InDenialMoney.com

This is a really interesting article from today’s paper in Australia.

Australian loan borrowers are not shopping around for the best deals so are paying a whopping $2.7 billion a year in repayments!

HOME loan borrowers are paying an extra $2.7 billion a year in repayments because they don’t shop around for the best deals.

Despite the major banks charging higher interest rates than smaller lenders, about 90 per cent of home buyers still choose one of the more expensive big four banks, according to financial research company InfoChoice.

We were in the exact same position about 5 years ago. I had taken out my loan with one of the big 4 banks way back and had never bothered to shop around since. I think part of it came down to complacency and some just plain laziness but I was with the one banking institution for well over 6 years.

When things got tough and we were struggling to make ends meet, MsPennyPincher started shopping around for a better deal. We saved a small fortune, cut years off our home loan and now own our home because of the decision we made.

In terms of finding a new product, most banks are more than happy to discuss you refinancing with them and will often wave fees to get your business. It is a competitive market and they need your business just as much as you need a loan.
In terms of effort, it is minimal compared to the long term benefits you can expect to gain.

“It is baffling that so many new homeowners refuse to look beyond the big banks and take advantage of lower rates from more competitive institutions.

“Claims that consumers have little choice but to go with the big four are wide of the mark.

“There is competition in the marketplace, it’s now up to the consumers to take responsibility for researching and locking in the best possible deal,”

Read rest of this article

Do yourself a favor and start shopping around, there is money to be saved!

It is amazing just how much we spend on food each week.

We all get into habits, whether it is buying certain brands or types of food each week or going out to dinner, our habits can really put us in a routine mindset. The big problem with this is you are not always fully aware of what things are costing you because it’s a routine or habit.

For many of us, eating out once or twice a week is fairly common and unless you keep a close eye on your expenditures it can be quite expensive.

Being organised in your kitchen can save you a small fortune. If you have planned out your meals in advance you are less likely to be stuck without a meal and left with only a dining out option.

Here are some ideas to cut your food bill.

1. Don’t go out to dinner for a month. I know this will be hard for many people but you will be amazed how much money you will save by avoiding restaurants and fast food takeout. After the month, see what your savings have been and try to limit your dining out to special occasions.

2. Check out the specials at your grocery store and create a menu for the week or month if you can manage it.

3. Try and use vegetables and fruit in season. Generally speaking they are cheaper in season.

4. Make a grocery list and stick to it.

5. Buy in bulk and freeze. We choose to buy in bulk and prepare meals that we freeze for a quick and easy dinner during the week. We estimate a weekly saving of around $40. Quite significant. Every dollar counts!

It all comes down to discipline. If you can manage that then you are well on your way to saving money and paying off debt!

We love coupons in our household. Receipts, brochures and other offers are all carefully checked and if anything grabs our fancy, quickly put in our bags for use when needed.

I’m surprised that more people don’t use coupons and started to wonder if it’s a case of laziness or embarrassment.
I can only speak from my own experience but I know when I was younger and quite silly come to think of it, the thought of using coupons equated to people thinking I had no money or that things were tight financially.

Whether it is age and wisdom or the fact that I love saving money, the social stigma I associated with coupons is no longer relevant.
I wonder how many people feel this way today? Is it possible that with times being tough people are changing their views or is it still an issue?

We save quite a bit of money on a variety of items by going through all the offers that come our way. We figure it is great for us and good for the retailer because we probably would not have visited them without the coupon offer.

A recent survey conducted in New South Wales, Australia shows that almost 30 percent of residents have no savings putting them at high risk during this recession. 

Another survey conducted in Western Australia showed that 27 per cent of their residents are in exactly the same situation.

60 per cent of those from NSW who took part in the six-month online study of 1144 people had not adjusted their finances in response to the recession, 29 per cent admitted they had no savings and 40 per cent saved none of their pay.

One in four said they saved less than 5 per cent of their pay, another quarter saved between 5 and 15 per cent, and just over one in 10 banked more than 15 per cent.

No doubt these sort of figures are not unique to Australia.

I find it astonishing that people are continuing to bury their heads in the sand. If you are employed right now you need to review your finances, start a budget and find ways to save money. The good times are over and we are all certainly paying the price for our indulgences. 

If your wage is covering your expenditures by just a little or not at all then you are going to have to make some hard decisions. The reality is right now you need to do whatever is necessary to consolidate your finances. These are uncertain times and you need to be prepared. Having no money to fall back on should you lose your job is not a good position to be in.

Take advantage of having a job and start saving your salary rather than spending it. And when things get better, keep it up rather than falling back into bad habits.

Across the US, the number of forclosures has skyrocketed. This Collective Journalism group investigation puts a human face on those affected by the housing crisis.

I’m a big fan of financial expert Suze Orman. She has a no nonsense approach when it comes to financial advice and sometimes brutally honest with people asking for help.

Suze has put together a recession rescue plan with plenty of helpful advice and links to resources. Well worth checking out.

cnn.com reports:

Do you know what your family would do if you lost your job — or worse, your home? Financial expert Suze Orman is ready to help you devise a recession rescue plan to survive — and possibly thrive — during this deepening financial crisis.

Families are also losing their homes at a staggering rate. Each day, another 10,000 homes are foreclosed, forcing families to turn to shelters filled to capacity. Left with no place else to go, some people are putting makeshift roofs over their heads in tent cities.

As the crisis continues, it’s easy to let fear take over — but it doesn’t have to. Orman’s five-step plan can help you rise above and take control. “There’s only one person that’s going to save you right now, and that’s yourself,” she says. “You have got to get on what I’m calling the ’save yourself movement.’ Each and every one of you has to have your own personal financial stimulus action plan.”

Step 1: Live on half

Whether you’re single or in a double-income household, Orman says you need to live on only half of what you’re used to — and put the rest in the bank. “If all of a sudden you find yourself without a job — or your partner finds themselves without a job — you are now going to have your income cut by 50 percent almost immediately,” Orman says.

Unemployment also only makes up about 50 percent of your income, Orman says. Oprah.com: How to apply for unemployment

By living on half now, Orman says you’ll know whether you can really afford to pay your bills if the worst happens. “When you are freaked out, that is not the time that you go through your expenses and go, ‘Should I cut here?’” she says.

Read rest of Suze Orman’s Recession Rescue Plan.

My Mum is a beautiful women who has a knack of buying the most amazing clothes.

She always looks great and regularly receives compliments on what she is wearing. On most occasions people are quite stunned when they ask her where she picked up that lovely jacket or gorgeous dress.
The thrift shop she replies. Most of the time people yell No! Seriously? No!

I admit to being one of these people. Growing up I confess to being a little embarrassed by my Mum’s thrift shopping. After all, only poor people need to go to a thrift shop. Why would someone choose to wear used clothes I wondered?

But as I’ve aged and become much more aware of finance and consumerism in general, I have started to see the light.

On a very recent visit to my parents home in the country, Mum suggested we go thrift shopping. I had no expectation of finding anything in the store but decided I’d tag along and see how Mum goes about finding such amazing clothes.

Let me just say, My Mum is the master of thrift shopping.

From the moment we walked in Mum was like a woman possessed. She immediately picked out a lovely blouse for herself and a beautiful jacket. She called out to me holding up the jacket. I nodded approvingly but then realized she meant it for me. I loved the jacket and Mum told me it was last seasons jacket from a well known clothing franchise that sold for $40.00. The price at the thrift store was a whopping $4.00. It had no marks on it and looked new.

I was a little excited by this time and thought that my new jacket would look great with a new pair of jeans. Mum quickly showed me the jeans rack and after a very short time I pulled out a lovely pair of jeans. I tried them on and they looked really great. The price for my new pair of jeans? $4.00. Again, no marks and I’d say hardly worn.

We went home with my new outfit that had set me back $8.00. I mentioned to Mum that I would head out the next day to find a nice black shirt to go with my jacket.
Mum disappeared and returned shortly after with a black shirt from another thrift store. It was brand new, never been worn and still had the original shop tags on it. She paid $3.50.

So for $11.50 I got a really great outfit. My opinions on thrift shopping have changed completely.

So too has MsPennyPincher. She picked up 2 pairs of jeans from the same thrift store for a total of $9.50.

We are now thrift store converts. You can buy some really great clothes at a fraction of the price and in most cases, contribute to the many charities who run the stores. The biggest hurdle is getting over your own preconceptions.

I’ve included a picture of my new outfit, I’m really happy with it!

Some sobering news this morning with figures showing an increase of home repossessions (foreclosures).
In New South Wales, some 300 homes are being repossessed every month despite huge falls in interest repayments.
About 20,000 mortgages are now over 90 days behind in repayments.

smh.com.au reports:

A GROWING number of NSW residents are on the cusp of losing their homes to banks and other lenders despite the steep fall in interest rates.

The number of repossession orders in the state dropped at the end of last year, as lower interest rates offered relief to borrowers struggling to repay loans, according to figures made public by the NSW Attorney-General’s Department yesterday. But that trend reversed in January, and consumer credit advocates blame an increase in joblessness.

Repossession writs are issued once a lender seeks an order from the Supreme Court to take possession of a property. If successful, the Sheriff’s office sets a date for the borrower to leave. If the borrower fails to leave, the Sheriff turns up at the house, signs the property over to the lender, and changes the locks.

Read rest of this article.

I read an interesting article this morning about a small Australia lingerie company, aussiebum who is riding high on the mistakes of lingerie giant, Bonds who recently revealed financial troubles and a planned move away from Australia.

So great has the backlash been with factory workers losing jobs and the revelations of the CEO and Executive’s massive pay bonuses (170% increase) that Australians are shunning the once Australian icon and buying merchanise from aussieBum, “Australian made by choice”.

That’s their new marketing campaign and it appears to be working with a 40% increase in sales.

There are quite a few interesting points to note about this story. The first - our absolute disgust at seeing CEO’s making any sort of money during these times, especially when they are laying off employees at the bottom end of the pay scale.

Secondly, it’s great to see a company posting increases in sales during such hard financial times. Even though consumers are being more mindful of spending money, they are prepared to invest in companies doing the right thing by it’s workforce and by the country.

We can only hope that aussiebum can take the proud mantle Bonds once had and be an Australian icon in years to come.

Small businesses should take notice of this story, opportunities exist for savvy operators like Sean Ashby, founder of aussiebum. You need to make yourself aware of what your competitors are doing and take immediate action to capitalize on their mistakes. In this particular case, Bonds made a massive error in judgement and I’m sure the people at the top are sitting quite uncomfortably - in their Bonds undies ;)

Wesfarmers, owner of retail groups including Coles and Bunnings plan to employ more staff this year, bucking the trend seen by other sectors.

This comes after an earlier announcement that Woolworths group (grocery store chain) plans on hiring around 7,000 people in the second half of 2009.

thewest.com.au reports:

Coles owner Wesfarmers plans to hire more employees this year, particularly in its retail division, bucking the widespread trend of job losses resulting from the economic downturn.

Chief executive Richard Goyder told ABC local radio in Perth on Thursday that the retail and resources conglomerate might reduce staff levels at some of its businesses in 2009 but aimed to have a higher number of employees across the Wesfarmers group at the end of the year.

“I can’t guarantee this, but I expect Wesfarmers will finish the year with more employees than when we started the year, which would be a good outcome,” Mr Goyder said.

“That’s because we’re opening new Bunnings stores, new Coles stores, new Target stores, and the like.

Read rest of article.