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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

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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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Talking to your children about moneyTalking to your children about moneyTalking to your children about money

Most parents see it as part of their role to have the birds and the bees talk with their children.  They expect that at some point in time it is a conversation (or in most cases, several conversations) that that they will have to have.  It is seen as an integral part of the parent job description, crucial to bringing up a well rounded child.

But why is it not the same with money?  We talk openly with our children about sex but shy away from something that will be just as an integral part of their adult lives.  Think of how many money related things you do every day – go to work, buy the groceries, pay bills, use a credit card, pay the mortgage or the rent.  Whether we like it or not money is an integral part of our daily lives.  I don’t mean this in a “money is the be all and end all” kind of way because it most certainly is not.  But you have to admit understanding your finances is pretty important and the consequence of poor financial decisions can be dire.  So why isn’t it up there with sex when it comes to talking to our children?

I think part of it is that our own parents never spoke to us about money.  When I was a kid I owned the 70s classic book “Where did I come from?” but my parents never spoke to me about money.  I didn’t know about the benefits of saving or how a credit card worked, let alone how much it costs to live away from home.  In my household, all of these things were unspoken.  Maybe they thought they were shielding me from their adult concerns, but all that happened was that when I left home was that I was totally unprepared for the financial realities of the real world.  As a consequence I spent everything I earned and then some!  The result was that I had a mountain of credit card debt, a zero bank balance and little to show for my hard work.  However, my first money lesson was learnt.  Don’t spend more than you earn.

Parents need to educate their children about money and most importantly instill a positive attitude towards money.  It is something that they, like us, will have to deal with almost every day of their adult lives.  Teenagers today have far more financial decisions to make than we ever did, from which phone plan to choose to how to manage their credit cards.  In fact, in the United States they have Justin Bieber and Hello Kitty credit cards aimed at tweens!  It will be only a matter of time before we see them here.

I want my daughter to have a positive relationship with Money.  So with her third birthday we have decided to start now.  Of course it will be at a level appropriate for her age, much like the way I explain to her differences between boys and girls and why she has to sit down when she goes to the toilet!  However, it will also be an ongoing conversation for the rest of her childhood, right alongside the conversation about the birds and the bees.

If you liked this post you might also like:

How To Teach Your Children About Money

5 Financial Tips You Should Know Now You’re a Parent

How To Pay Off Your Mortgage Faster

3 Things You Really Need To Know When Saving And Investing For Your Child

 

 

18/09/2013 38 comments
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