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What Should You Do With Your Mortgage 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 […]

By |May 5th, 2015|Mortgages|6 Comments

How Interest Free Deals Work

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 […]
By |April 9th, 2015|Debt|7 Comments

Why We Need To Warn Our Children About Lenders Like Nimble And 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 […]

By |January 17th, 2015|Debt|10 Comments

Where To Get Financial Help For Free

I am sick of being bombarded buy constant radio and TV advertisements flogging financial help for high priced fees.  There are plenty of reputable, independent places where you can get similar financial help completely free.  Here are some of the places where you can access financial help for free:

(1)    Financial Counsellor

Financial counsellors are completely free.  They provide an independent and confidential service.  They can help you with a range of issues such as:

  • Helping you to look at different ways to improve your financial situation eg. budgeting
  • Check your eligibility for government payments/programs
  • Negotiating your debts with those that you owe money to, including banks
  • House eviction, rent arrears, disconnections of services such as electricity or gas
  • They can talk to you about debt, bankruptcy and other alternatives
  • Help you deal with debt collectors and fines

Financial Counsellors deal with a range of issues and are completely free. To find on in your area click

By |August 11th, 2014|General Finance|15 Comments

How Does A Line Of Credit Work?

Quite often people are offered a line of credit when they go to take out their mortgage.  But what is it?  A line of credit or home equity loan is a loan against the value of your house but unlike a mortgage which must be used to purchase your home, a line of credit can be spent on anything.  A line of credit can be spent in one hit or a little bit at a time.  Interest is calculated on the outstanding balance and you only have to pay the interest every month, that is it is an interest only loan.  Having a line of credit is a bit like having a blank cheque book against the value of your home.

Yippeee I hear you say, it sounds like fun but be cautious.  As the saying goes ‘with great freedom comes great responsibility’ and the same is definitely true of a […]

By |November 7th, 2013|Mortgages|16 Comments

How Interest Rates Impact You And Your Family (It’s Not Just About Mortgage Holders)

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).  […]

By |August 13th, 2013|Interest Rates|3 Comments

Investing Basics – How Do I Get Started? The Money Mummy Guide to Investing Part 1

Yesterday I posted an article which showed that women are better than investors than men, but knowing you have the potential to be a good investor is of no use, unless you know where to start.  So welcome to the Money Mummy school of investing!  Every Thursday I am going to publish a post which guides you through the key principles that you need to know when making your first investment decision.  Successful investing is not difficult and has nothing to do with luck.  There are a few fundamental ideas that you need to know which will greatly increase your chances of success and help you avoid disasters.  So let’s get started.

Before you invest a cent, there is one very important thing you must do and that is make sure your “financial house” is in order.  You must be very clear about how much debt you owe and what type […]

By |April 18th, 2013|Debt, Investing Basics, Saving|2 Comments