Wednesday, 19 December 2012

Q&A: Can I get a Health Care Card?

by Rob d'Apice
I know that Insufficient Funds is aimed at young people but some of the oldies are just as clueless. I am 61, not working. What do we have to do to be eligible for health card?

Thanks so much for tuning into Insufficient Funds (Prosple's weekly podcast filled with money saving tips)! Sorry that a lot of the content is youth-targeted; FBi radio's main demographic is younger. But I'd love to do an episode for the wiser generation!

Regarding your health care card, you should be eligible for a 'Seniors Health Card' when you are at Age Pension age (which for you is probably 65). However, given you are not working, you may be eligible for a 'Low Income Health Care' card - but if you are already receiving superannuation benefits, note that this counts as 'income' in determining whether you are above or below the threshold. Find out more on the Centrelink website.

The third, and main, type of card is simply the 'Health Care Card'. It's automatically awarded when you are receiving an eligible Centrelink allowance - you would probably already know if you were eligible, but you can check out more on the Centrelink website.

Financial management pre-retirement and beyond is substantially more complicated than choosing the right savings accounts. There are many nuances in the regulations (particularly re: superannuation) for making the most of your money. I'd suggest you have a chat with a financial advisor, if you haven't already - as much of the advice needs to be tailored to you.

In any case, I'll make a note to start including more tips for the slightly less young!

Got a question you need answered? Drop me a line at

Tuesday, 18 December 2012

Christmas on a Budget

by Rob d'Apice
Christmas is super expensive. Which is somewhat ironic, since Jesus preached frugality and restraint. To be fair, though, Jesus didn't know how great iPads are.

You can do Christmas on a budget, though! You've only got 7 days left, at time of writing, to wrap everything up - that is, if we all make it past the End of the World. So we've prepared some crazy hot tips to make sure you get the most bang for your buck.

Gifts, on a Budget

Our solution? Online. Cheaper products, bigger range and home delivery. Here's our top picks for getting the best of the best.

  • Etsy is an online marketplace supplying an emporium of unique handicrafts, often vintage or handmade. The website is easy to use, allowing you to search goods by location, speak directly to the producer / artist and postage is relatively cheap. 
  • lets you shop in the US without the disappointment of realising the products you want cannot be shipped to Australia. They provide you with a US postal address for shipping, and they'll then forward your products onto you. Plus, if you're an Amex card holder, you can get discounted shipping and premium membership for free! Shipping is also superfast, and generally gets to you in 3-4 days. 
  • Personalised stuff! If you want to give a gift the recipient cannot return - get them a personalised mug. Older relatives love thoughtful gifts and its easy to create a personalised keepsake that won't cost you a fortune. Vistaprint is an online service where you can custom just about everything, to a wall calendar, photo book or iPhone case. If you'd rather go in store most electronic retailers or camera shops now offer a small range of items to personalise. 
  • What to get for the grandparents. Slightly more impressive than a personalised mug, Trove is a digitalised archive of Australian books, images, newspapers and maps dating back to the 19th century. For Christmas last year I went on Trove and got an A3 print of the front page of the newspaper the day each grandparent was born. It was a great gift, not just for the sense of nostalgia but it created interest and conversation with the whole family. 
  • If you want to give a gift that will keep on giving choose Kiva. Kiva is a non-profit organisation that supports and facilitates micro-lending. Focusing its efforts in less developed countries, Kiva is an initiative to provide loans to fund start ups and support small businesses.  On our end the process is simple: make a loan, choose the business to support, get progress updates and once the loan has been repaid you can fund another loan. Give a Kiva Card this christmas, empower a community and provide endless opportunities.

Don't forget to check the websites return policy (located usually at the bottom of a store webpage) in case you need to return an item. If you're worried about what to buy for your hard to please relatives try The Iconic. They have a range of clothes and accessories with free returns for 100 days, saving you stress and hassle, with the added bonus of free overnight shipping for items > $20.

Another option for making Christmas less expensive: Secret Santa! Instead of spending $600 on a bunch of average gifts, why not spend $200 on a good gift that will actually be appreciated and save you all money? Plus, you'll help us manage the huge amount of crap that ends up in landfill post-Christmas season.

Celebrations, on a Budget

Christmas is mostly about getting merry. That means you need a place, some grub, and something to wash it down.
  1. Food. Don't do all the work yourself, ask your guests to bring a plate. This will cost you less, save you time and its a good way to share the effort. If you're looking to save a bit more money look for cheaper cuts of meat, lamb shoulders are a great alternative to the expensive steak or prawn & oysters. Slow cooking can transform your cheap cut into a mouthwatering meal fit for your christmas celebration. Try Aldi and Costco for wholesale prices and bulk buying of groceries.
  2. Drink. Drinks are expensive so it's best to plan ahead. Dan Murphy's can deliver in 2-4 days for free if you spend over $300, otherwise its around $7. You can create a list of drinks to purchase online and arrange to split the costs. If you're having a big shindig, inquire with your local bottle shop to see if you can return unused drinks - a great way to save money. BYO is always an easy and cheaper alternative, your friends brining an assortment of drinks to make the latest cocktail or try a new label of beer or cider.
  3. Venue. If you want to spice up your Christmas celebrations, reduce funds and effort consider a rotating Christmas. That's where you have pre-dinner drinks at one house, entree at another, mains at another, and desserts somewhere else. Only really possible if each venue is in walking distance! 

Post Christmas ...

The big day has come and gone. Presents have been exchanged, food consumed and the bank balance is looking low. Here are some tips for getting you into the New Year. 

  • Recycle unwanted gifts. Why keep the five beach towels you were given? On-gift, exchange or make some money and sell those unwanted gifts on ebay.
  • Got Christmas money? Well done on your newfound moolah! My tip: don't waste it. Put half of it into your long-term savings account, then spend the other half on something nice for yourself. You'll be surprised at how much you can pull together from Grandma's christmas gift each year. If you don't know what the best savings account to choose, you can compare right now on Prosple.

From the team at Prosple, wishing you all a merry, safe Christmas and a happy, prosperous (Prosplerous?) New Year!

Tuesday, 27 November 2012

Should I buy a car or use GoGet?

by Rob d'Apice
So, you want your own wheels?

I hear you. They're pretty damn useful. But they are also phenomenally expensive. And not in the 'I know this is an expensive purchase and I'm cool with it' way, but in the 'these expenses keep adding up and I have no idea how much I'm bleeding' way.

Sit back. Let's prosple* this out together.

How much does a car cost?

New cars are expensive. To get your hands on some of the cheapest rides on the market, expect to pay around $16k for a standard Mazda 2 and $19k for a Toyota Yaris. So, without a spare $19k in the bank, you might be thinking what's my alternative? Should I get a car loan? Long-time readers will know that I'm not keen on car loans: you'll lose a huge amount of resale value in the first few years of ownership (we call this 'depreciation'), and you'll be chalking up hefty interest payments on your loan. (FYI: the golden rule is to avoid using loans to pay for ANY depreciating asset).

A new Yaris will set you back $19,929.51 as a driveaway price

Still desperate for a car of your own? Think about getting a used car.  You can find a 2009 Toyota Yaris for around half the current sales price on CarSales. The best option is to pay using cash savings. In 10 years, you'll be much richer than your friend who's dropped a car loan to get that new Lexus.

What are the running costs of a car?

The upfront cost is only a small component of a car's true cost. Keeping your car on the road is pricey - a combination of a bunch of different expenses:

  • Registration. This will depend on your state and the weight of your car, but in NSW it has generally been around $300-$400 per annumMore details on the RTA Website.
  • Compulsory Third Party Insurance. AKA the 'green slip' in NSW. This covers the costs of injuries to passengers, drivers and pedestrians in an accident caused by you. The amount will depend on your age (men pay more) and gender (younger people pay more). As a 27 year old male, mine has been around $700 per annum - but this gets substantially cheaper the older (and more female) you become.
  • Third Party Property Insurance. This is optional insurance that covers you for any damage you inflict on other property (vehicles, houses, etc.) as a result of an accident. I'd encourage everyone to get at least this level of optional insurance, since you can cop a massive bill if you run into the back of a BMW - it's not worth the risk. This has been around $400-$500 per annum for me, but will depend on a bunch of different risk factors. You can also get full 'Comprehensive' insurance, which will be more pricey but will also cover damage to your car in an accident, and will generally cover theft of your car. I was quoted more than $1000 per annum for comprehensive insurance - I chose not to get it, given the value of my car is less than $5,000!
  • Servicing. It's recommended that you get your car services twice a year. This can prove pricey, and the costs can be quite unexpected. I've had services for less than $100, and services that were more than $700, depending on what needed to be done to the car. If you're car is older, your services will typically get more pricey. I'd generally spend between $400-1000 per annum on my 1998 Toyota Camry.
  • Petrol. This will depend on how much you drive. Find out the fuel efficiency of your car - google 'fuel efficiency' with your car name and have a look; my 1998 Toyota Camry goes about 9km per litre of fuel. Given I've travelled about 10,000km per annum, I'm spending roughly $1,600 per annum on fuel. If you travel for work, I'd expect this to be much higher.
  • Depreciation. This is a hidden cost, but the value of your car decreases every year. Think about it this way: if you just bought a $5,000 car, your $5,000 isn't 'gone' - you could resell your car and probably get about the same price. But next year, the value of your car will decrease - that's money you've effectively lost. Depreciation is curved - you'll lose more 'value' each year when the car is younger. Choice suggested you'll lose about 14% of the value in the first 3 years, and about 6-8% in the remaining years. For me, I'd expect I'm losing about $400 per annum in depreciation (given that my car is not as state of the art as I'd like).
  • Parking, Cleaning, Tolls... There are a bunch of other charges you're likely to cop when driving, and while they're small they can really add up. The rain cleans my car - it's cheap, but it's probably not doing great things for my car's resale value! Living in the inner-city, make sure you factor in the 'opportunity cost' of your parking space - if you have off-street parking, you could be renting that out for $50-$100 a week. That's money you're losing by owning a car.

All up, my (humble) wheels are probably costing around $4,000 - $5,000 a year.

How much does carsharing (like GoGet) cost? 

What the hell is carsharing? You're out of the loop, bro. It's a new model of shared car ownership. Basically, you sign up with a company that has a bunch of cars parked in dedicated parking spaces around the city. When you want to use a car, you book online, and then go to the car and unlock it using your membership car. You'll generally pay a fixed hourly rate and a per km rate, depending on the company and the particular plan you are signed up to.

GoGet is the largest of the carsharing companies (you can also check out Flexicar and GreenShareCar). They have 3 different plans to get you started, but my analysis shows that if you're using a car for more than ~3 hours per week, you're best off on the highest plan ("go frequent"). That means you'll pay $29 per month, $5.65 per hour and $0.40 per km. You'll also need to pay a $500 refundable bond when you sign up.

So how much does that actually amount to? If you hire a GoGet car for two four-hour sessions each week, you'll pay roughly $2,800 per annum on the "go frequent" plan - that includes the $29 monthly fee.

You can also hire the cars for a full day for $69 per day. If you do that once every fortnight, you'll pay another $1,800 per annum. In total, you'd be paying about $4,600 a year - probably roughly similar to the cost of driving around my beat up 1998 Toyota Camry.

So is it worth it? There's a bunch of advantages to GoGet that we haven't spoken about:

  • Easy parking. GoGet have dedicated parking spots for each car, so you're never searching for a park when you get back home.
  • Petrol included. GoGet pay for all petrol, so there's no additional cost there. If you are out of petrol on a long trip, there's a petrol card in the glovebox that can be used to fill up for free.
  • No hassles. Forget servicing, cleaning, insurance, etc. GoGet do all this for you so you waste much less time.
  • Range of vehicles. GoGet have hatchbacks, utes, vans, and convertibles - if you're moving house, you can get your hands on the car you need really easily.
  • Good for the planet. GoGet use more fuel efficient cars. Carsharing is more efficient too - if we all carshare, we need much fewer cars, which means less resources consumed in car production.

There are a few downsides you should consider before you sign up:
  • Less spontaneity. You have to book the amount of time you want your car, and if you want to extend your trip, you have to call up GoGet. If someone else has booked the car for that period, you may have problems.
  • Locations. There are a heap of cars in the inner city, but if you're in the 'burbs, you might not have any cars close to you. Check out GoGet's locations online.
  • 21 and over. Age discrimination, yeah?

Free interstate car hire!

You heard me right. TransferCar is an online service that advertises cars that need to returned or relocated, generally from rental car companies. The most common relocation routes are between Adelaide > Alice Springs > Brisbane > Cairns > Darwin and Perth > Sydney & Melbourne - although other routes do pop up. TransferCar is a free transport alternative for travellers (sometimes you'll need to pay a minimal cost) and the vehicle is often supplied with the added incentive of free petrol and insurance. The vehicles can vary in size and you need to be 18+ and hold a full license to become a driver. By signing up online, TransferCar can notify you of their latest deals via their website, through email notifications, Facebook, Twitter or via their blog - so keep an eye our for your next free trip!

You should also check out Jayride. Combining the benefits of TransferCar, shuttle bus services and ridesharing, Jayride is perfect for the modern day organised hitchhiker and traveller. Particularly useful for interstate transport, vehicle owners can advertise cars to be relocated or available spaces for you to join them on their trip - often with a small asking price. You may ride in a car, camper or bus, meeting people along the way as you reduce your carbon footprint and save cash. 

This post is based on our weekly money segment, Insufficient Funds. You can tune in to FBI Radio 9:30am every Monday, or catch up on all our episodes via podcast.

*Yes, prosple is a verb now.

Thursday, 22 November 2012

Getting discounted car rentals

by Rob d'Apice
With some products, I always feel like I'm getting squeezed. I put car rentals in that category - I feel like it's an up-selling endurance sport. Do I need the additional insurance cover? Probably. Throw in a GPS navigation system? I don't want to get lost. Pay my tolls in advance? I guess that makes sense. Only $30 more per day for a convertible? Well that seems like a bargain.

Suddenly, you're credit card is maxed out.

Cheap Car Rental

Here's a pro-tip. Most universities have negotiated discounted car rental rates for their staff, students and/or alumni - and they post the discount codes on their website. Contact your university to check what codes they have, and if you can use them. They may even publish them on their website, for example, you can use University of Sydney's Thrifty discount codes and ANU codes right now!
Using these will provide massive savings - and you can use them online super easily.

Best transport to & from the airport

Car rental is often cheaper than alternative transport to and from the airport. In Melbourne, using the discount codes above, you can lock in a hatchback for ~$60 for a weekend. That's roughly the price of a one-way cab ride from Tullamarine or 2 return tickets on the shuttle bus. Basically - you'll save money by renting a car.

Getting around town

Using your rental car to get around is great, but navigating the CBD can turn into a massive parking fees. Don't worry - there's more savings to be had! You should look out for free transport systems for tourists, like the 555 in Sydney (running from Central to Circular Quay) and the Melbourne Visitor Shuttle (that loops around the CBD).

Free walking tours

Want more free options? I've got one more tip up my sleeve!

If you do want to take in a bit of culture but can't fork out the cash, most major cities offer free walking tours. Tours usually run each day from a central point in the city and information can be accessed from most hostels. In Europe, SANDEMANs dominates the free walking tour scene - check out the website for more info.

How to find cheap flights

by Rob d'Apice
Cheap airfares are a tricky beast. Finding the best deals is certainly an easier task with the advent of many online fare comparison websites, but there are still plenty of insider tricks to finding bargain prices.

Relax, though. We've done the dirty work to find out where the best fares our hiding, and formatted them into 5 simple tips!

1. Compare online

Maybe a little obvious, but your first stop should be online comparison. The best site I've seen is Webjet, although it ain't the prettiest. I always check Adioso - a rocking new internet startup based out of Melbourne. They'll create a pretty graph for your flights that show you the cheapest days to take off.

Don't book through Webjet. They'll add around $30 to your fares. Use it to find the cheapest flights, then book directly through the airlines' websites.

2. Use Jetstar's Price Beat Guarantee

Do you like Tiger prices? Do you also like leaving on time? Great news - you no longer have to choose between the two!

Jetstar offer a Price Beat Guarantee. They'll match the prices of flights with similar fare rules leaving within 1 hour of a Jetstar flight... then beat it by 10%! The best way to find the best domestic fares is to compare all flight options on Webjet, then call Jetstar's dedicated price match hotline - 1300 369 516 - and quote the Tiger prices. This gives you the best value on domestic flights you can find.

Another added benefit? No Credit Card fees when you're using Jetstar's Price Beat Guarantee!

3. Get Your Student Discount

Often, you're likely to find the best possible domestic fares using online comparison. This isn't true for international flights, though: airlines generally offer discounted international fares for students. To access them, you'll need to go through a student travel agent - like STA Travel or Student Flights. Make sure you've done some basic comparison online before you see the travel agent, so that they know what price they need to beat!

4. Avoid Peak Travel times

Fares increase substantially during peak holiday seasons, and there's generally nothing you can do about it. If you have the option, plan you're trip outside of December/January, and avoid major school holiday periods. If you're travelling domestically, avoid Friday nights and Sunday evenings as they are peak times for weekend getaways.

5. Book early

Generally, flights get more pricey as you get closer to date - so make sure you book as soon as possible. Make sure you don't miss out on special prices though - they are generally available 3-9 months before the travel date, so keep your eye out for them.

6. Frequent Flyer? Go Round the World.

The best value you can get from Qantas Frequent Flyer points is a 'Round the World' ticket. They come in at 140,000 points (worth about $1,400), and let you travel around the whole globe. I recently used it to book Sydney > London > Berlin > Madrid > Mexico City > Sydney. Amazing value. This deal isn't well advertised - you'll need to call Qantas to hook it up.

If you're not a frequent flyer, a Round the World ticket can still be great value - check out the deals from STA Travel and Student Flights. They'll let you customise their advertised itineraries. Oneworld also offer Round the World tickets, but the cheapest fares are around $4,900 - farely pricey!

Want a Travel Agent you can trust?

In Sydney? Check out STA Broadway. A good friend of mine, Ally, is the manager there and always manages to find me great deals on international flights. Tell her Prosple sent you!

Monday, 22 October 2012

Do i qualify for Youth Allowance?

by Rob d'Apice
Are you 16-24 years old? Are you studying full-time or undertaking an apprenticeship? You may be eligible for Youth Allowance payments from Centrelink.

That's the good news! Want the bad news? It's ridiculously complicated. To get across all the nasty details, your best bet is to check out the Centrelink website, or head into your nearest Centrelink Service Centre. But for today, we're giving you Youth Allowance 101 - understand all the basic rules in 5 minutes before you waste hours navigating the depths of bureaucratic purgatory.

Are you independent from your parents?

If you're undertaking tertiary study and are aged 16-24, you're biggest hurdle to getting Youth Allowance will be likely be showing that you are independent from your parents. If you don't satisfy Centrelink's rules around independence, Centrelink will undertake a parental means test before making any payments. Specifically:
  • Parental income test. If your parents earn more $46 355 combined (at time of writing), your Youth Allowance payments will be reduced. If they are earning more than $100 000 combined, it's unlikely you'd receive any payment at all.
  • Family assets test. If your family's assets are greater than $619 500, you would not be eligible for Youth Allowance.
There's also a more complicated Family Actual Means Test if your family's income is more complicated - you'll be required to submit details of all your family's spending and savings for Centrelink to assess. It's pretty miserable, and another reason to try to prove you are independent. Check out all of Centrelink's details on asset and income tests.

How can you 'become' independent?

There are many ways you can be assessed as independent, but the most common ways to qualify are:

  • Be aged 22 or older, or
  • Be married or living with a de facto partner, or
  • Cannot live at home due to extreme family breakdown, or if you have parents that cannot exercise their responsibilities, or
  • Have worked full-time for 18 months over a 2 year period, or
  • Have earnt a sufficient amount of money through work. Come from an Inner Regional, Outer Regional, Remote or Very Remote area (check if your family home is in such an area using Centrelink's tool), and your parents earned less than $150 000 in the last financial year, and:
    • have earned more than roughly $21 000 over an 18-month period (the exact amount you need can be found using this table - find the row that covers the date when your 18-month period started, and use the number in the 3rd column), or
    • have worked part-time for 2 years

How much will you get?

Depending on whether you live at home, your age, and whether you have a partner, you'll receive between $220 and $402 per fortnight. You may receive more if you have children. See Centrelink's full payment rates table

Your payments will be reduced if you earn more than $400 per fortnight. For every dollar you earn about $400 per fortnight from employment, you'll lose 50 cents of your Youth Allowance. In other words, say you have already earned $400 this fortnight. If you want to do another shift that will earn you $100, you'll lose $50 worth of Youth Allowance - so you'll only get a net $50 for your shift.

Unused portions of your $400 per fortnight working threshold can be rolled over. If you only earn $100 from employment during a fortnight, Centrelink will add $300 to your Income Bank. That means if you earn $700 in the following fortnight, your Youth Allowance won't be reduced. Your Income Bank can reach a maximum credit of $10 000 (or $1 000 if you are an apprentice).

Over 24? Try Austudy.

If you're over 24, you won't qualify for Youth Allowance. If you're still studying, though, you can qualify for Austudy - you'll get the same amount of Youth Allowance (or more), and you don't have to worry about Independence rules or special rules when you live with your parents. No-one is judging you, but it's probably time you find your own place!

Note that some graduate studies (include doctorates) will not make you eligible for Austudy. Your previous studies may impact your eligibility for Austudy, too.

Aboriginal or Torres Strait Islander? Try ABSTUDY.

ABSTUDY is fairly similar to Youth Allowance in terms of rules. You'll still have parental means tests if you aren't independent, but the rules around how you get paid are different and in some cases more flexible. It would be worth talking to Centrelink in more detail about what you might be eligible for.

Thursday, 27 September 2012

Avoid Bank Fees when Travelling Overseas

by Rob d'Apice
When travelling overseas, it's easy to cop a bunch of unnecessary bank fees when trying to access your money. And it can be substantial - depending on how you managing it, you could be paying more than $10 in fees for every $50 dollar you withdraw. Not cool!

Today, we look at 4 different methods for getting access to your cash overseas - from worst to best.

The worst: Exchange at an airport

Avoid exchanging cash at the airport altogether. Generally the exchange rates you receive are particularly bad. They can do this because they have a stranglehold on a captive market - once you're at an airport and you want money changed, you don't really have another option!

Another downside to exchanging all your cash in advance is that you're then carrying around a lot of currency, and you're putting yourself at risk of losing it or getting it stolen.

The bad: Using your ATM Card

A.K.A. the I-forgot-to-do-anything-about-my-money method.

So, you chuck your ATM card into a foreign bank and pull out some money? You'll generally cop a ~$5 fee from your Ausralian bank, plus a 3-4% currency conversion fee with each withdrawal. You may also pay a small fee to the foreign bank for using their ATM.

If this is your only option, you're best bet is to take out as much money as possible with each transaction to minimise the fees. If you're in a group, considering taking out a large amount in turns and splitting it between the group. Make sure you store any excess cash you've withdrawn somewhere safe - like back at your hostel or hotel.

The good: Use a preloaded cash card

Many of the banks now offer a preloaded travel cards. Before you leave, go to your bank to get a card, and transfer in some of your balance. You can transfer in your spending money and convert it to the necessary currency you'll need for your trip (meaning you 'lock in' an exchange rate when you load the card). The card itself can hold a bunch of different currencies at the same time.

You'll (generally) still get charged a fee for ATM withdrawals by your Australian bank, but you will avoid a large currency conversion fee with each transaction.

Note that there is sometimes a setup fee for the card, depending on the bank. If you're a student, you may be able to get this fee waived.

The best: Use a zero international transaction fee credit card

The 28 Degrees Travel Card, offered by GE Money, has no annual fee and no international transaction fees. It also doesn't charge anything for cash withdrawals (although you won't get an interest free period, so you'll start accruing interest on this withdrawal straight away). Note that you may be charged a fee by a foreign bank for using their ATMs - but this is hard to avoid.

I suggest you 'pre-load' the card with money - transfer some of your holiday spending money to the card so that your credit card is in the black. That means that when you withdraw cash from a foreign ATM, you won't be 'borrowing' on the card and you won't pay any interest.

Wednesday, 19 September 2012

6 Things That Gina Rinehart Could Do

by Rob d'Apice
Gina Rinehart, Australia's richest person and the world's richest woman, has a networth of over $29b at time of writing, according to Wikipedia.

Thus far, she hasn't proved particularly popular with the average Australian. Her recent press coverage has revolved around her praise for Africans, "willing to work for less than $2 a day", and her public battle with her children through the Australian courts over their share of inheritance.

Oh, and her poetry.

So we ask ourselves: what could Gina Rinehart do to win some serious public favour? $29b goes a fairly long way. How long? We put our financial detectives on the case and found 6 options.

1. Colonize the moon.

Discovery Channel's website estimates that the cost of setting up a small colony of 100 people would be about $15b in transport costs. After accommodating the costs associated with training, support, etc, we think it would be well covered by Gina's chequebook. She may even have some spare change left to send herself up for a visit or two.

2. Solve world hunger for one year.

The Food and Agriculture Organisation of United Nations reckons solving world hunger costs $30b a year. That means Gina could help a billion people eat for one whole year.

3. Buy an iPhone 5 for every Australian.

At a retail price of $799, every Australian man, woman and child could be the proud owner of a new iPhone 5, instead of having to deal with Gina Rinehart. On top of that, you'd still have a couple of hundred dollars leftover to blow on useless apps, or expensive adapters to work with all your old iPhone 4 appliances!

4. Employ every person in Africa for 3 weeks.

Gina Rinehart assures us Africans are ready and willing to work for $2 a day. By her math, she can employ Africa's whole 1 billion person population for 15 days - or three working weeks. Perhaps she could start by outsourcing her poetry?

5. Fulfil every loan on - 10,000 times over.

As a martyr for free market capitalism, Gina Rinehart might prefer loans over handouts? No problemo! Gina has enough cash to fund every single loan on Kiva, a website that facilitates charitable micro-loans to small businesses in developing countries to help support local enterprise. In fact, she could fund 10,000 websites the same size as Kiva.

6. Invest in an High Interest Savings Account.

We can confirm that, at time of writing, Gina Rinehart is not a member of Prosple. This is a great shame, because if she had compared online savings accounts using Prosple, she'd be scoring up to 5.71% interest on her $29 billion. Assuming they accept her larger-than-average balance, she'd be netting $1.7b in interest every year!

In other words, she'll be netting 6.8 billion African man-hours every year!

Monday, 17 September 2012

HECS Debt. 3 Tips on making it work for you.

by Rob d'Apice
HECS Debt. 

Also Known As: HECS-HELP Debt.

Also Known As: that-money-you-owe-the-government-for-your-degree-but-you-don't-really-know-how-it-works.

How does HECS Debt work?

In Australia, if you're a Commonwealth-supported student (ie not a full-fee paying student), the government pays for most of your tertiary education. There's a small amount that your expected to pay, though, called student contributions. It's between $4k to $10k per year, depending on the courses your studying.

The government provides you with an loan to cover your student contributions, and it is now called HECS-HELP. Here's the scoop:

  • Amount. Depending on what you study, and the length of your course(s), you'll probably wind up with a debt somewhere between $10k and $50k. The average would be somewhere around $20k - $25k. You can check your current loan using MyUniAssist. You'll need your CHESSN number - it'll be in your 'Commonwealth Assistance Notice' that you receive each semester, buried somewhere in your inbox!
  • Interest. You aren't charged any interest on the loan, but the loan is adjusted to inflation - which is roughly 2 to 3% per annum. That's a much better deal than Home Loans (6 to 7%), Personal Loans (10 to 15%), or Credit Cards (up to 30%).
  • Repayments. You don't need to make repayments until your income reaches about $50,000 (this threshold is also adjusted upward each year). You'll then get 4% of your total salary docked to go toward debt repayments. As your income increases, the % of your income getting docked increases too - up to 8% for salaries around $90k or more. The repayments automatically come out of your pay and are processed as part of your tax return.

Basically, it's the best debt you'll ever have: no (real) interest, automatic repayments and no repayments required when you're a low income earner.

So what's the best way to make sure you get the most out of your loan? Here's our 3 piping hot tips:

1. Don't pay upfront or in advance. 

The government gives you a discount on repayments made upfront (at the beginning of semester) or voluntarily (after you've studied but in advance of compulsory repayments). For each of these payment types, you'd receive 20% and 10% discounts respectively for payments over $500, but have just been decreased to 10% and 5% respectively starting this year.

While there was a tangible advantage to paying off you debt quicker in the past, we think that the new discounts aren't enough to justify the difference that money makes to a student as compared to a young professional. In other words, having $1,000 at your disposal as a student is more important than $1,100 as a (hopefully) gainfully employed 30-year-old.

Want another incentive to hold onto your HECS Debt? If you migrate to another country later in life, you won't earn income in Australia and won't be required to pay off your debt. When you die, your HECS Debt will be forgiven, meaning your estate and/or your relatives won't be required to pay it back. The disadvantage, of course, is that you'll be dead.

But hold up: there's a strong counter-argument to this. Debt is generally a bad thing, and we'd never argue against someone choosing to pay off debt quickly. If you do pay off HECS quicker, you'll end up getting out of compulsory payments quicker - which means more take-home salary later in life. All we're saying is that you're not hurting yourself by paying off the debt at the minimum required rate.

2. Are you eligible for a benefit?

Did you study Maths, Science, Education or Nursing? Are you now working in a related industry?

You may be eligible for the HECS-HELP Benefit. If you're eligible, the government will contribute up to $2k per annum on your behalf to pay off your HECS-HELP debt.

You DO need to apply for this! It isn't automatic. Make sure you don't miss out, because the HECS-HELP Benefit counts toward your annual compulsory HECS repayments - this means that you could be getting more of your income in your pocket right now. More details on how to apply for the benefit.

3. Get Special Considerations.

Have you had to withdraw from a course after the census date?

Unfortunately, you'll still cop a bill for the course. If there were extenuating circumstances, like a serious illness or personal difficulties, you may be able to apply for special considerations so that you do not have to pay for the course.

The government has more information on this process, but you'll have to apply through your university. This process is generally different to the similar academics process (ie getting a fail removed from your transcript), so make sure you know that both are being sorted out if you go through this process.

Thursday, 23 August 2012

Negotiating your bank fees

by Rob d'Apice
The many layers of bureaucracy that sit atop our world of mass-commerce have removed a fundamental truth about the relationship between buyer and seller: it's two people exchanging goods and services at a negotiated rate.

So when a bank imposes a $35 late fee on your credit card, instead of saying 'well - them's the rules!', why not instead call your banking provider and say: 'I'm not happy.'

You can do it. And it works. 

Example 1: $150 cash for not cancelling my card. I called to cancel I card I'd signed up for as part of a promotion. I told them I wasn't interested in the card and I didn't think the rewards were competitive. They put me on hold, and when they came back, they offered to put $150 onto my account. For free. For me to spend. On anything.

Example 2: Halving an annual fee forever. I was charged a $250 annual fee on a credit card I had a few years back - the fee was lower in the first year and I forgot the 2nd year fee was coming around. I called and complain about the fee - I thought it was considerably higher than similar cards from other banks. I asked them to refund the fee and told them I would like the card cancelled. Eventually, they offered to halve the annual fee I'd been charged and halve it permanently if I kept it. I agreed.

Example 3: $200 worth of points for complaining. A friend signed up for a Balance Transfer credit card. She was transferring a large amount of money, and the application kept getting held up within the organisation. She called and complained about how long it was taking and the inconvenience this was causing her. They gave her 20,000 complimentary reward points (worth about $200) for her troubles. Bam.

Example 4: Refund my late fees. A friend once got a $35 late fee on their credit card - on about a $40 credit card debt. They had forgotten they had spent something on the card. After complaining about the fee - I've been a customer for X years and I don't think $35 is fair, I'd like to cancel the card - the bank apologised, refunded the fee and the interest he'd been charged over the previous month. Anything else I can help you with?

There are plenty more examples like this - but it's time for action! Pick up your phone and make sure you are getting a fair deal. Here are our five simple steps to making sure you get a fair deal from your bank.

1. Understand your alternatives

To equip yourselves for a negotiation, you need to be sure you understand your options. Are you unhappy with your credit card? Have a look at other options and find another product that you're genuinely willing to switch to if your bank doesn't improve their offer. It's good to have factual information about why you think this deal is better (they have a lower annual fee, they have a better interest rate, etc.)

Don't know how to compare? Don't worry, we've got that bit covered:

2. Explain your issue

The next step is to get on the phone with your bank, and calmly explain the situation. You should make sure you explain to them exactly what you are unhappy about - a particular fee, an unnecessarily high interest rate, etc.

The customer service people will explain to you how and why the fee occurred. This is fine, but remember it isn't about the what the rules were - it's a negotiation about what the rules should be in order for them to keep your business. 

3. Point to competitors

As with any negotiation, you need to show that you have other options. Don't be vindictive or accusatory - that isn't going to get anyone on side. Instead, you should firstly explain that you've been a loyal customer for X years, and that you've until now really liked the service you've received. You should explain the number of products you have with the particular bank.

But... you should say that this fee/interest rate/whatever has soured your view of the bank and you feel like the bank may no longer be looking out for you. You feel like you're being exploited.

Then... say you've already done some research and you're thinking of closing your account(s) and moving to the other product because of its better features [better interest rate/lower fees/friends have told you they are good].

4. Let the customer rep talk

Make sure you give the rep a chance to negotiate with you - don't be overly forceful or brief (just close all my accounts please!).

The rep will apologise for the situation, and will generally do a good job of trying to rectify it. They may offer other products in their repertoire that better suit you. Make sure you fully understand those other products and how exactly they'd be better for you. And if you are complaining about a particular fee, make sure they refund those fees for you as well as switch your products.

5. Be grateful

You've got a human on the phone, so don't be an arsehole. They didn't charge you the fee. Thank the rep for helping you out and wish them well.

Did the bank not try to save you? If the bank is combative and isn't willing to do anything to make you stay, you're probably with the wrong bank. If you're in a patient mood, try hanging up and calling back immediately - you may have better luck with a different customer service representative.

Have you ever asked for a better deal on bank fees or charges? Let us know in the comments below!

Wednesday, 1 August 2012

Haven't done last year's tax return?

by Rob d'Apice
It's 2012 Tax time.

For some: the prospect of some free money. For others: the fear of a hefty tax bill. But for a final group of chronic procrastinators: an anxious reminder that last year's tax return (and the prior year's? and the years before that?) is still unfinished.

Stop procrastinating. You've either got a tax bill that's accruing interest, or you've got a tax return that isn't accruing interest, and you need to fix it right now.

Step 1: Find your documents

You need a few things to make your claim. Search your pile of 'important paper' for:

  1. Your PAYG statements. You'll need the end-of-financial-year statements you got from your employer(s) in each of the tax years that you haven't completed a return for. If you're missing one, pick up the phone and get your employer (or ex-employer) to send you a new statement.
  2. Receipts for deductions. You may think that this is a lost cause, but hold up a sec. Do a search through your emails for 'receipt' - you're looking for anything that was an expense related to your profession. Search for 'charity' or 'tax deductible' - any payment over $2 to registered charities is deductible. If you're really keen, scan your credit card / bank statements for possible transactions

Step 2: Download old e-tax software

The ATO doesn't offer prior year e-tax software for download, but you can download them all here. You won't be able to submit them electronically, but e-tax will be able to print out your completed tax return for you - which will save you a lot of heartache with pen and paper.

Step 3: Take 5 minutes for some preventative medicine

Set up a folder in your email client called 'tax deductions'. Whenever you get a receipt that is tax deductible, send it to this folder (if it's paper, scan it in and chuck it in). This will save you time and money come the end of tax time this year.

But Prosple, I'm not going to do any of this!

Get an accountant. They'll do all the grunt work for you, and they are on top of the rules about deductions and documentation. They'll charge you a fee for their services, and this fee is also tax deductible.

Want some tax tips for maximising your return? Check out our tax tips from last year, which are all still relevant for this year.

Friday, 15 June 2012

Should I buy shares?

by Rob d'Apice
Shares are to finance what diets are to weight management. There's a billion different people spruiking their own philosophy, each with plenty of testimonials and each with an amazing track record of success. But when you strip away the marketing spin, the tried-and-true key to success is always disappointingly unsexy.

To lose weight: eat less calories than you burn.

To make money with shares: diversify your portfolio and hold for the long term.

What is a 'diversified portfolio'?

Diversification is the strategy of spreading your investment over a variety of products and investment classes to reduce your risk exposure to any one particular investment.

But hold on, Prosple. I *know* that mining shares are currently undervalued and I can make a quick killing by buying a bunch of BHP stock now, right?

The risk with trying to 'pick' the undervalued stock (to buy) and overvalued stock (to sell) is that there are many, many traders (from massive investment firms to individuals) trying to do the same thing that have more experience, time and resources to analyse those stock. The current stock price is a reflection of their collective research - if they thought those stock were undervalued, they'd be buying them up, which would push the price up to a point where investors stopped buying.

Banking on yourself to know that the market has got it wrong is a big call. And a risky one.

An easy way to hold a diversified share portfolio is through an index fund. For example, an ASX 200 fund will invest in the stock of the largest 200 publicly traded companies in Australia (in proportion of the size of each company) - so that you money is spread over many different industries, products, management teams, etc.

Alternatively, you could look for an actively managed fund that invests in a broad range of Australian shares, or you could construct your own diversified portfolio of shares (but it might be best to consult an adviser to help you with this; you'd probably need a sizeable initial investment to make it worthwhile).

What is 'long term'?

If you're investing in shares, you should realistically be thinking of leaving that money tied up for at least 5-10 years. Take a look at this:

The chart above shows you how much an investment of $1,000 would be worth today, depending on whether you put your money in an online savings account (orange) or invested in the ASX 200, an index that tracks the collective performance of Australia's top 200 shares (black).

For example, say you invested $1,000 in Australian shares 5 years ago - that would now be worth $767 today. If you'd put that money into a online savings bank account, you'd now have $1,303. That's quite a difference right there.

In fact, as you can see, if you invested in shares anytime over the last 8 years, you would have been better off keeping it in a savings bank account. But have a look at the same chart, now stretched over 20 years:

Historically, it's clear shares are the big winner in the long run - $1,000 invested 20 years ago is $5,252 in shares, but only $3,232 in a savings account.

So while it's clear that shares can provide a good source of long-term wealth, you should be wary of any investment that promises a faster return. Whether it's acacia berries that make you lose 30kg in just 1 week (I'm a size 12 again!), or forex trading that nets a stay-at-home-mum $1,000 a day (I've got the cheques to prove it!) - if it sounds too good to be true, it probably is.

Wednesday, 6 June 2012

Prosple wins government prize for

by Rob d'Apice
This weekend past, Prosple competed in Govhack, a 48-hour competition to produce new applications using public government data. We built (in a team with a developer from OzDocsOnline), and ended up taking home the major prize in the Open Government Category, as well as a prize for Best Contribution to Open Data.

TheOpenBudget is a two-fold project.

First: it's a brand new source of government expenditure data. Previously, this has never been readily accessible to the general public - it's buried in 100-page PDFs published by each of the 15 federal government portfolios. Now, users can download their own version of the data in .csv format, or hook right into TheOpenBudget's API to build their own unique visualisations/analyses.

Second: it's a unique visualisation that allows users to easily explore the distribution of funds - it's much more transparent than a list of dot points published by the government (or its opposition, for that matter). This visualisation is open source (available on github), so anyone can use this same tool to explore any government budget, if they have properly formatted data.

We're pretty proud of how it scrubbed up in 48 hours:

Check it out now, and let us know what you think. You can click on a piece of pie to zoom in, and click in the centre circle to zoom out.

Note we've only got 5 of the 15 federal portfolios up at the moment, and the site works best in Chrome, Safari or IE9. Firefox will render the chart sluggishly, and IE8 or less won't show anything.

There were plenty of gems coming out of GovHack (particularly some with really novel uses for the National Archives data):
  • A Day in the Life, a historical mashup of both photos and data
  • History in ACTION, national archives info presented 
  • Route me, a twitter service: send it a location, it will reply with the bus number, location of the bus stop, and walking distance to get you there (it uses the location data tied to your current tweet). Not sure if the service is still active, unfortunately.
  • Time Capsule, visualisation of available ABS data.
You can take a gander at the rest of the govhack winners here.

Friday, 18 May 2012

How much are Flybuys worth?

by Rob d'Apice
About a year ago, we wrote a story about how FlyBuys Rewards will earn about roughly $4 a year in rewards. It would take 56 years to earn a return flight from Sydney to Brisbane. This author would be claiming that flight well beyond his life expectancy, when the attraction of Wet & Wild or Surfers Paradise would be well beyond the capabilities of his brittle bones.

This year, Coles have revealed their revamped Flybuys program, apparently responding to their customers' cries for something worthwhile. Then they got Dawn French to salivate over that young male Coles ambassador, while he grins awkwardly at the camera. I don't know about you, but that certainly gets me in the mood to save on my shopping!

So does the new program check out? Is it 'Simpler and More Rewarding'? Our short answer: we think the program is possibly more complex, and the program is only marginally more rewarding than before.

More rewarding?

The key component of the new program is the increase in point earning rate for your shopping at Coles or Bi Lo, from 0.4 points per dollar spent to 1 point per dollar spent. The problem? They've halved the value of each FlyBuy point, so the net change in value to you is very small.

A year ago, you could redeem 22,500 points for a $225 flight, which equated to a value of about 1.0 cent of rewards per point. Now, while flight redemption is now easier since it is linked to the Webjet search engine, each point is worth exactly 0.5 cents. Half of what they were worth previously.

This means the huge increase in point earning rate is almost fully offset by the devaluation of points. It's no doubt confusing for consumers; people that are used to a particular flybuy point valuation may not realise points are now worth half what they used to be worth.

Don't believe us? Check out Coles' own Flybuys calculator, and remember to divide the total number of points you will earn by 200 to work out the $ value of your rewards. This author gets $4.98 of rewards per annum (that's an extra $0.98 per annum from the new programme).


The second major component of the program is the new my5 discounts. You can pre-register 5 different product categories (out of hundreds of possible categories), and you will receive a 10% discount on the 5 most expensive products you buy from each of those categories every day. Each category contains 1 or multiple related products. Any weighed products can be counted up to 5kg. You must spend at least $50 in a transaction to have your my5 discounts applied. You cannot change your product categories once you have selected them.

If that is a simple reward program, we may as well give up Prosple right now. At least this bit is simple to understand: the my5 program ends on October 31, 2012.

Are the my5 discounts actually worth it? Let's be optimistic and assume you spend $150 on your weekly shop at Coles, and managed to capture $20 of your bill under the my5 discounts (let's say you chose Helga's bread loaf, Coles free-range eggs, Coles chicken breasts, Coles-brand milk, and canned John West tuna - and you purchase those products each and every week). You'll get a $2 discount on your $150 bill.

It's not bad, but it's nothing to write home about.

Perhaps, though, if they get enough older women drooling over younger men, they'll manage to distract us from the cold hard truth: Flybuys aren't worth much at all.