Christmas 2007

The holiday season is just around the corner with a few days left to go.

First of all, I wish to thank all the regular readers and to those who have left comments, contributing the on-going discussion of personal finance.

Second of all, I must apologise to the same regular readers for the lack for articles over the last 6 or so weeks. My life getting complicated and blogging must take a back seat for the time being. However, a couple of updates.

1. We have change over to a new car, purchased on a novated leased agreement. The procees from the sale  of our previous car went to paying off all of our credit card debts (~$12K). The remainder was put into an online high interest bearing account.
2. Reduce our credit card liability by cutting the credit limit on the cards to $1000.
   
3. One of the complications was things are not being done, so I am trying to embrace the GTD or similar philosophy . Shall let you know how I go.
4. Start to think about schooling for our son, so expenses for these are sure to mount up.

Third of all, if you are able to spend some time with your love ones, please do so as they are the things that money can't provide.

Merry Christmas!

How to calculate how much of the house you own?

The other day, I wrote an article on visualising how much of your house you own. I am currently trying to work this out. The simplest method is take price you paid for the house, minus the mortgage you took from the bank to help you buy the house.

% house own = ( house price - mortgage ) / house price

If I am going to do this correctly, it will tracked over a long period of time, probably in terms of years, so we need to factor two major affects into the calculations.

1. Appreciation of the house price
2. The movement of the interest rate on your mortgage.

The appreciation of the house price should be adjusted on a yearly basis. However, if the area of your house changes considerably, like it did in the inner suburbs of Melbourne about 5 years ago when it changed by 20% per year, the adjustment period may need to be smaller, like every 6 months.

Do you know how much of your house you own?

House mortgage is one of bigger, if not the biggest, debts that most people get into. While reading the other blogs, I came across a chart at JosephSangl.com that shows how much of the house you own. Instead of a charting the amount left to be paid against time, an outline of your house is slowly filled in to indicate how much of it you own. As your payment gets better, the more of the house is filled it.

I am planning to do this as well, use green for bits of the house that we own and red for the house the bank owns.

It certainly put your house payments into perspective! Incredibly motivating.

LPG vs Petrol

We have chosen our new car, it is the Ford Territory. We test drive it the other day, and my wife loved it! I am unsure if the Ford Territory is sold in only in Australia, but basically it is based upon the Ford Falcon except it has a different body.

The Ford Territory can be fitted with a LPG option. With the current fuel pricing almost hitting the $1.50 per litre mark, having the car on LPG (at about $0.60 per litre) is certainly attractive. We considered it, but after closely looking the maths. It take a while to break even at the cost of it. Lets have a look at the maths.

1. The differential cost between the fuel and LPG is about $1 per litre.
2. The cost of the fitting the LPG option is about $3500 and $4800, excluding the government rebate.
3. The government rebate is $2000, which will being the cost to $1500 to $2800. We would qualify for a $2000, instead of a $1000, as this option is considered as an after market option as Ford does not recommend a LPG unit for the Ford Territory.
   
4. We will start to save money after we have used up 1500 litres and 2800 litres of LPG.
5. The Ford Territory has a fuel economy of about 12 litres / 100km. This works out to be a distance of about 12,500 kilometers or 23,0000 kilometers.
   

With the way, we drive our car, it will take about 2-3 years to reach that distance, which means that our savings does not really start until year 2009 at the earliest.

So we have made the decision to stay with petrol, and will revisit this option again later on.

SIDS and Kids VIC

A couple of blog post ago, I wrote about how SIDS and Kids VIC was promoting a discount coupons books run by the Citibook. Since then, I was contacted by Lisa Kennewell to highlight some inconsistency in my post. She indicated the following

1. The link to SIDS and Kids VIC was incorrectly pointed to the national group. The link to the Victorian group is here.
2. The link that I provided does not download a Citibook that would donate some money to SIDS and Kids VIC. The correct link is here. Citibook does not have any link to SIDS and Kids VIC version of their discount coupons. The link is to the SIDS and Kids VIC version of the Citibook is also available from this webpage as well.
   

By the way, it is very poor form of Citibook to enter into a promotion with SIDS and Kids VIC but don't do anything to promote it. You can't even find a link to it anywhere on Citibook's website! The only version of Citibook that it offers to download is GOLD104.3 version. I wonder if Citibook gets a bigger cut from this version?

I have also edited the inconsistency out of the blog.

Many thanks to Lisa Kennewell to pointing out the errors.

How we got a 32% discount on outdoor furniture!

We have an outdoor area just outside the back door which is disparately under utilised as it is quite bare without any outdoor furniture. So what do we do in this situation? We went shopping!

About half an hour drive away at Narre Warren, there is an large shopping area and includes many of the larger shops like Harvey Norman, BBQ Galores and Ray Tents city.

We finally arrived at one particular shop that specialise in outdoor furniture. We were looking for an aluminum framed furniture with cloth backed chairs. In one corner of the shop floor, we noticed a set for sale, it comes with six chairs and a glass table top. The whole ensemble fits our back area just right, and it is also on sale!

We started the bargaining process by asking if we are able to mix and match the table with a different set of chairs as we are not too keen on the standard chairs. Specifically, we pointed to set of wicker chairs that were also on sale.

The shop assistance went to the counter and came back with a price of $699 for the set. She told us that this is a special price to offload the last remaining stock of these items. We see this as an opportunity to reduce the price further. The RRP on these items were about $840. My wife and I had a chat about it, and asked if she could the deal at $600 as this was budget for the furniture. I was not too sure if she believed about the "budget" line, however after a few moments she relented but stated that this is a pick up price only. Sweet! We left a $100 holding deposit on the items and left the store extremely happy.

One week later, we received a phone call from the store manager saying that they could not find 2 of the 6 chairs that we ordered, and they will have to order it from their supplier if we still want to proceed with the order. Not wanting to let go of a good deal, I said yes. The store manager gave me a couple of choices.

1. pick the tables and the four chairs now, and return later for the other two chairs when they are available.
   
2. wait till the two chairs are available and pickup the all the items in one go.

I felt that there is an opportunity to get a bit more from the deal and suggest to the store manager that we will wait until the two chairs are available and that they throw in free delivery (a $45 cost) as this delay was caused by them. The store manager agreed after a few moments hesitation.

So far, we have gained a total of $295 or a discount of 33% on the package . That was a pretty good deal.

It gets better, the store manager rang my wife yesterday to inform us that they are not able to deliver the goods this week as their delivery truck is fully booked. I think this is their way of recuperating some cost. My wife stood her ground and told them they are not doing what they promise so they gave us a further $30 off the price. The cost of the outdoor furniture is now $570. At the end of the day, we prefer a further $30 discount instead of free delivery as we don't really pay for the delivery, but $30 is hard cash that doesn't get handed over.

So the final discount is a total of $270, or a discount of 32%. Still a pretty good discount.

citibook

Just a quick post to note that I came across citibook today. I read about it in the SIDS and Kids VIC newsletter.

It is essentially a website full of resuable discount coupons that you can print whenever you want. You can either browse through the affiliated business online or download the book which allows you to browse through it offline.

Citibook have two levels of discounts. The free discounts are usually between 5% to 50% off. The next level is the VIP discounts which will usually give your double amount discounts.

They appears to have a large range of businesses offering many discounts, from restaurants to car services.

By the way, if you are looking for a charity to support, consider the SIDS and kids VIC foundation.

Updated: Lisa Kennewell left a comment and posted the correct url that allow the downloading of the citibook that supports the SIDS and Kids VIC foundation. Link is found at http://www.sidsandkids.org/vic

Apologies to SIDS and Kids VIC foundation for not posting this link before.