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tag:blogger.com,1999:blog-70167935537013154622017-07-23T20:33:29.659+10:00Prosple BlogMoney savings tips and personal finance tricks.Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-5337629823915238802013-01-17T17:54:00.000+11:002013-01-17T18:00:07.000+11:00New Years ResolutionsDid you make a New Years resolution? Prosple did. And it's to save you money.

Its a sad fact that 88% of New Years resolutions fail. So today, we're making it our mission to help you with some of the most common resolutions, so that we can all be a part of the 12%.

1. Eat better

In 2011, Australians spent a whopping $37 Billion on takeaway food. That's about $1700 for every man, woman and child in Australia. Not only is that a lot of dollars, it's probably not the best nutrition.

How can you limit your spend? My solution is online grocery shopping. It's an absolute dream. Skip the queues, the impulse buys, the parking hassles and check out Woolies and Coles online. Search with text for your groceries. Save your list so that next week's shop takes seconds. Then book your delivery for the next day - you can generally specify a 2 or 3 hour window. They even bring your groceries right onto your kitchen bench.

The future is here people. And it's online grocery shopping. Get on it.

2. Quit smoking

Smoking is killing you and your wallet. It's time to quit. A pack a day is now a $6,000 per annum habit - that's a great overseas holiday for 2, or a nice little nest egg.

Quitting is easier said than done, and luckily this author has never had to go through it. Quitnow is a government tool that explains why you should quit. You can call the Quitline 13 7848 for more info. And make sure you hook yourself up with nicotine replacement products (you can buy them on your online shop!)

3. Exercise more

I've heard this resolution all too often. The key is to shake things up - you've had plenty of opportunities to get fit and you haven't, so you need to try something new.

Joining a gym is your first port of call. It doesn't come cheap, though; a gym like Fitness First will set you back $20-$30 a week. Anytime Fitness generally runs a little cheaper and has longer opening hours, but there aren't as many of them. For a cheaper alternative, check out uni gyms; Sydney Uni Sport and Fitness, for example, runs about half the cost of Fitness First and has a pretty decent offering - and you don't need to be a student.

While it can be more expensive, personal training can be a good option to get you back into a fitness routine, costing around $30-$50 per hour. If you don't want to join a gym, classes like pilates or boot camp are another alternative, and generally set you back around $10-$25 per session.

But fitness can be free! Ride a bike, walk your dog, go for a swim or use the outdoor gym equipment at parks. Setting up a home gym can cost less than a year's membership at a gym, and generally last you much much longer.

The important thing is to break the status quo - start something new and get active.

4. Drink less

Australian culture is pretty drink-heavy. According to the ABS, the average Australian spends $31 a week. That's $1600 a year on alcohol. I'll admit it, I'm probably a decent level above that average. Here are some things I've tried to minimise the booze:

Substitute every second drink for water, this could halve your drinking spend (saving the average Aussie around $800 every year).

Count the drinks you have in one whole week, and try to reduce the amount by a third for the next week.

Bring a fixed amount of cash and leave your card at home. That way your sober self can pre-emptively cut-off your drunk (and less financial prudent) self.

5. Save money

This is what Prosple is all about, whether you're Comparing First Home Saver Accounts, or Comparing Credit Cards, we're here to save you cash.

There's an easy way to set yourself up for saving - I call it the 20% Rule. As soon as you get paid, take 20% of your income and put it straight into your savings. I split this amount into 2 accounts - I put half of it into a 'fun' fund with my regular bank, and the other half into an 'out of site' bank account with a different bank for long-term savings. You can compare the best savings accounts on Prosple right now. If you have any major outstanding debts, it would be best to sort them out first - if it's credit card debt, make sure you listen to our Podcast on how to get out of credit card debt quickly!Camilla Phillipshttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-12673245564227968002012-12-19T10:19:00.001+11:002012-12-19T15:52:40.308+11:00Q&A: Can I get a Health Care Card?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 firstname.lastname@example.com.Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-54410371159056258322012-12-18T16:16:00.000+11:002012-12-18T16:17:07.931+11:00Christmas on a BudgetChristmas 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.

MyUS.com 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.

Kiva.org 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.

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.

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.

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!
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-2449615387768436812012-11-27T11:23:00.000+11:002012-11-27T14:29:15.737+11:00Should I buy a car or use GoGet?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 annum. More 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.

Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-42590070000233485482012-11-22T17:56:00.001+11:002012-11-22T18:03:59.530+11:00Getting discounted car rentalsWith 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!

University of Sydney Thrifty Discounts

ANU Car Rental Discounts

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.Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-43094471793331469092012-11-22T17:41:00.002+11:002012-11-22T22:16:48.189+11:00How to find cheap flightsCheap 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!
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-58692436991920529752012-10-22T14:46:00.005+11:002012-11-15T11:36:59.798+11:00Do i qualify for Youth Allowance?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.
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-38893965018453889522012-09-27T10:50:00.002+10:002012-12-10T16:40:07.181+11:00Avoid Bank Fees when Travelling OverseasWhen 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.Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-1776071785689600482012-09-19T15:13:00.000+10:002012-09-26T12:04:49.346+10:006 Things That Gina Rinehart Could DoGina 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 Kiva.org - 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!Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-71005872001895600562012-09-17T16:14:00.001+10:002012-09-26T12:05:29.084+10:00HECS Debt. 3 Tips on making it work for you.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.
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-2891661546381617152012-08-23T10:59:00.000+10:002012-09-19T16:36:12.414+10:00Negotiating your bank feesThe 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:

Compare Credit Card

Compare Savings Bank Accounts

Compare First Home Saver Accounts

Compare Super Funds

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!
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-73493489406994948012012-08-01T10:09:00.001+10:002012-09-19T16:36:39.357+10:00Haven't done last year's tax return?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:

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.

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.

You can download e-tax 2012 from the ATO website.

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.Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-4724067483560239622012-06-15T10:28:00.002+10:002012-09-27T15:43:31.560+10:00Should I buy shares?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.Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-14347308579168683852012-06-06T15:41:00.000+10:002012-09-13T17:09:51.743+10:00Prosple wins government prize for TheOpenBudget.orgThis weekend past, Prosple competed in Govhack, a 48-hour competition to produce new applications using public government data. We built TheOpenBudget.org (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.
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-17422239640052220732012-05-18T11:13:00.003+10:002012-10-08T08:26:07.134+11:00How much are Flybuys worth?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).

Simpler?

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.
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-16232055785435328262011-10-25T14:34:00.000+11:002012-09-19T16:38:51.260+10:00Should I get private health insurance?Turns out most of us have no idea how Private Health Insurance works.

The reality is that Private Health Insurance is an extremely complex product. In fact, so much so that many people we spoke to while researching this topic (private insurance policy holders, doctors, and insurers themselves) couldn't really explain what exactly it does.

Given this, we've found that many purchasing decisions about Private Insurance aren't particularly well informed; purchasing decisions seem too often to be guided by emotion and half-truths rather than the real underlying economics of the product.

Our goal at Prosple is to help people make the best decisions for themselves as consumers. So today, we're shining some light on the murky world of Private Health Insurance: to understand the product, to highlight its real benefits and to dispel the myths.

It's two different products, really.

There are actually two very different types of Private Health Insurance: Hospital Cover and Ancillary or 'Extras' Cover.

Hospital Cover helps you pay for expenses you incur as a patient in a private hospital (though it will almost never cover all of the costs - more on that later). It's important to know that Hospital Cover doesn't admit you to a highly privileged Private Patient Club. You do not need private health insurance to be admitted to a private hospital; Hospital Cover simply helps you pay the costs associated with your admission and treatment.

Ancillary or Extras Cover helps you pay for the cost of outpatient medical treatments that aren't covered by Medicare: dental, optical, physio, chiro, osteo, natural therapies, alternative therapies, some pharmaceuticals and often a few others.

There is a third type of cover (that can often be bundled into either Hospital Cover or Ancillary Cover, or bought standalone): Ambulance Cover. Yep. Ambulances aren't free. The cost depends on distance travelled, the level of care given in the journey and the State within which the ambulance is operating - but is typically $300-$1,000. NB: ambulances are free in Queensland, covered by a $100 p.a. levy added to all electricity bills.

Most insurers offer bundled packages that include Hospital, Extras and Ambulance. However, a recent Choice study found that, in many cases, buying a bundled package didn't offer better value than buying individually - so we like to think of them as separate products altogether.

Of all these covers, Hospital Cover is the most costly, most relevant to your tax situation and the most misunderstood. As such, we'll look at Hospital Cover today, and will get to Ancillary Cover next week.

So, you want a Private Hospital?

The purpose of Hospital Cover is to help you pay for Private Hospitals. So the first question you need to ask yourself is whether there are foreseeable reasons you may want to use a private hospital in the future.

Good reasons to use a Private Hospital

'Elective' surgeries. For many medical interventions that are considered non-urgent, the public system has very long waiting lists to get treatment. Depending on the treatment, the hospital, the seriousness of your condition and sheer luck, the wait can take months and in some cases more than a year. The Government publishes a lot of information on waiting times on the My Hospitals website - see for yourself. In a private hospital with your own doctor, on the other hand, you will be able to get treatment very quickly.

Some of the types of surgeries that are considered elective: wisdom teeth/tonsil removal, knee/hip/shoulder investigations/reconstructions/replacements, gall stone removal, hernia, neurosurgery, heart bypass surgery, and more...

Choice of doctor. In a public hospital, you will be treated by whoever is available at the time. If you want to be able to choose your doctor, and be assured you'll have the same doctor seeing you throughout your treatment, you can do so in a private hospital.

Pregnancy. Many expecting mother choose to use the private system for their pregnancies. The advantage is related to the above: getting to choose an obstetrician and have that doctor see you throughout the whole pregnancy. Some mothers we spoke to also mentioned they had more extensive ante-natal contact as a private patient than in a public hospital. The total cost of the pregnancy in a private hospital can be $2k - $8k (if you don't have private health insurance, it'll be more like $6k - $18k). More info on costs here.

Of course, our world-leading public health system can and does cater for many pregnancies, and does so with no out-of-pocket expenses to the patient (which is just absolutely amazing). Most of your ante-natal visits will be managed by mid-wives, and if you have a low-risk vaginal delivery, you may in fact not see an obstetrician throughout your whole pregnancy.

(Arguably) comfort. Private hospitals are generally more comfortable than public hospitals. You're more likely to get your own room,

Bad reasons to use a Private Hospital

'If something serious happens, I want the best care'. Many of the doctors we spoke to who are familiar with both public and private hospitals said they'd prefer to be treated in a public hospital if they had a serious condition. There were a few reasons for this:

There are more doctors 'around'. In a public hospital, if you are in sudden need of urgent medical attention, you can have a handful of doctors are your bed in less than 5 minutes. In private hospitals, since all doctors are privately engaged by the patients, there are less 'hands on deck' should something go wrong. Of course, the hospital itself employs support staff (nurses and doctors), but there would still be less people on hand

Wide range of specialists available. If you are being treated by a neurosurgeon in a private hospital, but have minor complications with your respiratory system or joints or digestive system or otherwise, your neurosurgeon may tend to provide minor treatment to those complications rather than engage another specialist. In a public hospital, you have a team of healthcare providers with a wide range of specialties on hand to treat you.

'If I have an emergency, I'd prefer to go to a private hospital'. If you have an emergency, you'll most likely end up in the public hospital. Only some private hospitals have emergency wards and they are generally much smaller and less equipped. You could be transferred to a private hospital at a later stage, but if you are in a real medical emergency, you're likely to get the timely treatment you need in a public hospital.

So, what does Hospital Cover do?

Now that we've got a better understanding of the benefits of a private hospital, it's important to understand exactly what Hospital Cover does to assist you in meeting the costs of treatment in a private hospital.

Pays for (generally) 100% of the cost of hospital fees. This is a lot. When you are treated in a private hospital, the Private Hospital will charge you a certain amount for your stay. The amount they charge will depend on the length of your stay and the type of treatment you receive, but can be in the range of $1000-$5000 per day. Your Hospital Cover will pay all of these costs on your behalf, but will sometimes require you, to pay a co-payment/excess, which can be a few hundred dollars a day (and generally no more than $500). This is generally the case for cheaper forms of Hospital Cover.

Pays for 25% of the Medicare Scheduled Rebate for your doctors fees. This is not much. This is where is all gets a bit confusing. Let's explain how this works step by step:

On top of your hospital fees, you'll receive a bill from each of your doctors for the treatments they performed on you.

If a particular treatment is on the Medicare Benefits Schedule, Medicare will pay 75% of their prescribed total benefit to you (even though you were in a private hospital).

Your private health insurer will pay the remaining 25%, so you receive in total 100% of the Medicare Benefits Schedule.

The bad news? Medicare benefits are much less than most doctors charge, so you'll still have a big gap between your benefits and the total cost (this is known as the Medicare Gap and contributes to your Out-of-pocket Expenses).

The Gap is big. Despite your private health insurance, you can still have $1000's of out-of-pocket expenses that you will owe to your doctor. Note that your doctor must get your informed consent to the fees before they perform the treatments.

In rare cases, pay your Medicare Gap. Some private health insurers have arrangements with particular doctors where you will pay no out-of-pocket expenses. The doctor will need to opt-in to treating you under your insurer's scheme, which generally means the doctor will be paid less. These schemes are not commonly utilised.

So, how much will private hospitals cost me?

Insurance won't make private hospitals free. In almost all cases, you will still have significant out-of-pocket expenses when visiting a private hospital, even with your insurance.

Example 1: Wisdom teeth removal

If you were having your wisdom teeth removed from the Mater private hospital in Sydney's North Shore, your hospital fees of around $1,400 would be paid by your Private Health Insurance, but you would be liable for $800-$3,000 of doctor's fees (depending on the doctor). There is no Medicare coverage for dental care.

Example 2: Surgical removal of torn knee cartilage (meniscectomy)

If you were having a knee arthroscopy at the same hospital, private health insurance would pay hospital fees of closer to $2,500. Your insurer would also contribute to your orthopaedic surgeon's and anesthetist's fees, with probably around $200. Medicare might pay around $600, leaving you with another $500 - $2,000 worth of out-of-pocket expenses.

The Medicare Levy Surcharge

The federal government has implemented a Medicare Levy Surcharge of 1% on high income earners to incentivise them to take out private health insurance. You will be liable to pay the surcharge if you:

Don't have approved Hospital Cover with a private health insurer; and

Have a taxable income of more than:

$80k for an individual, or

$160k for a couple or family, + $1.5k for each dependent child after the first child

If you exceed the income threshold for the Medicare Levy Surcharge, you should (at least) get the cheapest hospital cover available. Note that you only need Hospital Cover, not Extras/Ancillary. The cheapest cover for singles, according to this government comparison website, is HIF Goldstarter, at $39.25 per month (for NSW customers). Your total premiums will be $471 each year, which will save you at least $800 in taxes - and potentially more, depending on how much you earn. It's worth it.

Note that the Medicare Levy Surcharge is separate to the Medicare Levy. The Medicare Levy is applied at a rate of 1.5% to your taxable income, and cannot be avoided by procuring health insurance (exemption to this levy is only provided to low income earners, to foreigners or on medical grounds).

The Bottom Line: Should I get private health insurance Hospital Cover?

It's a difficult question, and (as with any insurance) is a personal one; it depends on your appetite for risk. To assist you in your decision making, we find it useful to consider the following 4 questions.

QUESTION 1
Would I otherwise be liable for the Medicare Levy Surcharge?
If you answered yes, you should get (at least) basic level of cover, as discussed above.

QUESTION 2
Would I want to have a baby in the next 3 years? And if so, would I want to choose my own obstetrician and/or have my baby in a private hospital?
If you answered yes, you should get a policy that covers you for obstetrics. Note that most covers have a 12 month waiting period on obstetrics - and you generally need to conceive after the waiting period is over. Make sure you are prepared and sign up for health insurance in advance.

QUESTION 3
Am I likely to need at least one elective surgery in the next 5 years?
If you answered yes, you should get a basic level of cover. This may seem like a strange question (and a difficult one to answer), but it's based on the economics of your premiums. A basic level of Hospital cover costs around $500 per annum, and the amount insurance can contribute to elective surgery is around $2,500. If you receive one elective treatment in the next 5 years, you will (very roughly) break even. You may have an increased need for elective surgery in the next 5 years if you have an existing medical condition, play a sport that has a high risk of injury, or if you have a history of dental problems.

QUESTION 4
If something 'serious' happens in the next 5 years, would I want to be in a private hospital?
If you answered yes, you should obtain a level of cover that is suited to your risk appetite. The cost of a long stay in a private hospital will substantially outweigh your premiums. The good and bad reasons for private hospitals above will help you in answering this question. Remember that the public system caters for (and arguably is better suited to treat) 'serious' medical conditions.

What's your experience with private health insurance? Got a question about insurance that you still don't get? Or got a completely unrelated query? Throw them all at us!

Stay tuned next week as we tackle the other half of Private Health Insurance: the Extras.
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-80750458357014555092011-10-14T15:58:00.003+11:002012-09-11T21:10:11.945+10:00We're back - and we're funded!You may have noticed a distinct lack of finance tips, tricks and insights coming from the Prosple Blog over the past few weeks. Rest assured; we've been really busy behind the scenes pulling together the resources we need to build Prosple into Australia's best online finance tool...

... And we're pleased to announce we've hit a major milestone: we have just secured enough investment to support Prosple's development over the next 6-9 months!

So, what are we going to do?

We're still keeping a lot of our plans up our sleeve (mostly because they're a work-in-progress and we don't want to over-promise!). We're hoping to build a tool that will help you make the best decisions about your money as quickly and easily as possible. Our initial plan is to focus on helping people compare and switch their bank accounts, superannuation and credit cards; as well as providing tools to manage your spending habits and plan for the life you want to have.

We think that managing your finances is a means to an end. There is certainly a distinct minority that enjoys managing money; the rest just want to make sure things are sorted out so that they can live the life they want to life. We want Prosple to be the tool that does that for you - a resource you can trust to save you time, save you money and save you hassle.

For more, check out our mini-tour of what Prosple will be, if you haven't already!

We need you.

The next 6-9 months is a 'proof of concept'. We need to prove that this product works, helps people and is sustainable in its own right - such that we can procure further investment to take it to its next level.

We have no way of achieving this without you. Prosple will require constant user feedback and rapid iteration to develop the really high quality, high usability product we have in our minds. We also need your help working out how we can spread the word about the product (more on this to come!).

What can you do? For now, make sure you've signed up for an early access account. We'll be in touch when we've got news for you. Of course, if you've got some ideas for us/expertise to offer us/anything else to rant about, please make sure you get in touch - we'd love to hear from you.

In the meantime, though, continue to watch this space. We'll be back next week with our regular dumps of finance tips, tricks and hacks that cut through the crap in the world of personal finance!
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-10618105340993372292011-07-29T12:13:00.002+10:002012-08-07T08:11:33.578+10:00Why Captain Compare won't save youSome of you may have seen Captain Compare advertised on radio or on buses in Sydney. Perhaps you've seen the (somewhat painful) advert they've thrown on a lot of the major TV networks.

"Go Captain! Go Captain!" ... Yep, I think they've really captured the zeitgeist of modern Australia.

In spite of these cringey branding decisions, we'd welcome with open arms any attempt to help improve competition between Australia's oligopolic consumer industries and empower consumers to more easily make better product decisions.

Unfortunately, Captain Compare isn't your guy. Why? Hold on tight; we'll fill you in.

1. It's owned by A&G Insurance (hint: they offer products in the very market they're comparing)

It's one of those things that, when you learn about it, you ask yourself: how did someone let that happen? Captain Compare is fully owned by A&G Insurance, who also own a wide range of insurance brands: Budget Direct, Australia Post, ibuyeco, Virgin Car Insurance, Cashback, 1st for Women, Retirease and Ozicare.

But hey, if they're comparing all products equally and fairly, then hopefully their obvious conflict of interest shouldn't affect their results, right?

Uh...

2. They don't compare all products

I don't think our editorial can speak any stronger than their own 'About' page:

As the proud team behind Captain Compare and many of the car insurance brands on this website, A&G Insurance Services is excited to let consumers compare our own award winning car insurance brands [...], right next to other confident providers such as Real Insurance and AI Insurance. Captain Compare will continue to offer all insurers the opportunity to take part. We look forward to growing our list of providers and products in all of our comparison lines.

Yeah, I'm sure they're desperately looking forward to growing their list of direct competitors to their own product suite.

But hey, if they're offering a great comparison engine, then at least there's some utility for consumers there, right? Well, here's the coup de grace in this corrupt, incompetent trifecta:

3. It's not actually useful

Have a look at their credit card comparison tool. This is what we got from it:

It firsts asks you do select a category of card types ('low interest', 'reward cards', 'balance transfer'). But what if a consumer doesn't know which type is best for them?

It then presents a mysteriously unsorted list of cards fitting that category. How do I know which of these cards is the best? The top result? Why?

I can re-sort the results by annual fee, interest rate, or reward points per dollar spent. But don't I want to find a card that has a good balance of these features depending on my situation?

I can enter the how much I spend or how often I pay back. But the inputs are completely relative ('a little', 'moderate', 'lots') - how the do I know if my 'lots' is the same as someone else's?

... We could go on and on. Ultimately, though, we just get the strong feeling they've pumped all their resources into expensive advertising campaigns instead of actually trying to solve a real consumer problem.

Our Philosophy

At Prosple, we're trying to pick up where sites like Captain Compare fall down. We're holding to the following principles very tightly:

It must empower consumers. That means providing information on how products work, what matters and what doesn't when you are comparing them, and how to make sure you get the most out of them (and don't get screwed). If the answer for you is 'you shouldn't have a credit card', then we want to help you get there!

It must compare as much of the market as possible. If we want to drive more competition in Australia, we need to make sure we're covering everyone. Encouraging you, Australia's pro-active consumers, to switch to companies that offer better products at lower prices is the only way to drive innovation in our stuffy oligopolies.

Our business model mustn't compromise the above. We want to build a business that is sustainable: that means it must earn enough money to pay for its costs. But we want to make sure that this doesn't sideline consumers in anyway. We've got some ideas on how to do this, but we're definitely going to need your help to make it work.

We're so close to getting started with this new brand; we've got a lot of really exciting things in store!

So keep watching this space!

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Have you used Captain Compare? Or have you tried other comparison engines? Let us know what you think of them - what you like and what you think they could do better!!Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-44795096070013695192011-07-19T15:01:00.006+10:002012-09-19T16:38:07.929+10:0010 Tips for 2011 Tax timeAs is likely no surprise to you, income taxation is fundamental to making our Australian society work. In fact, 43% of the Government's expected revenue in the 2011-12 financial year is derived from it.

Total government revenue 2011-12. Source

Paying income tax is the responsibility of all Australians such that we can get welfare to the less fortunate, public hospitals, free or low-cost education, critical infrastructure and really expensive, faulty, unused, unnecessary, Australian-made submarines.

It's important to know, though, that the government has designed a series of complex rules regarding the quantum of tax you should be liable to pay. An oversimplification of these rules might suggest that they come from two different sources:

The broad principle that any expenses incurred in the course of earning taxable income should be tax deductible; and

A variety of tax incentives/penalties designed to encourage/discourage certain behaviour (eg charitable donations, private health cover for the rich, having lots of babies, etc.).

It's important that you understand these rules, at least to the extent that they impact you. Ignoring them can lead to two unfortunate results:

You don't pay enough tax. The tax office has powers to review your tax return many years after its submission, meaning that you can still be liable for mistakes you have made many years in the past (they won't simply forgive the amount owing - you'll need to pay it all back).

You pay too much tax. Ignoring the rules might mean you are paying tax on income that the government decided you shouldn't have to pay tax on (and your fellow taxpayers aren't paying tax on). Finding $1,000 worth of deductions to which you are entitled could mean reducing your tax liability by several hundred dollars.

So, on that note, here's our 10 Tips for 2011 Tax Time!

Disclosure: we are not tax accountants or tax lawyers. We can't guarantee the accuracy of this information. When in doubt, consult a tax lawyer or the ATO.

1. Understand the Basics

Gross income. Your whole income before any deductions and before any tax is applied (this amount will be bigger than your 'take-home' cash, that already has tax withheld from it). Gross income includes regular PAYG income, bank interest, investment returns, government welfare, and services you may have charged for as a contractor (if you have your own ABN). See Tip 3 for more.

Deductions. Expenses you have incurred that are 'tax deductible'. This means that the whole amount of the expense is deducted from your Gross income before tax is applied. Conceptually, think of it as netting our the gains of your employment (Gross income) with the costs associated with your employment (deductions) to work out the net amount that you 'really' earned from your employment, in other words your...

...Taxable income. Gross income less deductions.

Medicare Levy. A levy charged to all Australians (1.5% of taxable income), unless you qualify for reduction or exemption. You can qualify if you have a low income, are in medical hardship, are residing overseas or you are a temporary resident in Australia and are not entitled to Medicare. E-tax will calculate your eligibility for exemption.

Medicare Levy Surcharge. An additional 1% levy payable if your taxable income is greater than $77,000 (or $154,000 for couples/families) AND you do not have an adequate level of private health insurance.

Gross tax payable. The total amount of income tax (including medicare levy and surcharge) based on your taxable income.

Offsets. An entitlement that reduces your Gross tax payable by a specified amount. For example, the (unnecessarily complicated) Low Income Tax Offset (best explained here, but you don't really need to know the details - E-tax does the grunt work for you).

Tax Refund / Tax Debt. Your Gross Tax Payable, less Offsets, less total Taxes Withheld (the tax your employer has already paid for you). If this number is negative, you've overpaid tax and the ATO will send you your money. If it's positive, you owe more tax than you've paid and you have to send it to the ATO.

2. Get E-tax

If you've ever done your tax before, you've used it. E-tax 2011 is an application built by ATO that helps you lodge your tax return. The interface is questionnaire-based, and there's plenty of (perhaps overly) detailed help along the way, so if your situation isn't too complicated it's the best way to DIY your taxes.

It's Windows only, though, friends. You (we?) mac-lovers will have to head to your parents house to get it running. (The upside? The costs associated with your journey are tax-deductible! Yep, any costs associated with lodging your tax return are tax deductible.)

3. Declare all your income

If you're working, your employer(s) should give you a PAYG statement that will list your 'Gross Payments' (the total amount of money you earnt, inclusive of tax) and your 'Total Tax Withheld' (a portion of your Gross Payments that your employer didn't pay you, and instead forwarded to the ATO as a tax payment on your behalf).

All your PAYG should obviously be entered into E-tax. However, there are a few other key sources of income that young people should be aware of:

Youth Allowance / Newstart Allowance (or other centerlink payments). Centrelink should send you a statement with your total payments, including any amounts of tax withheld. (Item 5)

Bank account interest. You should include any interest you earned from online savings accounts, transaction accounts or managed fund investments. Often net-banking interfaces will have a section for showing you this exact information. (Item 10)

Personal Services Income. If you have an ABN, and have used it to invoice a business as an independent contractor, you need to declare the amounts you were paid. (Item 14)

4. Deductions: know when you need written evidence

If your total work-related tax deductions are less than $300, you do not need to keep written evidence for these deductions (but you do need to be able to show how you worked it out, if requested).

If you are claiming more than $300 in total work-related expenses, you'll need to keep written evidence. It won't be submitted to the ATO, but the ATO can request for up to 7 years.

IMPORTANT: Written Evidence doesn't have to be receipts. Written evidence can include bank or credit card statements, email receipts or BPay receipts. All of this stuff is easily stored online, should the ATO request it. Additionally, many receipts, like internet and phone services, can be emailed to you instead of sent by paper. This is not only good for the planet, it's great come tax time.

To qualify as Written Evidence, a document must have:

The name of the supplier

Amount of the expense

Nature of the goods or services (if not shown, you may write this on the document before you lodge your tax return)

Date the expense was incurred, and

Date of the document

A credit card or bank statement showing the relevant transactions can cover of all of these points.

Note that special 'written evidence' rules apply for car expenses, meal allowance, award transport payments allowance, and travel allowance expenses. E-tax will give you the details when you get to these questions.

5. Deductions: do you use your mobile phone or internet connection for work?

If you make calls on your mobile phone, or use your home internet connection for work, you can claim the expense as a tax deduction. Your mobile phone statements, or your creditcard statements, can count as 'written evidence'. Put this under Item D5 - Other Work-related expenses.

If you use a mobile phone or internet connection for both personal and work purposes, you need to attribute a percentage of the total cost to work-related expenses. The written evidence required for this is an analysis of 4 weeks of usage - dividing up how much usage was work-related and how much was personal. The % split can then be used for the whole year's worth of expenses. The ATO suggests looking through a phone bill and working out the % of calls that were work-related vs personal, but it's somewhat ambiguous now that mobile phone plans include add-on services like data, SMS, etc - just make sure whatever approach you take is defensible if the ATO requests your documentation.

6. Deductions: Use computer hardware/software for work? Welcome to the whacky world of depreciation.

If you use your home laptop or desktop computer and peripherals for work, you can claim the cost of these goods as a tax deduction. While depreciation is scary on the surface, this is a good example of something that is actually fairly simple being presented in a crazily complex way.

Firstly, you need to be able to divide the expenses based on personal/work usage. This can be done using the sample 4 week sample ratio methodology as above. The ATO's website suggests keeping a diary of usage for 4 weeks then calculating the ratio based on time. Again, just make sure you could defend your approach.

If the total cost if less than $300, you can claim the total expense immediately as a full deduction in this financial year. Answer 'yes' for Item D5 - Other work-related expenses, and put the item in table at the top of the next page. No depreciation needed. Easy.

If the cost is greater than $300, you need to depreciate the expense over-time. In simple terms, if you buy a $1,500 computer that will last 3 years, you can claim $500 this financial year AND $500 in the next two financial years.

E-tax will handle the calculation for you, but it's not as easy as the above example suggests. Go to Item D5 - Other work-related expenses, then click the 'Decline in value' button under the table. This opens up a worksheet that needs to be completed for each item that you are depreciating. Here's a run through of the key information you need to fill out (let me say again: it seems much more complex than it really is):

Description of the asset

Personal use percentage. As per the methods described above.

Date acquired

Cost

Asset type. Pick from the drop down list. Computer devices are 'Other than motor vehicles'.

Depreciation rate and method. You can choose whether to use Prime cost (aka Straight line) or Diminishing Value depreciation. Diminishing Value will give you a bigger deduction in the year of purchase, but the deduction will decline over time. Prime cost will give you the same deduction in each year. We've generally chosen Diminishing Value to see a big deduction in the first year, but if you know that you're likely to have a much larger tax exposure in later years, it may make sense to choose Prime Cost.

Effective life in years. You can make your own estimate of effective life of the asset (for computers, 3 or 4 years is good). The commissioner has made a bunch of recommendations, too.

Have you self-assess the effective life for this asset? Yes. Yes you have.

The remaining fields should be calculated for you. If you have more assets you want to list, click 'Create new worksheet' on the left. Otherwise, click 'next'.

Bonus Tip: you can easily roll-over this information for next financial year, and E-tax will remember how much to depreciate in future years. Just make sure you keep you .TAX file so you can import it (or 'roll-over') next year.

7. Deductions: Find your donation receipts

Given money to a charity? Have friends hit you up with their Movember/Dry July/Oxfam work campaigns? Search through your inbox to find your donation receipts, as all these donations are tax deductible. Chuck them into Item D9 - Gifts or donations.

8. Deductions: Work-related books, magazines or equipment?

You can claim the cost of work-related books, work-related journals and/or work-related magazine/newspaper subscriptions.

Do you have a work brief-case or workbag? Tools that you bought yourself for work? A travel suitcase you use for work? These can also be claimed (but remember you need to depreciate any equipment whose total cost is greater than $300, see Tip 6).

All of these expenses go in Item D5 - Other work-related expenses.

Work things you can't claim:

Travel to and from work is generally not deductible - travel expenses are only claimable if it is incurred in the course of your employment, to move between two different jobs, OR if you need to use it to carry bulky tools or equipment that you can't leave at work.

No, your work clothes (and laundry) aren't deductible! You can only claim a deduction for clothes and their laundry if they are

compulsory work uniforms that are unique (designed and made only for the employer) or distinctive (the clothing has a logo on it and isn't available to the public), OR

occupation-specific clothing that is not 'everyday' in nature and would allow the public to easily recognise your occupation (eg chef's checked pants), OR

protective clothing, ie clothing you wear to protect yourself from the risk of illness or injury posed by your income-earning activities (using an expensive suit to protect yourself from humiliation does not count, sorry).

9. Deductions: Getting Austudy, ABSTUDY, or Youth Allowance?

If you are receiving Austudy, ABSTUDY or Youth Allowance to study, you can claim the cost of textbooks, stationery, student union and course fees, and the decline in value of the computer equipment you use for study. This is brand new policy as a result of a High Court challenge last year.

Put this stuff in Item D4 - Self-education expenses.

10. Complex situation? Get help.

Tax accountants do this for a living. If you've got a complex situation (eg kids, investment properties, sole trader businesses...) then it's prudent to see a tax accountant. Not only can they generally pay for themselves in claiming deductions you didn't know you were entitled to, their fees (and all expenses incurred in engaging them) are a tax deduction.

You can also consult the ATO's fairly clumsy website. The help documents embedded in the E-tax software package are also quite useful for the nitty gritty issues that might pertain to you.

Done? Now: Prosple needs you!

The Beta version of Prosple is live. Prosple will assess your financial health, and give you a bunch of targeted recommendations on how you can make your money healthier. We want your feedback on our tools, and how we can make them even better.
Create your financial profile on Prosple now >

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Need more info on some of the things we've talked about in this post? Got some tips you think we've missed? Please let us know in the comments below!!
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-24497315164895843282011-07-04T12:13:00.005+10:002012-08-07T08:11:03.530+10:00The free perks that come with your cardMany premium credit cards come with a couple of really valuable extras: complimentary travel insurance (when you purchase return airfares with your card), extended manufacturer warranties, loss/theft insurance on purchased goods and free concierge services.

Now, before you say "Shut your mouth, Prosple! Cards with those services are only for the filthy rich!", many of these freebies can actually be worth much more than the additional annual fee cost that is usually associated with these cards. Let's go through each of the premium benefits one-by-one so you can understand just what you can get (and how much it can be worth to you).

1. Travel insurance

Many cards include complimentary travel insurance spanning anywhere from 3 to 12 months, if return airfares are purchased with your credit card. This is possibly the biggest benefit from premium cards depending on how much you travel.

For example, our dear friend Hugo is travelling to the americas for 6 weeks, spending most of his time in the US. Travel insurance with Covermore would cost Hugo $302, with an excess* of $250. However, if Hugo had the Westpac Earth Gold card, and paid for his flights with that card, he'd get a very similar level of insurance coverage free of charge, with an excess of $200. The annual fee for the Westpac Earth Gold is only $125, meaning he's saving $175 - PLUS Hugo will earn Qantas Frequent Flyer points on all purchases on the card (including the flights he just bought).

*For the less insurance-literate of us, an excess is an amount payable by you in the event of a claim. For example, if you lose a laptop during your trip worth $2,000 and need to claim back the amount on travel insurance, you will receive $2,000 LESS the excess of $250.

2. Extended Warranty

We're fairly public about our love for Apple products. One big annoyance, though, is the limited and expensive insurance available with the product - Apple Care for a Macbook can cost more than 20% of the laptop cost itself.

Hugo just told us that he has cancelled his overseas trip (and luckily hasn't lost any money on the insurance, since he got it for free from his card anyway), and has decided to spend that money on a Macbook for use with Uni studies.

He buys the $2,099 Macbook Pro, then ponders over the option to bundle in 'Apple Care' for $449. This will extend his warranty from 1 year to 3 years, and will provide him with technical support by phone for those three years too. His other option is to buy the laptop using his Westpac Gold card (annual fee $125), which will automatically extend the manufacturers warranty by 12 months.

Hugo does some more investigation and decides to upgrade his credit card to the Westpac Earth Platinum (annual fee $250) - this card provides an additional 24 months manufacturers warranty. So he's now receiving the same warranty as apple care for $199 less (PLUS he's earning even more Qantas points and can now get upto 6 months of travel insurance, instead of 3...)

Note that the extended warranty applies to all purchases with a warranty - it also covers the bed, fridge and TV that Hugo buys for his college room that year.

3. Purchase Protection

In his first week at college, Hugo gets uncharacteristically inebriated and his Macbook mysteriously vanishes. Unfortunately for him, theft is of course not covered by the manufacturer warranty.

But his Westpac card saves him thrice - the card comes with four months of free theft, loss or accidental damage protection (up to $125,000 of total claims covered per annum). This means Westpac insurance will replace his laptop at no cost.

Wait a minute, are you in bed with Westpac?

Nope. We've just highlighted it as an example here; in terms of insurance, however, it is one of the best value for money cards on the market (no other card has 24 months extended warranty, for example). Commonwealth Bank actually has the longest complimentary travel insurance policies on its platinum cards - up to 12 months.

So what's the best card for premium services? It depends a lot on you. Fortunately, our credit card comparison tool is well on the way: it allows you to filter cards based on these premium services. You can use the tool to find the card that saves you the most money, but that has at least 2 months travel insurance and 12 months extended warranty, for example.

Interested in being involved in our beta testing? Let us know now! We're currently building our beta testing database. NB: if you've already emailed - don't worry! You're on our list.

Anything else I should know?

Two important things to keep in mind:

Always compare the actual insurance policies available on each card. Claim limits and excesses can vary substantially between policies.

Always keep the receipt for your significant purchases. All insurance policies require that you have proof of purchase.

Have you ever used insurance or extended warranties that come free with your credit card? Let us know in the comments below!
Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-43290319458814018432011-06-20T15:26:00.006+10:002012-09-11T16:09:43.799+10:00Should I get a car loan?Post-GFC, 'debt' has become a much naughtier word: at best, a necessary burden; at worst, the harbinger of financial ruin.

Debt does have a positive role to play in personal finance, particularly in building investment assets (and, of course, most often for property). But how about using debt to finance depreciating assets?

According to this recent Commonwealth Bank advert, it's the best idea in the world!

Something about this ad just screams 'evil'. Perhaps it's the baritone, sensual, Shakespeare-inspired narration; perhaps it's the 'Meet Joe Black' suited Commonwealth Bank personification that happily hands the car keys to the helpless, naive youth; perhaps it's the allusion in the final line ("Happiness...") that a personal loan can bring young people all the joy and fulfilment that comes with the immediate gratification of acquiring things you can't afford, without any future consequence.

Yep, it's probably that last thing.

What's really so bad about buying a depreciating asset with debt? It's fairly simple: you're burning money on both interest (the money you owe the bank for your loan) and depreciation (the amount of value you lose in your car each year), and that means losing a lot of wealth.

Meet Kim and Tim

Kim and Tim are twins. They both have savings of $5,000, both have $400 per month of spare income to go toward savings or assets, and both desperately want to get some wheels.

Kim is an aspiring high-roller and wants a brand-spanking new VW Golf for $22,000. She puts in her $5,000 cash and gets a $17,000 personal loan from the good people at the Commonwealth Bank. Her $400 per month is going to the bank to pay off the loan

Tim, on the other hand, wants to save up for some property; he opts to buy a used car online for $5,000 - a 2001 VW Golf. He puts his $400 per month into an online savings account.

Meet Kim and Tim, 5 years later

In just 5 year's, Tim's wealth is now more than double that of Kim's. It's clear that Tim will be better off, but it's quite stark how big the difference really is.

Each person's net wealth can be considered as the sum of their car's value and their cash savings, less any outstanding debts they have.

Overall, Tim ends up with around $33k, made up of $30k in cash and $3k value left in his car. Kim's car will only be worth a bit over $12k, and she'll have just $3.5k in savings - less than half the total wealth of Tim.

So who took Kim's money?

There are two things that really hurt Kim.

1. Kim lost nearly $10k in her car's depreciation, Tim loses only $2k. We've taken our depreciation assumptions from a Choice guide to car depreciation: you'll lose about 14% of the car's value in the first three years, then about 8% per annum for the remainder. In reality, the cliché is true: as soon as you drive your car out of the dealership, you instantly lose a good chunk of money.

2. Kim will pay $5k in loan interest and fees; Tim will make about $4k in savings interest. It's well known that the path to wealth is to accumulate income-generating, capital-gaining assets, rather than load up with debts for depreciating assets. The difference in Kim and Tim's interest exposure is clear evidence of this.

A blow-by-blow account

Don't believe us? For the more numerically curious of you, we've mapped out Kim and Tim's financial position for the first five years to show you what drives the changes in their wealth.

What about running costs?

Yes: in this analysis, we've ignored the running costs of the cars. A new car under warranty often has free service for the first few years of the car's life, and registration doesn't require an inspection. On the other hand, comprehensive insurance can be more expensive (because the car is worth more). A newer car may also be more fuel efficient. While all these things are true, even if Tim's running costs were $1k more than Kim's every year, he would still be well ahead of Kim's financial position at the end of year 5.

What's your experience with car loans or personal loans? Do you have one? Has it worked for you? Let us know in the comments!Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-61675258518059974942011-06-17T13:12:00.002+10:002012-08-07T08:10:28.724+10:00Revisiting First Home Savers Account: now an even better ideaBack in April, we wrote a post about the government's First Home Savers Account.

We talked about how it's good for two reasons:

For every $100 you put into the account, the government puts in $17

The tax payable on the interest earned in the account is capped at 15%

The downside to the scheme is the '4 Year Rule' - you need to make contributions of at least $1,000 in four different financial years before you could use the money to buy a house; and if you bought a house before then or changed your mind, the money would become locked up in your superannuation.

What's changed?

A friend of Prosple pointed out this recent change to the scheme which has relaxed the '4 Year Rule'. If you buy a house before you have completed all 4 years, you can now withdraw the money after the remaining years have elapsed to use toward mortgage repayments - meaning that it's not locked away in super until your retirement.

So is it a good idea now? If you are sure that you will one day want to buy a home in Australia, then it's hard to see how this is a bad idea (in fact, we're going to open one up right now).

Want another reason?

The 2010-11 Financial Year is coming to an end. If you open an account now and make at least a $1,000 contribution before the end of June, you will have already satisfied one year of the 4 year requirement, meaning there's only a 3 year wait until you can get your funds.

Are you going to open an First Home Savers Account? Let us know in the comments!
Rob d'Apicehttps://email@example.com:blogger.com,1999:blog-7016793553701315462.post-69606355093833749522011-06-09T12:25:00.003+10:002012-08-07T08:10:13.357+10:00Prosple on 2UEProsple was on 2UE last week discussing the value of Flybuys and reward credit cards.

Have a listen below (EDIT: or listen to it on the 2UE website)

<embed height="27" src="http://www.google.com/reader/ui/3523697345-audio-player.swf?audioUrl=http://dl.dropbox.com/u/16375737/Rob%20Dap%20on%20with%20the%20Two%20Murrays.mp3" type="application/x-shockwave-flash" width="320" wmode="transparent"></embed>Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-87680226685716806862011-06-02T14:54:00.006+10:002012-08-27T16:50:30.416+10:00Are Flybuys actually worth it?How many times have you been asked whether you have a Flybuys card? "Too many times, dear friend!" is what I'm imagining you saying, if you were somehow reading this as-yet-unpublished blog post. So today, we put pen to paper to help you demystify the truth behind the value of the FlyBuys Scheme.

The Math

To calculate the value of FlyBuys, there are three things we need to know:

Actual value to you
= [A. Your spend] x [B. Reward point earn rate] x [C. Value of a point].
A. Your spend
Flybuys points can be accrued at major Coles brands: Coles, Kmart, Target, BiLo and Liquorland. The amount of spend obviously varies for each person, but (at the risk of exposing the author's alcoholism or penchant for expensive deli goods) the author of this post has calculated his total spend at Coles and Liquorland for the previous 12 months as $978, so let's use $1,000 as a plausible annual spend.

B. Reward point earn rate
It's 2 points for every $5 - or 0.4 points per dollar.

C. Value of a point
Again, this depends on what you redeem with your points. Ironically, Flybuys' travel rewards are pretty average - domestic travel is available with Qantas or Virgin Blue, but international travel is very limited. All Qantas travel still incurs taxes, etc. We've calculated that redeeming points for a return trip to Brisbane equates to a point value of about $10 per 1000 points* (or $0.01 per point). FYI: Redemption for vouchers and other rewards is also possible, but equates to a point value of about $6-8 per 1000 points - a few dollars less than flight redemption.

*For you data-geeks out there: return flights to Brisbane is 22,500 Flybuys points PLUS taxes with Qantas. The same flight through the Qantas website is $225.05 PLUS taxes. Therefore 22,500 points = $225.05, which can be reduced to roughly 1 point = $0.01.

So, returning to our formula above:

Actual value to you
= [A. Your spend] x [B. Reward point earn rate] x [C. Value of a point]
= $1000 x 0.4 x 0.01
= $4.00

The Horrible Truth

Yes, you read that correctly.

In our example, Flybuys will return about $4 worth of rewards per annum.

The Lesson

Don't be generous with your trust. When an offer is confusing enough that you give up doing the math in your head, consider it a red flag.

Our goal is Prosple is to help cut through the crap. That's why we have this blog, and that's why we are working furiously building a tool that can help you make decisions like these 24/7. For credit cards, for example, we put all available cards on a level playing field and produces a simple $ amount that each card will ultimately mean to you given your situation. You don't need to think through reward points, annual fees, interest rates, signup bonuses, etc. We're really excited about it because there's nothing like this in Australia (but more on that later!).

Got a Question?

This post came about in response to a reader's question. Have you got a question that you're quietly sitting on? Hit us with it! We'd love to know what information you all need to dominate your financial life in this complex (and often manipulative) commercial world.

Until next time!Rob d'Apicehttps://firstname.lastname@example.com:blogger.com,1999:blog-7016793553701315462.post-91822123104009080522011-05-25T15:35:00.002+10:002012-08-07T08:08:52.516+10:00Understand the pitfalls of your credit card's Interest-free PeriodDo you sometimes get interest charges on your credit card account when you think you shouldn't have? You may be falling into a common trap with your card's interest free period that's buried deep in the fine print.

Already bored? Well, mismanaging your interest free period could cost an average credit card user up to $70 every month. That's a lot of cappuccinos.

What is an "Interest Free Period"?

It's the period in which purchases made from your credit card do not accrue any interest. It generally stretches from the day that the purchase was made to a set number of days after your monthly statement was issued (typically 10-15 days). It means that, if you pay off your monthly balance in full within the required window each month, you will never pay any interest on your purchases.

Like. But what's the catch?

It's simple: you don't always get an interest free period. This means you start racking up hefty interest charges from day 1 of your purchase. There are actually 3 completely different situations where the bank won't give you an interest free period, and it's important you know about all of them.

1. When you have an outstanding balance
It's very poorly understood by consumers, but it's the same with all cards: If you don't pay off your balance in full for a particular month, you will forfeit the interest free period for the following month.

Here's an example: Caroline spent $2,000 on her card last month, and had until 20 May to pay off the balance in full. Unfortunately, Caroline is addicted to poor quality drama and spent the week watching Offspring episodes back-to-back instead of paying her bills. It's now 25 May.

Caroline can't stay mad at Offspring's delightful cast and crew for long

Caroline now has two problems:

First, her $2,000 debt is now accruing interest, costing her about $1.21 per day or about $36 in total if the debt runs for a whole month; and

Second, all her expenses this month now have no interest free period. If she spends another $2,000 this month on her card (assuming it's spread evenly over the month), this could amount to another $36 in interest charges.

By forgetting to pay off her balance, Caroline could have cost herself up to $72 in just one month. Lesson: pay off your balance in full. You forgot? Pay it off right now anyway (that fixes problem 1), and put in any extra money to slip your balance into the black - this means new purchases will be 'instantly' paid off and won't accrue any interest. And make sure you pay off any remaining balance in full at the end of the month to avoid entering an interest charge spiral.

2. When you have a balance transfer
Did you dutifully obey the advice of Prosple Credit Card tip 3; that is, balance transferring your debts to minimise interest? Well, there's a big catch with balance transfers - don't spend anything on the balance transfer card when you get it. One big reason is that you don't get an interest free period when you have an oustanding balance transfer amount. That means you're instantly racking up interest on your brand spanking new card until you knock off the huge chunk of debt you wheeled over to it.

The second reason? It's about the debt-repayment order on a credit card, which is a blog-post in itself, but put simply: when you make a repayment to the balance transfer card, the bank will use your money to pay off the (very low interest) balance transfer amount in full before you can pay off any of the (very high interest, with zero interest free period) new purchases. Yes, it's unscrupulous. But now that you know, go ahead and be unscrupulous right back to them.

3. When you get a cash advance
Credit cards 101: don't get cash advances. Cash advances attract a higher interest rate. They often incur an instant fee over at least a few dollars, and sometimes much more. And, on top of that, they don't attract an interest free period.

How can I remember to pay?

Paying your bill off in full can be particularly difficult for us internet-o-philes, because the reminder of the monthly due date can be less obvious in your email inbox than in letter form.

We suggest putting aside 20 minutes each week to check in on your finances. This means checking your internet banking site to see if you have anything due, and processing any bills/payments/boring stuff that you need to get out of the way. A Sunday night often works well, or first thing monday morning to ease yourself back into the week.

Does this sound outrageously boring to you? You're thinking about it the wrong way. This 20 minutes per week is a small investment to stay on top of your money. Trust me, if you do it right, it's going to be the most lucrative 20 minutes of your week. More on this topic down the track.

What else could you do in those 20 minutes?

Get your money diagnosis at Prosple.

Manage your sharehouse (with dapShare). If you're living in a sharehouse, this is an absolute must, people!

Like us on facebook.

Rob d'Apicehttps://firstname.lastname@example.com