Archive for the ‘Work’ Category

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.

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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.

Monday Money – WHAT AM I WORTH AND HOW DID I GET HERE

This is a little personal history about where I am coming from when I am writing about the financial achievements which have occurred during my life. Hopefully this will give some insight into where I am coming from and that there is some real experience that I am basing my comments and information on. There are many experts in the field that are worth listening to, Paul Clitherow and Robert Kiyosaki are two authors that I would recommend reading and listening to the suggestions they make, following their advice is an even better choice.

I left school as soon as I could, not one for the classroom from a very early stage. I am left handed, so what you might say, but a year 2 teacher decided that I should use my right hand and broke several rulers across the back of my knuckles. Not character building or anything like that, just put me off school for a very long time. My first job lasted for a couple of years, full time employment, working for a children’s organisation on the grand sum of $85 a week after tax, heaps of money to a young man who didn’t have many over heads still living at home. I had some savings, not much and to my shock, was fired along with a couple of others, down turn in funding and we cost too much, replaced by a couple of 17 year olds.

My savings depleted I decided to look for a job, that very morning a call from my mother asking me to help her out and cover a job due to a bus accident. Not a big issue as I didn’t have anything else to do, and I knew it would be paid or at least I was able to stay at home and not feel guilty about not working. Without dragging out the love book and all the soppy stuff, I moved out of home at the age of 19, and for the first time had the experience of having to fend for myself. No one taught me how to manage the situation; hey I thought it would be a piece of cake. Wrong! After a few weeks I was in a total financial crisis, more money going out than coming in. The results of which I moved into a shared house with 3 others, and boy did that make a difference. Things started to change, financially as well as long term as one of the house mates later became my wife, we lived together for 4 years, gradually not replacing flat mates until we were on our own.

If this isn’t interesting, then skip a paragraph or two and pick it up later. I am sure that it will or won’t make more sense later; it is parts of what has helped shape the decisions that I make today, ones that I hope you can look at and perhaps think about how these might change things for you. I bought my first house after having a lease on a rental come to an end and looking at what we paid in rent and what we could afford to pay on a mortgage, 2 incomes and no children sounded good at the time.

Oh how quickly things change, and I am sure that some of you will be reading this and gasping, saying that is what happened to us! In my case, it was the most fortunate things that could have happened we moved into the house in May, found out that we were expecting our first child in February, got married in September, and experienced the eighties increases in interest rates, up to 17.5% in 1987. I learnt a lot about managing the financial running of the house.

We struggled from pay to pay for a number of years, the credit card became maxed out very early on and meeting the minimum monthly payments was usually all that I could manage. The insurance on the car didn’t get paid more and more often, more good fortune than management that we didn’t have an accident because that would have really stretched things further. As I have said before, there was a limit to making ends meet, and having a 2nd or 3rd and even a 4th job became the only way to keep things going. I could ramble on about the next umpteen years but that would be rather dreary, but suffice to say things slowly improved, especially when the interest rates went down. We didn’t change our lifestyles; rather I was able to cut back on the hours that I worked.

So jumping further forward, I divorced a number of years ago, with 1 child to support, as well as leaving most of the contents of the house and a significant part of the savings. We had a year before sold the family home so only had cash and possessions to sort. The credit card debt and loan on the car became mine, some $50,000 all up. There are no winners from this; both parties are going to come away with their own perceptions of who got what and what it was all worth. At the end of the day, I believe that I was left with what was reasonable.

I had a new lady in my life and we settled in together. It took me a couple of years to sort things financially. We took a punt on buying an investment property, something we talked about and researched for a few months before going ahead with. We looked at areas of growth, costs of housing in the area and what the rental returns could be. Fully armed with all the information we thought we needed we looked at 2 bedroom units, we set our price at under $100,000, armed with a newspaper and street directory, drove around looking. We had our finances organised, knew from our discussions what we wanted to buy and set about doing exactly that. Within a short period we had bought 4 units staying within our budget and the rules we had laid down.

We purchased our house over the Internet, using the photos online and asking the agent to take and email others to us. We found several houses and set about researching each of these, the purpose for the house was to get into the market, not as a life long commitment to the place. We found a place and put an offer in what we were prepared to pay, if the vendor was unhappy with this then we would move on, I made this very clear to the agent. So when he phoned back saying the vendor wanted $5,000 more than we offered, we thanked him for his time and hung up. A day later the offer we had put in was accepted. Sounds hard nosed, it was but we wanted into the market at the lowest price we could get and were prepared to work to get what we wanted.

So where has this put me now. We sold 3 of the units as they had increased in value by about 200% in four years, paid off the house, and have now bought another 2 properties. Our property portfolio is worth about $900,000 with less than $150,000 in loans. The $24,000 limit on the credit card is gone! We have no other debts.

This isn’t bragging, I want to show you what can be achieved. It does require work to get things in the right place, yes there has been an element of luck in what we have done. This sort of thing can be done anywhere with the courage to get in and have a go, not just hope that things will work. And yes there are risks involved, hopefully managed so they are minimal.

Men at work…

I’m trying to make a point here so let’s get to it – My husband works in a male dominated industry (mining).   I work in a female dominated industry (early childhood education).   I take our two year old to work with me and I work part time.  I travel a lot for work and I sing to her in the back of the car.  I take her to meetings, conferences, lectures, and networking opportunities where I am always surrounded by lovely women who smile and laugh and we all get on with our jobs.  I always make sure I am at home for 4 days out of 7 and then every second week full for our girl to be with her dad.

Now for his story…  My husband has just started out in the mining industry over the last three years.  He works a lot of overtime and is surrounded by men who also work a lot of overtime and probably have children at home.

Recently my husband refused some overtime to spend a Sunday with us.  Over the weeks leading up to this particular Sunday he had been away … then I had been away … and we had seen each other for one week out of six when his parents were visiting – not really a time of marital bliss.  Come Monday and dear husband is getting ‘pineappled’ at work (that’s his term for being in trouble with the boss).  He is sat down, given a warning and then the BIG boss is on the phone also telling husband that it is in his contract to work reasonable overtime.
My husband asks, “what do you consider reasonable overtime?”
“10 hours a week or one full day.”
“well I worked all day Saturday and overtime on Friday.”
“look… If you want to work in this industry you have to expect to work overtime whenever asked”…

My husband, being a gentle soul leaves it at that and accepts the warning.  He is even convinced that he had been in the wrong.  Until he got home and I had something to say about it.  I say – People make an industry – it doesn’t make itself.

Here is my biggest issue…  It’s almost a feminist issue (leave it to me to make anything a feminist issue).  Well actually it’s a humanist issue that impacts negatively on women as well as men – but the men within the industry are the only ones that can really change it.  THE ISSUE – It is the fact that we have a huge mining industry here in Australia that is mostly full of men.  Most of those men are probably fathers with wives who might happily be stay at home mums (part time in my case) but who still want their children to see their fathers.  However, the head honchos who make the industry are anti-family and therefore anti-woman.  So, are they promoting bad parenting towards our future generations?  Are they promoting negative relationships between man and wife?  Are they reiterating their own outdated beliefs by assuming that women should be the ones to raise children generally alone?

There has been a shift in choice in the world of feminism.  Before it was the choice to work and be liberated from forced domesticity.  Now it is the choice to stay at home and have the well earned support of society or to work with that same respect and support.  However, for those of us who have chosen to stay at home – with a partner in this industry (and many other male dominated industries) we could be taken for granted.

Although … in the end I think my husband is really getting the crappy end of the stick.

Early Morning Trains

I’ve started back at work, and everything is going swimmingly. My two year old is loving spending time with Grandma or Daddy on different days, and he loves catching trains with me in the morning.

I could do without the early starts in some ways – I’m not a morning person, never really have been. But the early mornings really do have their compensations.

The walk to the train takes about twenty minutes with my son. It takes me about ten minutes on my own. I get a little impatient with his frequent stops to look at things or even just to swap sides and hands. Even so, I love our conversations.

“Dog! Woof woof!”

“Yes, that is the house where the dog lives. What colour is it?”

“Black!”

“Lelloo-cotter!”

“That’s right! We saw a helicopter in the sky last week when we were standing at this corner.” (We did, too – we saw a helicopter one morning, and he reminded me of it when we got to that corner the following week).

“Lovely tree! Lovely flower! Pretty!”

As we near the train station, he starts to say, “Train, more train. Train coming!” He really likes trains, and looks forward to train rides. As we wander down on to the platform, often he’ll ask, “Play ‘tendoo?” He likes watching me play my Nintendo DS, and it can be a useful way to keep him sitting safely on the platform with me.

Once we’re on the train, he gives a running commentary on the doors opening and closing, and talks about changing trains when we get to the city. “Catch train, another train!” Other passengers smile indulgently as he steps on and off the train, which usually involves a very big step up or down over the gap.

When we get to the city station, we have a fifteen minute wait for our connecting train. Sometimes we go via the coffee stand, depending on how badly I need a coffee by then, and we take the stairs up to the platform. There are many stairs, and my two year old tackles them with ease. There’s a small platform halfway up the stairs, and when we get to this point he often looks up and says, “Another stair!” which results in more indulgent smiles from early morning commuters.

It’s very rare that I see another small child on the trains at that time of the morning. I wonder why that is?

We go up to the far end of the platform to wait, so we can be in the front carriage to meet Grandma at her station. And this is the part of the morning I like best.

We sit together on the platform, and my son eats a sandwich for breakfast. There usually are very few people at that end of the platform, so we sit together and cuddle up, watching trains and talking about colours and numbers; pointing at birds (usually pigeons and sparrows, though sometimes he says they’re seagulls) and chatting about the next part of our train ride.

However flustered I’ve been, rushing through the cold morning to get us both dressed and to the station on time, this part of our morning is always pretty easy. Some days, my husband looks after our son so I don’t have to hustle him on the train… and on those mornings, it feels lonely sitting at that city station on my own. I watch the trains and birds and think about how alien it feels that my son isn’t with me; which is a bit odd because we’ve only been making this trip together for about a month so far.

Once we get on the train again, I make sure we’re near a window so he can stand up and look at the river as we cross it. At that time of the morning there’s usually a City Cat sailing under the railway bridge, which he calls a ‘silly cat’.

We pull up at Grandma’s station, and I say goodbye as he gets off the train into Grandma’s arms. The last time we did that, he didn’t cry or protest at all – just smiled and waved goodbye to me as the train pulled away again. Before now, he’s wailed momentarily, though I know he’s smiling again moments after my train pulls away (Grandma texts me to let me know). Even knowing that it’s just something toddlers do, and that it’s just his way of letting me know he likes it when I stay, and that he’s laughing and happy within moments, it is a bit hard seeing your child’s teary face as you leave. So I was excited to see him smiling and waving at me the last time I dropped him off, and chattering animatedly to Grandma.

I have work tomorrow. I am not looking forward at all to getting up before 5am. I am looking forward to our train trip, though. I have a feeling these mornings will be precious memories some time all too soon.

‘Ya can’t change film with a kid on your back…’

Roger Miller was right… Nor can you change a tyre with said child on back…

As part of a new job I have to do 4X4 training (even though I have been working out bush for the past year and practically grew up in the back of a car… damned gypsy parents).  Usually I take my daughter with me to work but this week she has been in the care of a fantastic stay at home mum who has child care certificates, family day care experience, foster caring experience and two children of her own.  Obviously this woman is worth her weight in gold to the average working mum.

My job requires me to travel out to remote locations and getting to this point (a few weeks into the job) has been a roller coaster of will I/won’t I feelings.  Firstly there was the old feelings of neglect.  Am I doing what is best for my girl?    Then the feelings of self doubt.  You know, the ones that seem to be ingrained into us against our will by some chromosome more often linked with X’s rather than Y’s.  Then the feelings of personal gain –  money, experience, doing what I love, open roads, sing along opportunities in the car – all the really important things (obviously this feeling was the winner … I can’t resist an option that has a sing along).

But now I have landed and am trying to make it work.  I have days where I appear at the office with a screaming child and interestingly I get more done in two hours than I usually would in a day without the beautiful little smudgekin who has the voice of a feral cat fighting a broken violin.  I worry about where I might be next week.  I worry about the conditions that I might be facing.  I worry about whether or not there will be a suitable spot to park a developmentally delayed child with special needs.  Will I be adding to the chaos or creating a positive learning experience based on catering to young learners with varied needs?

And then I remember …  History repeats itself doesn’t it?  Isn’t this the story of my life so far?  Wasn’t that me in the back of the car all of those years ago?  Isn’t that where the sing along was invented?   So all I have to do now is ponder one thing – Was my upbringing good enough for my daughter?  I think the answer is inevitably yes.  Yes to covering the land.  Yes to meeting new people.  Yes to taking in different cultures and ideas.  Yes to bringing about positive change and learning.  Yes to sharing life on the edge, in the middle, and everywhere in between with your children!  It’s not as if you are letting the tiger in your car or  rollerskating in a buffalo herd.

So as Roger reckons ; ‘Knuckle down buckle down do it do it do it’ because  ‘you can be happy if you’ve a mind to‘ …  and who said you can’t just change the film when the kid is sleeping?  Or get a digital camera?