savings work harder.  Making sure you have the best account possible for your savings is another easy way to move towards your savings goals.  This means an account with low or no fees and the best interest rate possible for your timeframe/goals.  Great places to compare accounts include Canstar and Money Buddy.

I hope you found my tips useful!

If you liked this post you might also like to read:

How To Pay Off Your Mortgage Faster

5 Financial Tips You Need To Know Now You’re A Parent

How To Make Your Savings Work Harder

Is Costco Membership Worth It?

* Please note this is for your general information only and does not constitute financial advice.

02/08/2013 21 comments
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