MonoMoney

Top 5 Careers Employers Are Looking For

Russ — Thu, 15 Jul 2010 22:30:51 +0000

If you are looking to find a job that is not only right for you but has a good earning potential due to a increase in demand and a lack of supply, then the following list of professions may be worth considering.

Metal fitters and machinists
Engineering professionals
Metal casting, forging and finishing trades persons
Structural steel and welding trades workers
Business administration managers

These are the top 5 careers that employers are looking to fill and are having trouble finding the talent here in Australia. And you know what that means – they will pay top dollar for them.

These professions were listed as the hardest to source by more than 400 chief executives and released as part of the Australian Industry Group/Deloitte survey. And these numbers, as well as skill shortages in general, are apparently set to increase.

Other than the obvious effects on the economy, it means a long term period of advantage for those who are interested in those careers.

Have you considered any of those careers?

Image Credit: wools

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It Is Simple – You Either Earn More Or Spend Less

Russ — Thu, 08 Jul 2010 22:30:56 +0000

There are only two ways of saving more than you are now: either you earn more money or you spend less money.

There are two ways of being happy. We may either diminish our wants, or augment our means – either will do – the result is the same. It is for each man to decide for himself, and then do that which happens to be easiest. -Benjamin Franklin

Earn More

This is the harder of the two ways but it can be the more beneficial. Earning more involves increasing your income either through investments or good old fashioned hard work.

The main ways to earn more are to work more or get paid more for the work you do. The latter includes changing your work through a promotion or getting a higher-paid job.

Working Overtime
A lot of businesses offer their employees overtime. This is a very popular way to earn more money than you would normally receive. Some people even rely on overtime to off-set a low income.

Getting A Second Job
You could get a second job. This could include a night job or something extra on the weekends – basically anything that falls outside you current work. This isn’t recommended over the long term as you could easily wear yourself out, but if you are looking at paying off debt quickly or need to save in a hurry, then this could be a good short-term solution.

Pay Rise
With this strategy you try and get more money for the work you already do. Either by working harder or better or both so that your employer will pay you more. Depending on the job you have this could be challenging.

Get A Promotion
This is usually accompanied by a higher wage and while it would not suit everyone, a lot of people strive for this in their current jobs.

Getting a Better Job
Whether through getting a higher education or gaining more or different skills, this can be a great way to increase your income. Looking around for a better-paying and more fullfilling job could be just the thing you need.

Starting A Small Business
Starting a small business from home is a great way to earn extra income. This can be as small or as complex as you make it, and can even lead to you quitting your day job.

Spend Less

This is the easiest of the two ways to save more, and the road most people take when they are trying to save. You simply decrease the amount of money you spend.

Cut Back On Expenses
Going shopping less often, heading out on the town less fequently, curbing your frivilous spending – all of these will cut the amount of money you spend and allow you to save more.

Slash Your Bills
Reducing your bills can be a great way of finding extra cash. From turning off lights and using your air conditioner sparingly during summer to cutting back on cable television and your mobile phone plan, there are a myriad of ways you can save money on bills. You just need to look for them.

Eat Better
Cooking your own food and eating out less will not only save you money it will make you healthier as well. Reduce eating out to a special treat and learn to cook simple yet healthy meals at home from basic ingedients and save a heap on your food bill.

Don’t Keep Up With The Jonses
Living within your means and wanting less is a great way to save money because it means that you will be less likely to buy the latest fad product or try and out-do your peers. Be content with what you have and focus on quality over quantity.

Live Simply
Don’t over-commit yourself financially and live a simple yet extraordinary life. Favour experiences over things and be mindful of the difference between a want and a need.

Remember that there are only two basic ways you can save more, but a myriad of ways you can do each one. So experiment with them and try and find the perfect balance for you.

Have you found your perfect balance?

Image Credit: Cimexus, Robert S. Donovan

Author Info
This article was written by Russ – the founder of MonoMoney.com and total geek. Feel free to contact him via this website and let him know how well he is doing. Or just leave a comment below.

Cash Rate To Stay The Same But Banks Warn Of Increase Anyway

Russ — Wed, 07 Jul 2010 02:00:58 +0000

Well, yesterday saw the Reserve Bank holding interest rates steady for another month, but even so there have been solid rumouring that banks will increase interest rates any way, causing more consternation for mortgaged up Australians.

The Evidence
This ~~possible~~ highly likely decision by banks to raise their interest rates ahead of any Reserve Bank increase is now being backed up by evidence, with both the Commonwealth and Westpac banks warning that due to wholesale funding costs increasing (they have increased 0.20 to 0.80 percentage points in the past two months) there is pressure on them to increase their own rates.

Why Is This Happening?
The main reason for the increase in wholesale cost is the troubling European crisis, which seems to be on-going and looks like staying that way for some time to come, possibly dragging the rest of the world down with it (double-dip recession, anyone?)

To Put It Simply
If you don’t know the difference between cash rates and wholesale rates don’t worry too much. Basically, the wholesale rate is the rate at which banks borrow money to fund themselves. When this increases it costs them more to borrow the same amount of money – just like it costs you more to repay your mortgage when your interest rate goes up.

When that happens, banks worry about the cost to them (and ultimately their profitability) and pass on the costs to you, the mortgage holder.

So, The Banks Are Evil?
Well, yes and no. It’s a very complex argument but sometimes the banks are justified increasing their rates above the standard cash rate, but sometimes they are not. And when politicians denounce them for doing so, they are usually just playing politics as sometimes they know full well the increase is justified.

Your Situation
Although, it all depends on your point of view and situation. If you are a Commonwealth Bank shareholder with no mortgage you would damn well want them to pass on the wholesale interest rate rises as it is better for the business, but if you are a struggling family trying hard to pay off your mortgage you will be unlikely to see it that way.

But that’s life. And the best thing you can do is plan, budget, and save like crazy so that you can absorb these cost increases when they arise.

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Hype – Stay Away And Save Money

Russ — Tue, 06 Jul 2010 22:30:06 +0000

Ah Hype. That wonderful, exciting, super-charged stuff that makes us buy whatever it’s being applied to. Well, I’ll let you in on a little secret:

Hype is almost always a bad thing.

The Problem
The problem with hype is that it makes us buy on an emotional level instead of a rational one, which is never a good idea as you will eventually come back down to earth and realise that you have made a mistake (also known as Buyer’s Remorse). But by then it’s all too late and you have spent the money on something that you could of done without.

Resisting Hype
The hardest part of resisting hype is taking back control of your senses. What you need to do is stop and take a breather before you dive right in and part with your money.

Ask yourself a couple of rational questions like “Do I really need this?” or “I was happy yesterday without it, will I be happy tomorrow without it?” And you need to remove yourself from the hype for a while. Tune out from it and give yourself some time to chill.

Why Should I Avoid Hype?
Here are the top five reasons to stay away from anything that is hyped:

It probably isn’t that good anyway (if it was that good they wouldn’t need to hype it)
It will cost you a lot more than you wanted to spend
You most likely don’t need it (after all your life was perfectly fine before you heard about said product or service)
Your decision to buy is due to emotions rather than rational thought (which is never a good idea)
You will save money

So before you try and sell your own Grandmother to get a hold of said hyped object, have some quiet time and ask yourself whether you really need it. It will save you a lot more than just money.

Image Credit: stallio

The Power of A Dollar

Russ — Sun, 04 Jul 2010 22:30:35 +0000

This is something Warren Buffet understood from a very young age and has kept with him ever since.

That is, the power of every dollar you have and how much it is truly worth to you. And, as a consequence, why you should spend as little of it as possible now, as it will be worth so much more in the future.

For clarity sake, let’s start with an example.

How Much Is A Dollar Worth Today?
Not much. After all, you cannot buy much with a dollar these days. Not even a chocolate bar or a can of Coke. So, why should you care that much about one measly dollar?

Now, what if I told you that if you gave me that dollar then I would, in 20 years, give you back much much more than what it is worth today. Some of you would be thinking that given inflation, it would be worth even less than it is today. But you would be wrong.

What A Dollar Will Be Worth Later
In 20 years that one dollar, if you are smart, would be worth a lot more than it is today. Even in a simple bank account, it would be worth $2.40 (assuming a 5% pa interest rate). But that is being overly conservative.

If you invested that one dollar, along with other one dollars you saved or collected, you could make a lot more than that over 20 years. If you look at the long-term growth of the share market in Australia over the last 100 years, real returns after inflation for Australian shares listed on the stock exchange have averaged around 7.5% per year.

So, that one dollar, invested in the share market over those 20 years, would now be worth $4.30.

So, why would you spend that one dollar now when it could be worth $4.30 in the future? If you look at money in this way, you will realise the power of saving it now for future benefit.

Using This Knowledge
A more practical way of looking at it is the future cost of things that you buy. So, that can of Coke that costs you $2 now, is actually costing you $8.60 in future dollars (or F$). Ouch! That’s an expensive can of Coke!

How about that dress you spotted in a sale that you don’t really need but decided to buy anyway? What was it on sale for? That’s right, it was half price, down from $99.99 to $49.95. A real bargain! Not quite.

Not only would you not be saving any money, you would be spending $49.95 you weren’t expecting to when you left the house that morning, or as you should be looking at it, F$215.05 (a 430% increase over current value). Not really a bargain after all, is it?

Your Future Self
So if your future self could come back through time, 20 years from the future, and tell you not to spend that $49.95 on a dress that she cannot even remember owning, because that money would be worth so much more to her then, what would you tell her?

What would you tell her? And does this mean much to you right now?

If you want a quick way of calculating this when out and about or when you are tempted to spend money on something frivolous, then simple multiply the cost of what you want to purchase by 4.5 or, if you are not that good at maths, an even 5. This will give you a rough idea about how much that money is really worth to you in $F.

Image Credit: Claire L. Evans

Rule of 72 – Double Your Money

Russ — Sat, 03 Jul 2010 22:30:56 +0000

This rule is a handy one to know when investing.

While a lot of online calculators already have this inputted into their calculations and it would be an easy matter for you to use them instead, it is handy to know how to do it yourself, and it is pretty easy anyway.

What is the Rule of 72?
It’s simply a rule for calculating when an investment doubles. Assuming you add nothing more to an initial investment, this rule will tell you, based on the interest rate used, when that investment will double in value, in years.

Please note that the rule assumes that you are using compounding interest and not simple interest, but I would say every savings account and investments uses compounding interest these days so it is a safe bet that yours does too.

The Formula
Calculating this rule is pretty easy, you simply divide 72 by the interest rate (given as a percentage).

To give a simple example, say you had $100 in an online bank account at 4.5% (assuming the interest rate stayed the same over that time – I said it was a simple example) it would take approximately 16 years for that money to become $200.

72 Isn’t Accurate
Now, I say approximately because the Rule of 72 isn’t all that accurate. It’s close but not exact. The Rule of 69 is a lot more accurate, but 72 divides into a lot more numbers cleanly than does 69, which is why it is used; and for small or approximate calculations it works just fine. So feel free to substitute 69 for 72 when doing this calculation.

If you want to be even more exact, use the number 69.3 – as that is even more accurate than 69.

To use our example above with the more accurate number of 69.3, we get a more accurate answer of 15.4 years, or 15 years and 146 days.

As you can probably tell, for this calculation it doesn’t really matter what the amount of money invested is. It will work with any amount at all.

Image Credit: stuartpilbrow

Keeping Track Of Your Money

Russ — Fri, 02 Jul 2010 22:30:19 +0000

It seems like you never have enough money. You get to the end of the week (or fortnight or month) and you are hanging out to get paid again.

I think most of us are living from pay-to-pay or have done so at some point in the past. I know I have.

We try not too, but mortgage, rent, bills, school payments, rates – they all seem to come up just when we least want them to. And that leaves us relying on credit or eating like a pouper until the next pay day.

There is a way out of this though and that is through budgeting. Budgeting is important because it allows you to see where your money is going and control what goes where.

I will not go into budgets in this post however, instead I will let you know about one thing you can do to make your budget a little better and save money at the same time.

Tracking Your Spending Habits
To create a great budget that suits you, you need to know your spending habits. There is no point budgeting $50 on food per week if you spend twice that, or putting aside $100 for the car payment when it is $120 – it’s not accurate and it will leave you short.

To really get to know your spending habits you need to keep track of them.

I can hear the groans from here. Okay, you don’t have to do this forever (unless you want to), but you will need to do it for at least 2 weeks. I did this for 3 weeks and it showed me exactly where I was bleeding cash, allowing me to plug the hole and save much more.

The Easiest Way
There are a few different ways you can keep track of what you spend but I find the easiest way for me is to keep pen and paper with me everywhere I go and write down what I spend money on each time I spend it. Keeping this in your wallet or purse is a good idea.

Other Ways
Other ways of keeping track of your purchases is by keeping all your receipts, using Excel or similar spreadsheets, or using online software.

Be Accurate
Which ever way you choose to keep track of what you spend you need to be as accuarate as you possibly can. Write down everything you spend money on. Even if it is $2 to a charity money collector on the street. It all adds up.

At The End
At the end of the two weeks (or whatever period you choose for yourself) collect all your data together and total it up. If you are anything like me, you may be more than a little shocked at how much money you truly spend.

Categorize
Next, create categories for what you spent money on. These can be whatever you like but the more detailed they are the more you will get out of this exercise. But try not to obsess over this, as there is no right or wrong answer.

Example Categories: Groceries, Petrol, Coffees, Lunches, Electricity, Travel, Rent, Random Food Items, Toll Fees, Bank Charges, Club Memberships, Donations, Work Function. These are just a few of the myriad of categories you could have.

Write your categories down and then place each item and the cost under one of these categories. Then total them up. You will start to see a pattern emerging pretty quickly of where you spend most of your money.

When I did this, my biggest spend by far was on food. So I cut back and stopped spending as much as I had been. I was surprised by how much I saved once I did this.

Once you have done this you will be in a better place to draw up a budget and know where you can easily cut back and save some extra money.

It might be a good idea to do this every so often as we can all easily fall back into bad habits from time to time.

Have you ever tracked what you spend your money on?

Image Credit: woodleywonderworks

Online Accounts and the Best Bank Account

Russ — Wed, 30 Jun 2010 22:30:17 +0000

Over the last five years in Australia online bank accounts have become a popular way for many people to save money.

While access to these online accounts is restricted in many ways compared to traditional transaction accounts, the popularity of internet banking and phone banking has made these online accounts both useful and convenient for a great many people, not to mention it is a great place to park un-used funds or to save for what your want.

What Is An Online Savings Account?
Like more traditional term deposits, an online account earns a high rate of interest, but unlike a term deposit, there is no fixed investment term and you can withdraw your money any time you like.

Growth Of Online Savings Accounts
Since the inception of online bank accounts into mainstream Australia, every bank has been falling over themselves to give better and better interest rates to entice customers to deposit their money with them – offering higher promotional rates for the first few months or offering an even higher rate with high minimum balances.

This overwhelming popularity has even lead to the creation of online-only banks (INGDirect being the most well-known of these) to cater for investors and net-savvy customers who like the idea of doing all their banking online. These banks don’t have brick-and-mortar stores you can walk into and so access to the funds you have with them is via internet banking only.

Choosing An Online Bank Account
With the abundance of choice that is around currently it can be hard to choose the best online bank account for you. While it looks daunting, most of them are basically the same – they all offer high interest rates and all are only accessible via online or phone banking. Where they differ the most are the conditions they have attached to them – some have many, while others have none at all.

Be Careful Of Hidden Conditions
For my money, it is best to stay with those online accounts that contain few or no conditions, as they offer similar competitive rates combined with the peace of mind that comes with not having to worry about whether you have jumped through all their hoops.

The most common conditions are based around bonus interest rates, giving you a higher rate if you successfully meet them. But these can be confusing for a lot of people and generally if you don’t meet the conditions you forfeit the bonus interest for that month (usually earning you less than you would of earned with a bank account with no conditions).

If you love being an active participant in your money and you have the time and effort to devote to checking your accounts weekly then by all means look into the bank accounts that offer you bonus interest, but if you are like me and want a more minimal, hands-off approach to your money and investments, then have a look at the bank accounts below for a great selection from some of the most well-known Australian banks.

Australian Bank Offerings for Online Accounts

Commonwealth Bank
Australia’s largest bank offers up only a single online banking account, called NetBank Saver. Like most online saving accounts it has no fees but needs to be linked to a transaction account.

Westpac Bank
Called the Westpac eSaver, this online savings account must be linked to a regular transaction account but has no fees itself.

ANZ Bank
ANZ has their Online Saver account which like most saving accounts attracts no fees, offers a good interest rate but needs to be tied to a transaction account.

NAB
iSaver is NAB’s online savings account and like most other banks, is free of fees but must be linked to a transaction account.

BankWest
BankWest has an online saving account, called TeleNet Saver and is much like most other bank’s offerings – no fees and must be linked to a regular transaction account.

Suncorp Bank
Suncorp Bank has a few options when it comes to online savings accounts. The first is called a Sub-Account and is attached to your transaction account, is free and offers a competitive interest rate.

The second is called eOptions and is a completely free account which unlike most online savings accounts does not need to be attached to a transaction account, which means it is completely free of any account-keeping fees.

The third option for Suncorp customers is what is called flexiRates. A flexiRate is like a term deposit in that you set a period of time that you lock away your money and are rewarded with a higher interest rate. The advantage of this over a term deposit is that you can choose how long you lock it away. These rates are available with both the eOptions and Sub-Accounts.

St George Bank
Direct Saver is St George’s online savings account and has no account-keeping fees associated with it. What’s more is that you don’t need to have any other St George account attached to it.

Who Is The Best?
Looking at basic interest rates, Suncorp offers the highest rate at 4.75% (as of writing), and also offers the use of flexiRates to earn an even better rate.

If you want to include the bonus rate, then Bankwest wins it at 6.15% for the first 12 months. On the surface this looks pretty good, but you need to link it to a regular transaction account which will cost you a monthly account-keeping fee, and Bankwest seems to have a lot of hidden charges if you do a lot of banking which you may want to look into before signing up.

For a totally fee-free option, Suncorp has their eOptions account with the highest rate of interest and you don’t need to link it to one of their transaction accounts.

NOTE: Suncorp has also recently introduced a new account called the Everyday Basics account which is an everyday transaction account that has no account-keeping fee and gives you access to everything that other transaction accounts do.

So for total account keeping fee-free banking, Suncorp seems to be leading the way.

Do you know of any other great online savings accounts?

Image credit:

My Financial Story

7:30 Report Has Story On Gen Y And Debt

Russ — Tue, 29 Jun 2010 23:11:55 +0000

Just to let you know that the 7:30 Report last night had a story on Generation Y and the level of personal debt that they are racking up. If you want to check it out it ~~should be~~ is available on iView on the ABC website sometime today.

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How To Pay Off Your Debt Using The Debt Snowball

Russ — Tue, 29 Jun 2010 22:30:03 +0000

Debt. It’s like a ball and chain around the neck of your financial freedom. But there is a way you can rid yourself of your toxic debt and be financial independent again. And best of all it’s easy!

It is called a debt snowball and it will make paying off your debt easier than ever before.

The Debt Snowball
So what is a debt snowball? It’s simply a way of paying off your debts – one by one – starting with the lowest debt you have and building to the largest. Just like a snowball gathers more and more snow as it rolls down the hill, you will gather more and more momentum in paying off your debts the further you progress.

What You Need
The first thing you need is a conviction to get rid of your debts. Once you have that, then all you need is to cut down your spending and start using that money to pay down your debt.

Stop Spending
You need to curb your spending. Having a budget is a great way to do this. The more you know about your financial situation and where your money goes, the better off you will be and the more money you will have to pay off your debt.

Cut Up Your Credit Cards
Most people’s toxic debt has a lot to do with credit cards. You need to stop using them and cut them up! It’s the only way you can guarantee you will stop using them. If you are saying to yourself right now that you can’t do that because you rely on them too much, then you need to re-do (of just do) your budget so you can figure out how you can live without them.

There is no point going through this exercise if you are still racking up more debt.

Starting the Snowball
The hardest part is starting, but you will find the more you pay off the more liberated you will feel and the more you will want to pay.

Make a list of ALL your debt. Credit cards, personal loans, HECS, student loans – everything you can think of. And write down how much you owe next to each one. Leave out any mortgage debt as this is not toxic (in most cases) and you can deal with that in other ways.
Then organise the list from the lowest amount to the highest. The first debt on that list will be your first target, and the beginning of that snowball.
Meet all the miminum payments for every debt on the list, except the first.
Pay off as much as you can on that first debt. Throw every cent of spare money at it. And keep doing this until it is paid off.
Once you have paid off this first debt, move on to the next one on the list. And so on. Making sure you meet the minimum payments of the others at the same time – you don’t want to default on a debt.

The Theory
The idea behind this method is that you will be able to pay off your debt in smaller, manageable chunks and get a feeling of achievement after paying off the smaller amounts that will spur you on to pay off all of your debt.

This Really Works
And trust me on this – it works. This is the way I finally used to pay off my $10K worth of debt, and it ended up taking a shorter time because I became so focused on the mission of eliminating my debt that I paid it off quicker than I thought possible. And you can too.

Some people will tell you to pay off the debt with the highest interest rate first as it will save you money in repayments, and it probably would, but I have three rebuttals to this:

People are human, and have all the psychological foibles that go along with that, so common sense doesn’t always work in practice.
Once you start paying off each debt you may just get obsessed by it like I did and get inspired to pay off more, thus paying it all off quicker than you would of normally (thus saving money)
This method works!

That’s the snowball method of paying off debt. Simple and effective.

Help Make It Work
But it will only work if you have the spare money to pay off more than the minimum amount of whatever debt you are focusing on.

To do this you need to cut your spending and channel that extra money into the debt. This may mean going without for a little while, but that is a small price to pay in the short-term for long-term happiness and financial freedom.

Have you tried to pay off your debt before? What method did you use?

Image Credits: House Of Sims, kamshots

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