Hooray!! Cheap fuel!!!

Well, cheaper than a few weeks ago when the cost of petrol was about 150 cents per litre.

I pulled up to my local petrol station to get some petrol into the car, and I had a feeling that I haven't felt in a few years. It was like an old friend visiting and saying "Hello, I haven't see you a while. I hope that I can stay for a few months."

My service station was selling petrol at 102 cents per litre. This is the cheapest petrol I have purchased in the last few years.

Actually, there is not much point to this article except that strange deja vu feeling of living in an era where petrol was less than a dollar a litre. Hooray for cheap fuel!!.

Now where is that jerry can....

Talk About Debt

I recently received an email from Matt, the editor of TalkAboutDebt, bringing my attention to a UK based website call www.TalkAboutDebt.co.uk. I like the title as it encourage people who are in the debt to start talking about their problems. So I had a better look at it.

TalkAboutDebt is run by a group of bloggers who have, in the past, been in debt and are able to provide some dialogue about their debt experience.

It is good to talk about your problems as it allow the problems to be acknowledge and then for it to be tackled. TalkAboutDebt provides a forum, in their "Questions and Answers" page, which your debt problems can be discussed. By using the forum for the discussions, your anonymity is retained.

The thing to watch out for with TalkAboutDebt is that the advice provide is generally only useful for UK based debt.

It has a page where it lists a range of companies that are able to provide you with profession advice on getting out of debt. Most of the companies feature provide a free financial planning service to help you get out debt.

As with most information on the internet, beware of the information that you received, and double check it against another source. However, from what I can read information on TalkAboutDebt, it appears to be sensible and logical.

In summary, TalkAboutDebt provides another source of information, however, just beaware of the information that you received or read on it.

Fixing our interest rate - a retrospective

Back in February this year, we fixed our home loan interest rate for the the next four years. Now that we are coming up to the one year anniversary, and falling interest rate. It is interesting to find out if we have made the correct decision.

One of the things that fixed interest rate gave us was a peace of mind. Like the many mums and dads out there, I don't really have a clue on which way the interest rate is going. At the time when we fixed the interest rate, it was on the way up. Looking back on it, it pretty much hit the top and is starting to plateau. However, we missed about two interest rate increases. Furthermore, the fixed interest rate gave my wife and I a peace of mind and some certainty on what our monthly mortgage payment is going to.

Now that interest rates are on their way down, we are considering re-negotiating a new loan. However, among the fees that the new loan will incur is an re-establishment fee, which will be about $600 to $700 and mortgage insurance if the new loan amount is more than 80% of the loan (a few thousand dollars). A calculation will need to be made to determine how much will be save and the saving will begin when the fees are taken into account.

During the reconsideration of the new loan, we are not going to limit ourself to our current bank. Perhaps we should consult a mortgage broker to see if they can secure a loan with a low cost.

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Movember 2008

Hi All,

During Movember (the month formerly known as November) I'm growing a Mo. That's right I'm bringing the Mo back because I'm passionate about tackling men's health issues and being proactive in the fight against men's depression and prostate cancer.

To donate to my Mo you can either:

• Click this link and donate online using your credit card or PayPal account

• Write a cheque payable to 'Movember Foundation', referencing my Registration Number 1608361 and mailing it to:

Movember Foundation
PO Box 292
Prahran VIC 3181

Remember, all donations over $2 are tax deductible.

The money raised by Movember is used to raise awareness of men's health issues and donated to the Prostate Cancer Foundation of Australia and beyondblue - the national depression initiative. The PCFA and beyondblue will use the funds to fund research and increase support networks for those men who suffer from prostate cancer and depression.

Did you know:

• Depression affects 1 in 6 men....most don't seek help. Untreated depression is a leading risk factor for suicide.
• Last year in Australia 18,700 men were diagnosed with prostate cancer and more than 2,900 died of prostate cancer - equivalent to the number of women who will die from breast cancer annually.
  

Imagine if one of these men could be your father, your brother or your son.

For those that have supported Movember in previous years you can be very proud of the impact it has had and can check out the details at Fund Raising Outcomes.

Movember culminates at the end of month Gala Partés. If you would like to be part of this great night you'll need to purchase a ticket. The ticket can be purchased at Gala Tickets.

Thanks for your support.

More information is available at http://www.movember.com/.
Remember to make your online donation via this link: Donation

Movember is proudly grown by Holden and Schick.
Movember is proud partners with the Prostate Cancer Foundation of Australia and beyondblue - the national depression initiative.

Where to go for the freebies?

What could be better than getting something for free? I would certainly would want it, but where do you find all these free things? Doing a Google search with the keyword freebie brings up 7.9million hits.I have come cross three place that. Some of the hits only provide links to promotions like "get a Free iPod if you click on this advert, and then only if you and then of your fiends sign up for an online survey and ....blah blah..", I think you know what I mean.

Having said that, I have three sites that are has quite reliable information about freebies, what to do and where to go etc.

The Freebies Blog - This is my favourite in getting what is going for free. What I like about it is that it also has pictures of the freebies received.
BuckScoop Forum - BuckScoop has a forum for freebies. This is good as it is a forum and many users would provide feedback on how good the freebie is. This Crispy Creme freebie is a good one, stirs out the patriotic blood. :-)
Whirlpool Forum - Whirlpool also has a forum of freebies. Similar to the BuckScoop foum, it has reader feedback, however it does not appear to as active as BuckScoop's forum.

The two forum sites are mainly focused on Australian Freebies, while The Freebies Blog are mainly Australian and American.

Does anyone else know anymore of these sites?

The twin's mums just lost an unreasonable case.

A few months ago, I wrote an article about the parents of an IVF twins suing their obstetrician for implanting two embryos instead of one, causing a set of twins to be born.

Well, the case has been settled in favour of the defendant. This article from The Age has some details on the case.

Apart from the ridiculous amount money being sued for, the following quote stunned me.

"The court was told the twins' birth mother had lost her capacity to love and the couple's relationship suffered as they became mired in everyday tasks associated with raising two children."

Having read this, I get the feeling that this set of parents have lost (or perhaps, never gained) the notion of being parents. Not only have the mums blessed with children via the amazing IVF program, they have twice the amount of enjoyment with the twins.

I am not saying that having twins is an easy job. I have a young toddler myself and I can imagine that a pair of twins will be even harder, but as a parent, I will never lose the love for my son.


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High fuel price costs jobs

About two weeks ago, when I was waiting for my car to be serviced, I had an interesting conversation with the mechanic at the car dealership. It goes something like this.

me: "Did see the price of petrol today? It is getting pretty high."

mechanic: "When I drove in to work this morning, I saw about $1.70 per litre."

me: "I hope that it goes down a little in the next few weeks"

mechanic: "Well, I think the damage is already done. Some of my mates had to quit their jobs because the petrol prices are too high."

me: "Really?!?"

mechanic: "Yeah. They had to travel about an hour to work, and the cost of petrol is around $125 per week. They just couldn't afford it."

At that point, I start the feel how lucky I am to be working about 5 minutes drive from home. In a city like Melbourne where the suburban sprawl of extremely wide, it is quite common for workers to travel for more than two hours each day between home and work. The lack of public transport to service the widening suburban sprawl does not help these people.

The mechanic went on to say that his friends would have got more money in their pockets if they went on the dole, or unemployment benefit, however they manage to find similar jobs closer to home.

If I was in a similar situation, I probably would have seriously consider this option as well. In the current economic climate, having enough money to provide for your family the number one priority.

What would you have done in a similar situation?

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The real cost of that hamburger, movie, or kid

Welcome to a guest writer, Aaron Stroud, who blogs On Financial Success. He provides plenty of down-to-earth writing around personal finance. Many thanks to Aaron for the guest post.

What do burgers, kids, and movies have in common? They all involve opportunity costs.

When you buy a burger, you can't use that money to rent a movie, pay down debt, or invest. And when you sit down to watch a movie, you've traded your time and money for two hours of entertainment.

Sometimes a movie is the best use of your time and money, but that's time you can't spend reading or walking in the park.

These alternatives–the missed opportunity to read, walk, pay down debt, or to invest–are the opportunity costs of picking one option over another.

So how much does a $2 hamburger really cost? Well, over the next 25 years you're missing out on:

1. $65 if you carry credit card debt at 15%
2. $9 in saved interest on a 200k mortgage at 7%
3. $34 in missed retirement savings if you earned 12%

Perhaps it is worth rethinking your options before ordering that hamburger!

Oh, and the costs of children? Costs vary from family to family, but one thing is for sure—children are expensive. Fortunately they pay dividends superior to any stock.

Aaron Stroud shares reliable, easily followed steps to build wealth at On Financial Success. Subscribe to his feed to follow along or ask a question to direct the conversation.

Would you use a fuel price monitoring service?

With the fuel prices almost reaching the $2 per litre mark, I am always looking for different ways to spend as less as possible when I am filling up the car. One of this ways was to exploit the volatility of fuel cycle. Sometimes, I believe that the fuel cycle is manufactured to keep the illusion that the poor driver is getting a bargain at the bowser, (I am probably too cynical).

Fuel watch was a program that was first used in Western Australia with varying degree of success. It was introduced in 2001, so its effect on the local fuel prices would be well understood if it was to be introduced for the test of the country. Fuel watch was to provide the drivers to make an informed decision on when and where to get the next load of fuel.

An article in WA Today today has indicated that fuel price cycle in Western Australia has basically disappeared. It is not conclusive that Fuel Watch was the main reason. If the price cycle is as predictable as it is, what difference would Fuel Watch make?

I believe that fuel cycle will not totally disappears. It's price will still go up and down,following the world oil prices. It just that the fuel prices is not going to be as volatile as it has been. The volatility cycle will probably be measured in weeks rather than days.

Instead of investing money into Fuel Watch for the rest of the country, that money should be invested into more worthwhile projects such as ways of dealing with housing crisis, or getting more people in homes.

What do you think about a monitoring service like Fuel Watch?

CoPF #161 up at The Budgeting Babe.

The 161st edition of Carnival of Personal Finance has just been hosted by the Budgeting Babe. My entry on the rental crisis was also selected for publication.

Some of the articles that caught my eyes were.

1. Sallie's Niece on how she spent $900 on Gyros.
2. Money Ning on adjusting your invesment contribution.
3. Our Four Pence Worth has some wise advice on splurging on that next purchase.

There are many other great articles at the carnival. Get over there and take a look.

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Watch out for David Rhodes and his crazy chain letter

About two weeks ago, I received a letter in the mail addressed to "T. Chin", Upon opening it, I discovered it is a letter from David Rhodes. It had a 5cent coin taped to the top corner of the letter. It certainly caught my attention on what it was all about. Having never heard of David Rhodes, I read a bit more. It dawned on me that this is a classic pyramid scheme/chain letter that no one will ever be the winner. Furthermore, this type of activity is illegal and will incur a heavy penalty if found guilty. The Consumer Affairs of Victoria has a nice bulletin of what this chain letter is all about. The fines are more than $24,000! Wikipedia also has a good article on the history of this letter.

Essentially, the chain letter works by having you sending a gift of $10 to the person at the top of a list of 5 people. Of the 200 letters you send out, the person on the top of the list is removed and you placed yourself at the bottom of the list. The person that receives your letter will do just as you have done. You get your $10 when you have reached the top of the list.

That evening, I read it again trying to understand why so many people would be drawn into it and give it ago. Let's have a look at some of the letter characteristics.

• The plan itself appears to be extremely plausible for it to work, and the instructions looks thorough enough for it work. It even contain steps on how to fold the letters so that the creases in the folded letter does not mess up any future photocopying by your receiver.
  
• The chain letter contain a calculation of a scenario where it appears to be reasonable and realistic. It used a 3% response rate on letters that you sent out.
  
• The outlay for the participation is about $200. Most people may think that this is not such a large outlay and would be willing to risk to receive the "guaranteed" $70,000 return.
• Everyone loves a rags-to-riches story and caused them to think "if it happen to him, it certainly can also happen to me as well." The letter also contain several other rag-to-riches testimonials.

This is the first time that I have ever received such dangerous spam through the post. However, it is only dangerous if I acted upon it. The best thing I can do is take the 5cent coin off the letter and throw the letter into the recycling bin. At least that way, that letter did increase my wealth by giving me 5cent, better than nothing.

By the way, just found the Make Money Fast Hall of Humiliation. Reading the comments, I am amaze on how gullible some people are.

Rental crisis and what you can do to avoid it.

The ever increasing affordability of housing in Melbourne is causing some grief in the rental market. The landlords may be loving it as there are no shortage of potential tenants. This situation has inflated the rents of properties. I don't believe that the situation is isolated to only Melbourne, the other capital cities are also experiencing similar effects, especially in Perth and Brisbane.

Unfortunately, the rent for a property is almost dictated by how many people wants to live it. In today's rental market, I would not be surprise if the rent is higher than a mortgage's repayment.

In the Frankston area, just a short drive from where I live, the landlords are being opportunistic in trying to extract as much rent as possible. This article from the local paper discusses the sad state of affairs.

So, if you are renting, what you do to help with the rising rent rates.

1. Move the an area with cheaper rent. Some suburbs has lower rent rates than others for many reasons. If you are happy with the reasons on the lower rent rate, consider moving to these locations.
2. Negotiate with your landlord. Most land lords are reasonable people, and an attempt with communication with them shows that you are willing to discusses the crisis with them. In most cases, most land loads are happy with a good tenant with a reasonable rent rate than a bad tenant at a high rent rate.
3. Know your tenant rights. If your land lord is not is reasonable, have a good knowledge of what your rights are. For rentals in the state of Victoria, you can contact the Consumer Affairs for more information. The are similar government bodies in the other states an territories.
4. Consider purchasing a house. If the rent that you are paying is so high that it almost as high, if not higher, than a mortgage repayment, then consider purchasing a house. In today's market where new house purchases are declining, the developers are extremely accommodating in the terms and conditions. Have a chat with them. Be aware that purchasing a house is not something to be entered into lightly, it is littered with traps and pitfalls.

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Happy New Year

Happy New Year!

Today is the new day of the new financial year in Australia. For most of Australian businesses and general public, the financial year ends on the 30June, and the new one starts on the 1July.

So what can be expected for this financial year, from my perspective, I can't see as many positives as I can see the negatives. Lets start with the negatives.

• The interest rates are expected to rise. My prediction is that mortgage rates will hit 10% by the end of the year. Recent reports of the slowing down in the economy such as spending in retail and housing will probably stop the interest rate from going much further than 10%.
  
• The petrol prices will continue to increase. Even though there was a recent conference among the oil producers to help reduce the cost of oil, I feel that the days of seeing the pricing at around $1.20/ltr are long gone. I expect to see the price of unleaded petrol to hit $2/ltr by the end of the year.
• Australian manufacturing industry to slow down dramatically. The current Australian economy is really riding on what the land can provide, more correctly, what the underground can provide in mining. Another industry such as manufacturing, services and farming will probably suffer due to environmental reasons and economic reasons. Personally, I would like to see the manufacturing industry enjoying the same economic boom as the mining industry, I don't think it will happen in the near future.
• Due to the on-going drought and increasing fuel pricing, the groceries prices will be increasing.
• Our superannuation fund is on its way to give one of the worst return ever. We can blame the US subprime problems for this.
  

Feel free to shoot me down in flames with these predictions, and I hope that I very wrong with some of these predictions.

A couple of the positives are

• The personal tax rates have changed, which means that you should be getting a little bit more in your pocket each payday.
• With the increase of petrol, focus on alternative energy are being looked at in a serious way. So hopefully, a commercially viable solution is not too far in the future.

With those predictions, let's try make the best of the new 08/09 financial year by viewing the negatives as problems which solutions are to be created for, especially on a personal finance level.

Quick post towards the end of Apr08

I haven't been keeping up with one of my goals for 2008, that is to post at least articles per week on this blog. There are many things to talk about, like the inflation rate has just hit 4% today, the level of mortgage stress is at a record high and how the fixing our interest rate is working out for us.

Things on the family front and work front have been extremely busy. My wife is about half way through carrying our second child, and project deadlines are looming at work!

Hopefully, I will get back to regular posting sooner than later. However, if any one wishes to do any guest posts, drop me an email via tehn.yit.chin@gmail.com

CoPF #147 - Q1 financial advice edition

Carnival of Personal Finance #147 is up at MoneyNing. Many great articles, some of the ones that caught my eye were...

• Wide Open Wallet - The pawn shop are thriving. This article gave a scary thought of pawning items that are financed. I guess when folks are desperate, crazy things are done to get money.
• You might as well burning $5! - The $37 Latte. This a great article on keep track of you finances.
• On Financial Success - Can we afford college? A good range of tips on how to go about getting a university/college fund ready for your kids.

My recent article on you are only worth at market value was also included. Many thanks to MonyNing. Happy reading!

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Did Earth Hour 2008 really work?

Well, Earth Hour 2008 came and went last weekend. I even wrote an article about it. Unfortunately, I was not able to participate in it as our 2 year old was caught the croup a few days previously and needed some attention.

How did it go for you? Even though I was not able to participate in it, it has made me more aware of the my usage of electricity. This also goes for the other resources such as water, gas and food. So Earth Hour wasn't just one hour for me, it is going to be an effort for me to apply it to my day-to-day living.

The one thing that got me beat is the amount of energy used to increased the profile of the event, to create the infrastructure to support the event and to celebrate the event.

Earth Hour's blog has figures quoting a reduction of 264MWatts in Toronto, Canada but it hosted huge public music/party for the event. It also has figures about Bangkok, Thailand saving 73.34MWatts.

I can't help but think that if we all just stayed at home and turned off the lights, it would have been an even more significant savings. A cynical person would think that many people got into the spirit of Earth Hour because it is the in-thing to do for the environment. Think about it, imagine the public music event in Toronto, what kind of infrastructure is necessary to support it, and the energy consumption of that infrastructure.

Am I just a bit too cynical about this type of events?

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CoPF #146 - Online Broker Tip edition

The 146th edition of the Carnival of Personal Finance is up over at Stock Trading To Go. I was fortunate enough for my post on revisiting my superannuation to be included among the many fine articles.

A selection of the articles are:

Dreaming of Ferraris - Personal Benefit of Savings
Blunt Money - The high cost of inertia
The personal financier - How to make sure that this is your dream home: 7 Practical tips
Smart Easy Money - If you build it, they will come
Mommy gets paid - Friends and Money

These are only a small selection of the many articles being hosted. Go and check them out.

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You are only worth at market value

Back in 2002, my wife and I went into semi-retirement. Well, more really like putting our working lives on hold and recharging our personal life. Since graduated from university in 1992, I have never had an extended period of holiday or even a time to reflect on my life and where I want to head towards.

At the start of 2002, I told my boss that I am resigning my position, I told my family that I am selling the house going traveling around Australia in a caravan. Their reaction was a bit of disbelief and telling us that we are quite mad.

So we sold the house in Feb 2002, paid all our debts and put any remainder into a term deposit.

We reached Brisbane after six months of a traveling up the east coast of Australia from Melbourne. I started to look for a job and ended up with an offer of a job that I thought would paid a bit more. They offer me $45K, and I rejected their offer. That is one of the biggest mistake that I have ever made!

I rejected their offer because I believe that I am worth more than the offer, and my mistake is that assumption. The reality of what I am worth is that I am only worth as much as the job market is willing to pay for my services.

You may be the the most talented engineer in the country that is worth $150K, but if the hiring companies can only pay $50K, that is all you are worth.

What do you do if you think you are worth more? Well, the following may be worth attempting.

1. Wait for the job market to evolve. The job market may change so that your position is worth more, but are you able to wait that long?
2. Move to another city where the job market is willing to pay more. Many people do this, think of how many country folks come to the city for the bigger salary.
3. Switch profession. If a different job market pays more, consider switching. However, the time it takes to reach the equivalent career level may take a few more years, and then the job market may change again!

We finally returned to our working lives when our travels brought us to Adelaide and I got a position to work in Singapore for three months. My wife enjoyed it very much, and I enjoyed the food very much as well ;-)

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The rules of buying

My pair of shoes are just about to die, it was then that I realised that the last time I bought some shoes was back in 2003! I haven't even bought a pair of cheap sandals for the beach since 2003.

There are quite a few reasons why that is, but I believe that the main is that I purchase high quality and robust shoes.The last three pair of shoes that I bought were Birkenstock shoes. These shoes are build to last! These shoes are not the cheapest nor are they the most expensive. However, I believe is spending that little bit more to ensure that I get good value for money.

Applying this concept to other products, such as kitchen appliances, clothing and other house hold items, have allow us to not purchase many high price. However, with many of the electrical products emerging from China and India, their quality are questionable.

So my rules are

1. Buy the best that you can afford. Everyone has a budget on what they can afford, so buy the best that you afford. Some of the best quality products are not even the more expensive products.
   
2. Know what makes it a good quality product. For example, a good pair of shoes that last a long time has real leather uppers and eyelets that doesn't cut the laces. For high price items, I would spend a few weeks researching on the product. The car that we purchased, we spend six months researching it.
   
3. Dare to be different. Not purchasing the same product as everybody else allows you to choose from a larger range of products, however do the research on why the popular products are popular. They might actually be of good quality.
4. Talk to the experts. The majority of the items that we purchased, we have no idea on what qualities we should be focusing on? Is the fit of a shoe, or how breathable the upper that is the most important. I have no idea, so I talk to a few of our friends whom have worn Birkenstocks before.
5. Make sure that it has a good support system. If the product does need to be repaired, it is supported by a good warranty return system with a quick repair time. Is the warranty period reasonable?

What are some your rules when it comes to buying?

Photo credit: sundeip arora
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Earth Hour 2008

Earth Hour began in 31 March 2007 in the Australian city of Sydney at 8pm to 9pm. The idea is for as many people as possible to stop using electricity for one hour, such as turning off their lights or switch their appliances at the power point, for one hour.

The effect was startling. For that one hour, it reduced the power consumption in the City of Sydney by 10.2%! That is only in one city. In 2008, Earth Hour is going global!

29 March 2008 8pm - 9pm is Earth Hour 2008.

Earth Hour 2007 showed us the following.

1. It shows how much energy is being wasted. The majority of the time, we just leave a light switch on because we can't be bother to switch it off. Just switch off when you are not using it. I usually leave my computer on at work when I leave my desk at the end of the day. I need to make a conscious effort to switch it off when I leave, especially over the weekends.
   
2. Stand-by power is really wasteful. Stand-by power is when the appliances are still be left on when you 'switch it off'. For example, when you switch off the TV, it is still being powered up. The TV is still powered up to do things like being able to be switched on via the remote control, or remember its last settings. To really switch it off, flick the switch at the power point.
3. Wasting energy is also wasting money. If you like wasting energy, then you must like throwing money into the bin as well. The effect to your wallet is just the same. Don't do it!

Please consider support this. You don't really have to register to join in. Just switch off the power on the 29 March 2008 at 8pm, and consider doing it every week. It will make a difference.

Earth Hour is supported by WWF, (no, not the wrestling guys, these are the panda guys!).

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superannuation revisited

I have just received my annual statement for my superannuation fund and it has triggered some rethink on my superannuation strategy. The downturn in the stock market this year have probably put many superannuation funds in a similar position. Lets start by looking at some of the figures that has caused me to do the rethink.

Account balance change: 7.12% on the opening balance
Return on Investment: -2.58% of closing balance
Management Fee: 16% of contribution

Looking at each of these figures in turn.

Account balance change: This represents the raw change in my account balance. A positive figure here is an absolute must as it indicates that I haven't lost all of the my contributions to the falling investments, fees etc.

Return on investment: I was expecting this figure to be a negative value. We can look across the Pacific Ocean towards the American economy. I actually thought this figure would be a lot worse, I expected it to be around -5% to -7.5%. I was quite relieve to see this figure of -2.58%.

Management Fee: This is how much I am paying my super fund to management my account. Now 16% of my contribution goes off my superannuation's wallet. When I did the calculation and realised what I am paying, I was pretty upset. This figure is what actually drove me to investigate other superannuation fund and how I can maximise the investment.

At end of my calculation, it came down to the following strategy.

1. Lowest fee structure. Two reasons here, firstly minimising fees is one of the very few items about the superannuation fund that can be influence so make it as effective as possible, secondly, I want to maximise the magic of compounding interest.
2. Online access. My current superannuation fund does not allow online access. So its performance can not be analysed in a timely manner.
3. Good insurance policy. Most superannuation has an insurance component, we need to ensure that the policy is suitable and covers all the family members.

What are some of yours?

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Lowest taxable income in metropolitan Melbourne

The Australian Tax Office has just released some tax statistics for the 2005-2006. Although the data is a few years old, it makes for interesting reading, in particular the data on personal tax.

One of the statistics that I noticed was that Frankston North has one of the lowest mean taxable income at $33,638 for each taxable resident.

We lived in Frankston North for about two years, just before we shifted to our current location. I must say that during our time in Frankston North, we can sense that the place is not a wealthy suburb, but from talking to our neighbour and the other Frankston North residents, the ambiance certainly does not give it that sense.

Living in such a low income area does have its concerns. We saw a lot of the typical events that you would expect to see. For example, we witnessed a police car chase in a residential street, regular thieving and stealing at the local shopping centres, and the occasional violence. We were always on our toes, trying to keep as safe and secure as possible.

Having said that, I am totally convinced that the majority of Frankston North residents are everyday people trying to make ends meet. I wonder if how long before Frankston North begin to move up the scale, if it ever will?

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How to keep cool in a heat wave.

Today is the first day where the night time temperature has dropped below 25 degC. The last few days in Melbourne has the day time temperatures in the high 30s. I think it peaked at around 40 degC yesterday. The nights have been quite unpleasant.

Apart from giving more money to the utility company by using the electricity to run the air conditioner or the fan, I was trying to think of what we can do to keep ourselves cool, in a frugal manner. These measures need to be immediate effect, so things like checking that the insulation in the roof is adequate is out of the question as it cost too much and it doesn't happen overnight.

• A visit to the beach - When the sun has gone down, visiting the beach to lap up the evening sea breeze has to be one of the best way and cheapest way of cooling down, not to mention the evening sunset is always nice to look at.
• Closing all the blinds on the sun side of the house, and opening the windows on the shadow side of the house - This was the effect of shielding the direct heat source (the sun) from heating up the house. The open windows will allow any cool air from shadowed side to enter the house.
• Drink plenty of fluid - Keeping the body hydrate also allows the you sweat. As the moisture evaporates from your skin, it has a cooling effect.
• Wear light clothing - This is a obvious one. Allow the the body to expend as much heat as possible by not insulating it with any thick clothing.
• Avoid drinking coffee - Caffeinated drinks like coffee dehydrate the body (this could be a myth, as by googling was able to provide a conclusive answer)
  
• Visit the local shopping centre - The local shopping centre is usually air condifiioned. The kids can played at the local indoor play ground. However, be careful not to be tempted by the shops around!
• Visit the local library - The library is also usually conditioned. The books and activities are also educational and functional as well.
  

What else would you do during the many days of high heat? I would love to hear anyone from Adelaide where it recently endure 15 days of temperature of 35 degC or more. It peaked at 40.5 degC.

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Cloth for baby

To be sure at the CoPF, to be sure...

I could almost brew a keg of green beer after being included in the St. Patrick's edition of the Carnival of Personal Finance #144 over at beingfrugal.net. Lynnae did a fantastic job collating all the blog posts and hosting them.

Some of my favourites are

• Know The Ledge - 10 ways to find more money. I especially like the wise and 'fun' advice in tip#10.
• The Dough Roller - 0% Balance Transfer Credit Cards: The 10 Commandments of Responsible Borrowing.
• Online Savings Blog - How to Get a Raise at Your Job

Thanks to Lynnae for including my post on How will my financials change when No.2 arrives.

Other than those articles mentioned, there are plenty more quality articles at the carnival.

If you are a PF blogger, consider submitting an article into the carnival at Carnival of Personal Finance.

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Homeless at the carnival
Carnival of Personal Finance #140 - Prison Break Edition

The upside of rising interest rates.

While I was doing some on-line banking the other night, I thought I looked at what the interest rate is on our BankWest account. It paid 7%, which I thought was pretty good. Hmm, I better check out their other products. Their rates on their personal accounts makes interest reading. Here are some highlights

Kids bonus saver account - 10%
Regular saver account - 9%
Children savings account - 6%

10% is an amazing interest rate. This account has bonus interest rates associated with it, but it has some conditions. $25 - $250 needs to be deposited on a monthly basis, and no withdrawal is allow. If either of these two conditions are broken, the interest rates drops to 0.01%. Oh, this account must be linked to a Bankwest Children Savings Account as well.

My home bank, ANZ, also has similar interest rates for their saving accounts, although not as impressive. Some ANZ's highlights are

ANZ Online Call Account - 7.75% for balances of $2000+
ANZ Youth Account - 4.50%

While I was looking through ANZ's interest rates, I noticed that the interest rate on their 4-year interest rate for home loans has increased to a whopping 9.4%. Their home loan variable rate has gone past double digits to 10.7%. Ouch! I think that we were very lucky to lock our interest rate when we did.

The interest rates in Australia has been consecutively increased since the first increase on 8 May 2002. The current cash rate as set by the RBA is 7.25%, starting from a low 4.25% in 5 Dec 2001. While I wish that interest rate would be on a downward trend, I am also glad that the banking folks also provide a balance by increasing their saving accounts, sort of.

photo credit: svilen murad
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Interest rate fixed
Fixing our home loan interest rate
Do you know how much of your house you own?

First PPP post

This is my first sponsored PayPerPost post. After looking through the list of opportunities available to me, this is the only one available. What I like about it is that it doesn't mind if the post has a positive comments or negative comments.

So what this post is about is tell the world that I have signed up for PPP, what my initial thoughts were, what I am going to do with the money etc.

Well, the one thing that I like about it is that there are opportunities available that allows negative comments as well as positive comments. I would prefer these opportunities rather than the ones that are specifically looking for positive comments.

The other thing I am surprised about the opportunities is the sponsored prices. There are some opportunities worth more than $100, however these opportunities are only available to blogs with high google page ranking.

The things that I don't really like about PPP is that depending how you write it, the articles could look like paid advertisements. This is definitely not something that I want to head towards. (one of the reasons why I am only going for opportunities that allow negative comments). I also want to write the articles in such manner that it does not detract the current readership.

It also has a blog for those who wants to keep up with what is going on behind the scenes at payperpost.

What am I going to do with the money? We I am going to use it to pay for those annoying weekend surcharges at the local ice-cream stores. (thanks Andy :-).

So far, it is too early to tell if PPP will work out for me, however, even though it is sponsored, I won't let it get in the way of an unbiased opinion.

Be careful of the public holiday surcharge!

Today was the Labour day holiday in Melbourne, and the Melbourne Motor Show was on as well. So this morning, when we decided on to do, we decided to visit the motor show and spend the day in the city. The weather was nice, and warm. My son had a terrific day at the motor show, he wanted to jump into every car he saw and drive it away! He has a great imagination for a two year old.

To finish the day, we bought some ice-cream. When I am paying for it, I fail to notice the sign indicating that a 10% surcharge is applicable because of the public holiday at this ice cream shop. At first I was a bit annoyed that I did not notice this sign, but paid for the ice cream and enjoyed it with my family along the Yarra River. I also noticed that not all the shops are applying the public holiday surcharge.

Later today, I thought about it  a bit more, I realised what really annoyed me was that the sign on the ice cream store also state that the surcharge is also applicable on weekends as well. I have a real problem with the fact that the cost of an ice cream is cheaper on weekday that it is on a weekend. I wonder how many other ice cream or side street business operate this way?

In the future, I am going to be more wary of the what I am really paying for, in particular of the surcharges. By the way, if the surcharges are not displayed, the shop could be applying the surcharges in an illegal manner.

I have just been accepted by PPP

Just got an email that I was accepted by PPP. I recently blogged that I was rejected by PPP for some superficial reasons. I was stumped and was about to give up investigating it more. The next few days, Andy from Finance Viewpoint left the following comment.

PPP does work, sometimes it takes a while. Install the tools they say and re-apply after a week.

I am an Aussie blogger and here is a referral link others have used to sign-up : http://tinyurl.com/2995wq

I have 2 blogs on this program and it earns me about $30 p/month. Have to be careful with the sponsored posts as most of the advertisers are American.

I thought, what the heck, I just spent a small amount of time and do what Andy suggested. Lo and behold, I received an email from the PPP that my blog has been accepted a few days ago. The only thing that I changed was to install the tools.

I guess my next step is to decide which items I want to write about. Stay posted.

By the way, you are welcome to use Andy's referral or my referral, http://tinyurl.com/2bxo7b


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I have just been rejected by PPP.

Public Housing and the homeless

My recent participation in the CoPF #142, which has a homeless theme, has caused me to think about what kind of homes are available for the homeless.

To me, homeless means a few thing, but it boils down to not having a place where my family and I can feel safe and secure. The difficulty is obtaining that place, either buying or renting a house. The rental market in Melbourne is red hot, and the affordability of buying a house is at record low.

The Victorian government tries to ease the situation by provide public housing. Public housing is not free housing. Essentially, it is houses that are the Victorian government rents out the public. The differences between public housing and private housing is the criteria which the house are rented.

If you want to rent a house privately, prove to your landlord that you can afford to pay the rent, and not damage the property while you are renting, and the property is yours. The rental rate is set by the landlord. The rental market is so competitive that I have heard of landlord auctioning off the leases.

With public housing, you will need to meet the following criteria to be on the waiting list for a suitable housing to be available. According to this pdf document, there are close to 35,000 people on the list!

• not exceed the current general public housing income and asset eligibility limits.
• live in Victoria.
• not own or part own a house, unit or flat.
• have Australian citizenship or permanent residency status.
• repay any money that you still owe from a previous public housing tenancy or Bond Loan.

If your situation is extreme, you can be apply for early housing where, if suitable housing is available, your application will have a higher priority. These situation includes recurring homelessness, supported housing and special housing needs.

The key thing is that the rent rate is set at either market rate or rebated rate, whichever one is lower. Market rate is the going rate for a similar property in the private rental market. Rebated rate is calculated at 25% of the combined household income.

The Victorian Government's Office of Housing has a great website that has a lot of detail information.

My closest experience with homeless was when I sold up and went traveling around Australia about 5 years ago. I know that what I did was not even 5% of what a homeless person would experience because being homeless is not just a physical thing, it is also a mental state and also an emotional state. As I traveled around the country, I met many others in makeshift shelters, transient accommodations and hostels. It provided me with an opportunity allow me to talk and to get an indication of their lives. In some ways, I feel encouraged that they are able to survive on a day-to-day basis, given their extreme conditions. On the other hand, I also felt angry and disappointed that in this country that we are not able to do more for the homeless.

Photo credit: Piotr Ciuchta
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Would you miss a meal to pay your rent?

Homeless at the carnival.

CoPF #142 is up over at The Bag Lady. The bag lady chose a very tough theme, the homeless.

Some of my childhood was spent growing up in Malaysia. Back then, Malaysia was a third world country pretending to be a country in the same company as Australia or England, pseudo wealthy. One of the most striking images while I was growing up was seeing the many homeless people on the streets of Kuala Lumpur. Typically, when my parents drove through the city at night on our way home from the market, I would frequently see many people bedding down to sleep in cardboard boxes as their makeshift homes. I would also see many people begging in the streets, searching for food among the street rubbish bins or trying to keep dry during the monsoonal rain storms. Those images has certainly stayed with me for many years, and always reminded how fortunate I am to have the life that I am living.

Some picks from the among the many good articles from the carnival are:

Canadian Dream asks How Can A Person be 'Debt Free' with a 300K mortgage? I sort of agree with this article, but only if the discussion is limited to mortgages. There is such a thing as good debt, just ask any business starting up.

DebtBeater talks about his moment of truth in My Financial Epiphany. It is a great article and reminds us of a time when we thought that things will never go bad.

The Digerati Life gives some wise warnings in They Want To Make Money Fast.

A big thanks to The Bag Lady for including my discussion article on Would you miss a meal to pay your rent?

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Carnival of Personal Finance #140 - Prison Break Edition

How will my financials change when No.2 arrives?

Preparation for your first child is not a task to be take lightly. Amount the physical needs of the child, their emotional needs as well as their financial needs must be catered for.

Is the preparation for the second or the third child any different from the first child? Trent at the The Simple Dollar has some nice advice on how to prepare for the second arrival in a frugal manner.

For one thing, the on-going family expenses will be increasing. Therefore, planning on to the deal the change is key. Apart from the obvious items such as the medical bills, clothing etc, it is worthwhile to investigate the other part of your life that will need to be change and how much that will cost to change it.

1. If your car is not of the right size, you may need a purchase a larger car. It is also true that the current house you are in may not be larger house enough.
   
2. One of the parents being a full-time home maker. This will affect the household income. Being a full time home maker is a very personal decision, but sometimes the key reason may be due to financial reasoning. EG, unable to afford to put that many child in child care.
   
3. The work hours of the bread winner may have to be reduced to give more support to the full time home maker.
4. Increase in your life or income protection insurance, this usually means an increase in the insurance premiums. I believe that this particularly important as the number of family members has increased and the new addition's welfare must be looked after.
   
5. Ensure that your emergency fund is changed to ensure that it covers the new arrivals.

Photo credit: Joe Zlomek
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What are you really saving for?

Carnival of Personal Finance #140 - Prison Break Edition

Oops, it appears I totally forgot that the Carnival of Personal Finance #140 went up over at The Financial Blogger

Some of my picks are

Move-to-Portugal is talking about Re-mortgaging

The Great Money Challenge provides the top 10 things to he does to save money

Finance Blog gives a list of 10 Financial products to avoid.

I was fortunate enough for The Financial Blogger to include my update on fixing the home loan interest rate.

Share your support and visit The Financial Blogger for more fantastic PF articles.

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Carnival of Personal Finance, #121

Would you miss a meal to pay your rent?

The Age newspaper reported that some people are forgoing some of life necessities to pay their rent, in some extreme case, missing meals.

Missing meals is pretty extreme, and I am the first person to admit that for some people, the situation is extreme and it does call for sacrifices such as missing meals. I am very fortunate that I am not in that situation.

However, I try to imagine myself in an extreme situation such as that, and imagine what I would do. Firstly, determine if I am actually in trouble.

1. I would draw up a very detail map of where our spending is. Currently, we have a pretty good idea of where our money are going but we don't have a precise knowledge of where they are. By having a very precise view, we are counting the very last cent and accounting for its spending. The tools to accomplish an notebook to take a note of all your spending, and strict discipline to ensure that a log of the spending is kept. Every cent has to be accounted for!
2. From the detail plan, I would classify which of the spending are "must have", "should have" and "nice to have". Food, rental and utility bills falls into "must have". Newspaper and the morning coffee at Gloria Jeans are "nice to have".
3. Evaluate the items in the "must have" to ensure that it is actually a "must have".
4. Work out what income we have to pay for the "must have" expenses.
5. If the income coming in does not cover the expenses, we are in deep trouble.

Once we have establish that we are in trouble, we need a plan. Perhaps the following would work.

1. Inform the creditors that we are having problem paying the bills as early as possible, and attempt to negotiate a better deal. This is a definite must for the creditors providing the "must have" products and services.
2. Inform the family that there are going to be some tough time ahead, and prepare themselves for the tough times. However, tell them that there is a plan in place and I am committed to meeting the plan.
   
3. Looking into supplementing the current income, probably with a second job.
4. Over the recovery period, keep evaluating the items under the "must have". If the items ever get classified as a "should have" or a "nice to have", we are going to stop doing it.
5. The most important part, have a time frame which you can get out of trouble. An open ended plan is difficult to achieve as there isn't any targets to aim for.

At the end of the day, I can not begin to even appreciate the situations some of the families are going through and coming to a decision that they are going to miss a meals here and there.

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20th Teddy Bear's Picnic

If you from the Frankston area, or are thinking about visiting the Mornington Peninsula this Sunday, consider visiting the 20th annual Teddy Bear's Picnic. It is conducted by the Frankston Toy Library. The library service is something my family uses quite a bit and wholesomely support. It is a great day, and your kids will guarantee to have a great day.

The details of the picnic is

Date: Sunday, 24 February, from 11:00am-4:00pm
Location: Frankston's George Pentland Botanic Gardens, corner Foot and Williams
Cost: Entry is $2.50 each with children under 18 months free
Map: here

If you wish to give some support to the wonderful services that the Frankston Toy Library has provided for over 30 years, consider attending the picnic.

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Frankston Toy Library, a wonderful service

Interest rate fixed

Today was day where a load just came off my shoulders. We made a decision to fix our home loan interest rates for four years.

The way we see it, over that four years, we know exactly what our repayments are going to be and we will also be protected against the any interest rate increases. However, we will also miss out on any interest rate decreases as well, but with the current economic situation, I don't think that interest will be returning to the 5% mark in the short term.

The current interest rate of our current home loan is 8.42% and the fix interest rate what we should be on is 8.54%. This small increase of 0.12% is certain to be smaller than any interest rate increase that the RBA is going to impose.

We also decided to stay with the same bank as changing banks will incurred too much renegotiation fees. By breaking our current mortgage and going to another bank, we are essentially borrowing on another home loan to pay off our current home loan. Some of the major renegotiation fees components are:

1. Mortgage insurance as we will be borrowing more than 80% of the value of the property. - a couple of thousand dollars
2. Establishing fee with the new bank - usually about $700
3. Legals - $200
4. Contract breaking penalty with the old bank - about $700
   

We estimate that it would cost at least $3000 in fees.

By staying with the same bank and switching our home loan from its current terms and conditions to a fix interest home loan, we only had to pay a renegotiation fee of $200. The only part of the loan that change is interest rate. The term of the loan did not change.

I read today that RBA was actually considering that this month's interest rate should be increasing by 50 basis points instead of the 25 basis points. With news like that, I shall sleep a lot better now that our home loan interest rates are fixed.

I have just been rejected by PPP.

After reading how krystalatwork is back on the PPP bandwagon, and how PPP is working out for her. I thought I sign up and give it a go. It seems like a good opportunity to write a couple of articles and earn some money doing it. So I signed up via krystalatwork's referral.

PPP is PayPerPost. I essentially write a sponsored post about the sponsor's product.

Well, my blog was rejected. At first, I was rather disappointed, so I read the reject letter. This is what it had to say.

In order to be accepted to the PPP Marketplace, you blog must be at least 30 days old with 10 pre-existing posts written within those 30 days.

My first article on the blog was on the 16 April 2007. Since then, it has an average of 11 articles per month. Jan and Feb has seen 21 articles so far.

In addition, your posts must be dated and your blog must be written in clear, understandable english with a readily available and easily navigated chronological archives.

All of my post are dated as it is the standard blogger behavior. I believe that the english that I use is clear enough. The archives are also standard blogger behaviour, displayed in an easy manner.

Blogs must be made up primarily of posts that are at least 3-5 sentences of original content. We do not accept blogs with non-original content, blogs that have content primarily reposted from other sources such as recipes, jokes, poems, song lyrics or product reviews , vlogs, listing directories, blogs kept solely for pay, or blogs with mature content or excessive foul language.

My blog could be in breach of this as I do share the link love around, however I doubt if my blog is consistently doing the link or repost of non-original material.

Although your blog isn't eligible for the Marketplace opportunities, you can still receive offers directly from advertisers by installing the PPP Tools and PPP Direct badge on your blog.

I guess I should be grateful for this opportunity.

I get the feeling that because my blog does not have high traffic, they have restricted the marketplace opportunities from me.

In someways, PPP may not be the right direction to go on this anyway as it may show bias on the products, can anyone say "cash for comment?"

photo credit: Martyna Adamczyk

Link building meme....

I just got tagged in a link building meme Diet Debter.

Simple but strangely addictive. I tagged 5 randomly chosen blogs, write an article about it. If you are one of the five that I tagged, I hope that you shall on-tagged five more randomly chosen blogs, writing an article, and so on and so on. I think you get the idea.

However, in your article you have to include all the links here and add to the five blogs that you were part of.

The Strategist Notebook ~ Link Addiction ~ Ardour of the Heart ~ When Life Becomes a Book ~ The Malaysian Life ~ Yogatta.com ~ What goes under the sun ~ Roshidan's Cyber Station ~ Sasha says ~ Arts of Physics ~ And the legend lives ~ My View, My Life ~ A Simple Life ~ Juliana RW ~ Mom Knows Everything ~ Beth & Cory's Mom ~ A Mind Forever Voyaging~ enjoying the ride ~ Jennifer's thoughts ~ Mom of 3 Girls ~ Amanda ~ Don't Make Me Get The Flying Monkeys ~ ExPat Mom ~ Just Jessie ~ Wilson Six ~Krisitn ~ Nuttier Than You ~ Shonnte ~ Summer's Nook ~ Laura Williams Musings ~ Melissa's Idea Garden ~ Confessions of an Everyday Housewife ~ Blah Blah Blog ~ Stop the Ride! ~Soap, Blings & Girly Things ~ It's All for the Best ~ Keeping Feet ~ Junky Love in Freehand ~ Getting Out of Debt ~ Free From Broke ~ Money Matters ~ Arohan's Investing Life ~ My Investing Blog ~ Finance and Fat ~ Iowahippiechick ~ MakingMoneyJournal ~ Cathlawson.com ~ Life Liberty & The Pursuit Of Money ~ Making Cents Of Debt ~ DebtDiet ~ My Journey to Eliminate Debt ~ Ugly Debty ~ Last In Line ~ Give Me Back My Five Bucks ~ Cheap As Chips

I feel like I am part of the chain tag, sort of using something evil for the something good!

All right, I am going to tag the following blogs

• Embedded in Cork
• Lazy Man and Money
  
• ScottBerkun.com
• Plonkee Money
• Poorer Than You

Quick hot Sunday night post

Just a quick sunday night post to give a shout out to Louise at My Journey to Eliminate Debt where she is running a contest to write the winner a kick-ass resume and a job-wining cover letter. (OK, those were my adjectives not Louise's).

So if you are currently looking for a job and have posted on Louise's blog previously, do yourself a favour by reading her excellent Successful Job Application series of articles, and enter her competition.

Don't lock in your rates!

As I was doing research on whether fixing my home interest rate is a good idea or not, (as in this post and this post), I came across this article on www.domain.com.au which has a 5 point attach on the rising interest rates.

I particularly unimpressed with their point #2, which says.

If you are tempted to lock in your rate - don't; it's too late. The time to fix is when rates are on their way up, not when they have already increased 11 times. While rates may go up once or twice more, by the end of the year slowing global growth on the back of the subprime crisis should force them downwards again. What's more, at the very time borrowers might feel panicked into fixing, banks have been quietly putting up these rates such that for the first time in years the average fix is higher than the variable rate. Cynical indeed.

Those whose finances really couldn't cope with one or two additional rises could consider fixing for a maximum of one year - but lock in for longer and you risk being stuck for years paying more than you need to.

I am truly amaze that it is advising people to not fix their interest rate as it is already too late. For some it may be too late, but rather than just give a blanket advice of not fixing the interest rate for more than one year, it should have provide some advice on doing the calculations to determine if fixing the interest rate is going to work out for you.

It is also pure speculation that the interest rates will increase twice more by the end of the year and it is predicting that the interest rates will be going down again in about a year's time. This goes against the forecast by RBA, as reported by this The Age's article.

For me, if after doing the sums, I am able to save some money or remain status quo, then it is worth while for me. Who knows when the interest rate will be decreasing, and more importantly, how many more increases will the interest go up by?

The other four points are worth considering.

Update on fixing the home loan interest rate

We visited our bank today to discuss about fixing our home loan interests, and the discussion brought up some interesting points. These items will have to be taken into consideration when deciding if it is worthwhile to switch our home loan. Some of these points are

1. If we fix all our home loan, we are able to pay extra into our home loan but only up to $5000 per year without being penalised.
2. If we are to just switch our current home loan from its current package to a standard home loan package, the cost is only $200. However, if we have opted for a split loan where a portion of it is fixed and the other is variable, it will be considered as a new loan and all paperwork will have to be re-submitted. This also means that a new set of fees will be applicable as well, including that bug bear mortgage insurance!
3. The point which mortgage insurance is needed is based upon the value of your property and the amount of loan. This is important as the value of your property may have change. This may not be applicable for us as our property value has increased since we moved in.
   
4. The current fix interest rate is 8.54% and 8.44% (depending upon the term of the loan), which is only 0.02% more than our current home loan interest rate. So if we lock it in now, we will probably not notice any affects on our repayments.
5. The actual interest rate on your fixed interest rate home loan is the rate at the time of execution of the loan by the bank. What this means is that if the fixed interest rate changes from when you signed the papers to when bank accept and counter signed your signature, the new interest rate will be applicable to your home loan.
6. Our bank has effectively discontinue our home loan offset account as we need a minimum balance of $5000 for it to be offset against. In some ways, this is like having $5000 earning 8% interest but we don't have $5000 sitting around, so this is not a good option for us. This also caused us to investigate fixing the home loan.
   
7. The banks may not change its fixed interest rates as the RBA changes its interest rates. The fixed interest rates are does not enjoy a high profile a such as their variable counterparts, so we don't hear much about it in the media when it changes.
   

Our next step is to talk to a mortgage broker such as Aussie Home Loans, and see what they have to offer. We have had good service from our current bank in the past, but at this moment and the current economic climate, we have to look at our bottom line and bank loyalty will have to take a back seat. If we have to change bank, we will do it.

In a prequel article to this, Sarah pointed to an article on www.domain.com.au that talks about how the banks plays with the fixed interest rate. Many thanks to Sarah

photo credit: Jan Stastny

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