Archive for the ‘fathers’ Category

MONDAY MONEY – Something Special

Having fallen foul of the flu this week I have been pondering what I would write. Whilst the head is still a little foggy I thought it best to look at something that I managed to do with my daughter in a couple of days as a gift for her cousin.

It is not an expensive thing to do, making a gift for someone, it is something very special, with time and love spent in making it. The commercialised side of Christmas has really taken hold. I would say for most people it is a case of what is the latest gadget that I can get, what piece of technology is there out there that I don’t have. The one that leaps to mind for me is the IPhone. My son has told me that I don’t need an IPhone as I only need a basic mobile, I would never use all the other bits and pieces attached. He’s probably right!

Anyway, I move off the subject. I drew my daughter a picture onto a piece of wood, coloured it in and then cut it into a puzzle for her. Yes you need to know how to do this sort of thing, but there are many gifts to be made. Without prompting she wanted to know if she could make one too, for her cousin we are going to visit at Christmas. She is 4 and I looked at her and said of course, thinking that I would end up doing all the work. How wrong was I, she helped search the internet for pictures of a tractor (her cousin is into tractors), then I drew it onto her board, and she coloured it in. Not the idea I had. Her cousin is going to get a brightly coloured tractor puzzle that she spent 2 days making. How much more special can you get (photo here).

So on a somewhat shortish note, think about the latest gadget you’re thinking of getting. How much love and thought is there in this? I love my gadgets and toys that I have, and yes it is great to have an excuse like Christmas to go and ‘upgrade’ again. At the same time though, isn’t it nice to have that little something special, the thing that says I really thought about you at this special time of the year.

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Wordless Wednesday – Tired

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Wordless Wednesday – Dinner Last Night

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13 Things I Have Learnt This Week

  1. It’s not actually possible for your head to explode.  You may want it to, but that’s another story.
  2. I’m ridiculously in love with my big girl.  She has been so worried about me being sick and she’s been adorable, cleaning, playing with her little sister and a pleasure to be around.
  3. The little one can sleep for 5 hours straight.  Several other nights there’s been a lot of crying, but that one gives us hope.
  4. I’ve never had sinusitis before.  I thought I had, but a dull ache above and below the eyes is nothing to the drill/knife/jackhammer that’s been active this week.  My entire eye socket and even my teeth hurt.
  5. There are actually about 15 trains a day from Rome to Venice, but for some reason I can’t get tickets after the 12th of December.  Later ones had better become available in the next couple of weeks.
  6. There is a Charlie and Lola live show in London on the 23rd of December.  My girls are going to LOVE it.
  7. I’ve worked out how to put together a yoked jacket with a lined hood and bodice with minimal instructions.  Now I just need time to finish the hems and buttons and for baby girl to actually try it on.
  8. It’s ok to let something go.  I always over-commit myself ridiculously and stepping back from something has changed my stress levels enormously.
  9. There is a local woman who does clothing alterations/repairs who put a new zip in my favourite jeans.  Now I just need to lose the weight so they’re comfortable again.
  10. It’s much less painful if you don’t look at everything as you sort it.  Two big boxes of baby clothes ready to go to playgroup and be passed on.
  11. I should have left the corn on the cob for both girls.  They ended up hijacking ours and we ate the kernels I’d cut off for them.
  12. I love my husband.  He’s helping deal with baby girl at night, doing his normal job and painting our new investment property after work.  And he’s been looking after me while I was sick.
  13. Between 1 and 2 is such a happy, loving, exciting, adventurous age.

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Wordless Wednesday- Waiting for Daddy…

Waiting for Daddy...

Waiting for Daddy...

 

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MONDAY MONEY – INVESTMENTS Paying off Debt and Investing for the Future.

My strongest recommendation is to pay off the debt you have, and then plan further investments for the future. Many of us have debt, usually 2 or 3 loans, ranging from short term to long term. With all the loans there are fees and interest that we are paying. It is worth doing a few calculations to see how much you are paying back on all the loans. Once you have done this you will realise how much money you have for future investments.

Starting with the loan (credit card included) with the highest interest rate, how much is the monthly repayment on this account. If it is a credit card then there needs to be a plan not to make any more purchases using the card, the aim is a zero balance and then to get rid of it altogether. Pay the minimum on all other loans and put everything into getting rid of the highest interest.  Once this is achieved, using the monthly payments from the loan you have just paid out, add these to the next highest interest rate loan and pay it out. Adding the 2 amounts together will reduce the loan in next to no time and save you a huge amount in fees and charges. Keep doing this until you have no more loans left.

This sounds so simple, so why is it that we don’t do it? A big reason is discipline! We are not good organisers and really do not handle our finances as well as we would like to. There is always something more important than getting ourselves out of the financial mess we are in from week to week.

I think a fairly new product on the banking scene is the Offset Account. I know more and more people are finding this and starting to use it. I certainly did and it made a difference to my situation. Basically it is an account you have your savings or pay go into. Any interest on the funds is used against a nominated loan account. It is worth talking to your bank about how it all works. They should be able to explain it clearly. The interest that I saved on my loan I added to the repayments and I was able to reduce the loan faster, and in turn save more money.

There is a fine line between investing for the future and paying off debt. I strongly believe that we should be investing for our futures, and those people who make money from having us put money into their funds would agree with me. But I would say that we need to be a little cautious in this area, as we try and sort out what is sound advice and what is perhaps helping keep others employed.

It is all the harder when interest rates are low, there is a real chance to build some savings as I don’t have to pay as much in interest each month. Another way to look at this would be to say, here is a great opportunity to reduce the loan faster and reduce my debt! How many people have looked at this and kept paying the larger amounts into the loan, or have they gone ‘whew’ less strain on the budget and used the money elsewhere. I would hazard a guess to say lots of people have done the latter! I know what I have done in the past, lessen the strain on the budget is usually the path people take.

So how do I plan to make some real changes in my financial situation? My starting point was to look at all my expenses, then my income. From there I developed a budget. 3 simple steps. Making sure that my income was greater than my expenses each fortnight, including payments for loans. Once I had this information I was able to establish what amount I had per fortnight over and above my expenses, and what I could reasonably add to one of the loans I had. With this in place I made sure that I stuck with paying out the first loan. Next as I said before, adding the first payment to the second loan and paying it out. Not long before debt is being reduced very rapidly.

Once you have paid off the loan/s or repaid the money to someone else, you can start to seriously look at your future savings. Over the life of a 30 year home loan, you will have paid back in interest about the same amount as you borrowed. So it stands to reason that if you can repay the money sooner then you will pay less, and therefore start to save sooner.

I really do hope this is understandable as I have had a deal of difficulty putting it together. The main point is to not be paying interest on loans to banks as you try to save for the future, look at paying off your debt and then build a positive investment.

Monday Money – CREDIT CARDS – What a misnomer!

I like my credit card, it gives me a sense of power, control and a feeling of financial wealth. When I first got a credit card I had a limit of only $2,000, something small and manageable. It was relatively easy to keep in check, paid off at the end of each month and a really convenient way to pay for things. As time progressed the priorities for the budget changed and the paying off the credit card changed, and before long the card was at its limit. Sound familiar. Minimum payments became the acceptable norm for the month, sometimes a little extra went towards the bill. It wasn’t a debt, it was only the credit card.

Through the post came the first increase, an offer from the bank to increase the limit, take the pressure off, and couldn’t I use the extra money. The limit was now $5,000. More power, hey, look at what I can now use to buy things, bigger and better. Stroke the ego somewhat. Great way to pay the various bills on time, and leave the cash for other expenses. It was terrific, but in the long run a huge trap. The card remained out of control soon reaching the limit again, now the problem was even greater. Still the same income, but now the bill has increased, no wait, it is not a bill at all, just the credit card, make the minimum payment and things are sweet. Next bill in, the payment from last month only just covered the interest and charges.

As I said, I like, no, loved my credit card. I eventually let the limit increase to over $20,000. So much power with that amount of money. I refinanced the housing loan a couple of times to pay out the card, the aim was to get rid of it because I couldn’t control it. When completing the paper work the bank encouraged me to keep the card, and I let them. I worked with the best of intentions to keep the card zeroed each month, for the most part kept it that way, then the odd big item on the card, not so easy to get back to zero, slowly but surely it crept back to its limit, back in the same situation.

The name ‘credit card’ needs to be changed! It is not credit at all, and if we change the way we view and use this money then I know that people’s financial situations would be completely different. It is not your money that you are using; it is over and above what you have as an income. This money needs to be returned to its rightful owner, and it comes with additional costs, the money you use is probably going to cost you double what it would if you paid for the item up front with your cash. So the big ticket item that you want, need right now, on the credit card. Intention to pay it off in less than 6 months, at say 20% interest, the catch is that you don’t and the charges keep adding to the original cost.

To replace the credit card with something else is not easy. Firstly you will have to pay off the card, then what is there in its place. I suggest that you pay the card down, attack the debt, have a planned approach to reducing the amount. I liked to see on my statement at the end of each month an increase in the balance available and a decrease in the amount owing. Online banking is great for this as there is immediate gratification as you pay it off. Print out your statement and celebrate your success. Take control of the card altogether and start to reduce the limit available, this doesn’t have to be huge amounts, small is good, as the balance goes down, look at increasing the reductions on the limit as you take charge over the card, not the card over you.

As I thought about the credit card, I realised that to replace the card I would need to have the same amount in savings as I had as a limit. This is a really daunting thought. Think about it, if your card has a limit of $5,000, and then to replace it you have to have $5,000 of your own on in saving account. That is a swing of $10,000 if you are to be in control; perhaps this is why we don’t do anything as the cost of setting this up is beyond what most of us see as even the remotest of possibilities.

Have a look at your credit card statements for the last 12 months, go through and total up the amount of interest that you have paid? Think about the items you purchased and make sure these are items of need, not wants! The money you borrow needs to be for very special, emergency situation, and then a strategy put in place to pay it off as soon as possible. Keep a track of what it is costing you for each item, it will change the way you use the card.

I used this process to reduce the limit that I had on my credit card. I didn’t totally get rid of the card, I have a much smaller limit and basically use the card for emergency purposes only, and the balance is paid at the end of the month if I use the card, costs me nothing otherwise. I now have a Visa Debit card, the convenience of a Visa card, but using the funds that I have in savings. It really means that I have to have the money saved for the purchase, rather than just wanting something.

In the long run, the money you save by not having to pay additional interest and charges will help you gain control of your financial health.