2012. Didn’t that used to seem like a long way away?

So the New Year has started, you’re back to working hard (or thinking about being on holidays while back at work), it feels like you never had a holiday, and all that stuff. Well, cheer up – time to start working on your 2012 is the Year I Get Richer plan.

Nope, sadly this isn't a realistic way to get wealthier in 2012.

The first – and easiest – thing to do is take a look at all of your expenses, and work out how to make them cheaper – get a spending diary if you have to. Are you using everything that you pay for monthly or fortnightly – like gym memberships, Foxtel, a big internet package, multiple bank account fees, and that kind of stuff? Make a list of them, and if you’re not sure why you’re still holding onto them, get rid of it.

Next, ring your bank and see what they can do about all of the fees and charges you currently pay on your savings account, other bank accounts, and most importantly your credit cards. If you ask your bank, “I’ve worked out from my statements that I’m paying $15 a month to you guys in fees, how can you make this cheaper for me?”, in the majority of cases, they will.

Then, ring all of your service providers – car and home insurance, private health, and talk to them about better or cheaper deals. It helps – a lot –  if you do an online comparison first and let them know (very politely) that’ll you’ll go elsewhere if they can’t find you a better deal, especially if you can name the provider and how much you’ll save. I did this last year and saved heaps on my car insurance.

Got a lump of money sitting in a normal bank account? Move it to a term deposit or a high interest account. Check out who has the best rates here.

What can you sell that you don’t need? If you’re not sure, put it in a box at the back of your cupboard or garage for a few months. If you don’t get it out of the box, then you don’t need it, and you can sell it online for extra (tax free) cash.

And if you still haven’t, grab an old shoebox and mark it RECEIPTS. It is such an easy way to keep all of your receipts for tax time. If you’re not sure if it is useable, just keep it – your accountant will sort that out.

If you’ve got another tip for an easy way to get rich or save cash this year, leave it in the comments below.

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Just a note on all things Christmassy … remember you’ll end up in credit card debt by January if you’re not careful …. so note this Grinchy reminder. Got it?

And if you really get a kick out of spending, (still!!), just fantasy shop. SO much cheaper! And still fun … And this year, make it a resolution to try, try, try to NOT SPEND MONEY ON SHIT YOU DON’T NEED. If you just do that one thing, you’ll be richer.

Oh, and remember, New Years resolutions are a total crock. Just decide to be richer next year instead.

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If you’re not going to take advantage of this strong Aussie dollar by heading overseas to shop, there’s still a few ways to take advantage of our currency without even leaving your desk.  Here’s a few websites I love …

Butterflies collage, rowantreedesign shop at Etsy

www.etsy.com – most of us have visited the “handmade EBay”, but since everything on the site – even Australian stuff – is listed in Aussie dollars, now is a great time to pick up beautiful handmade jewellery, homewares, and clothing.

www.theoutnet.com is a new favourite. Their Flash Sales are really worth a look … and the best bit is the returns policy. If you return something, they’ll refund the lot, including the outbound postage you paid in the first place. Puts your mind at ease when you’re doing online shopping.

www.bhphotovideo.com is the NYC-based camera and electronic geek heaven. Go nuts.

www.20×200.com is a well-known affordable art project based in the States. Today, art there starts at $18.75 Aussie (the $20 selections on the site include artwork and original, limited edition photography) + shipping.

www.1-day.com.au OK, you’re not going to take advantage of a low US dollar here, but I couldn’t resist putting it in, after a hot tip-off from my friend Alex, who spends all day looking for the best internet bargains. On any one day, there’s three great deals on here.

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More than a decade ago now, I remember thinking my mum was SO daggy because she couldn’t believe I’d paid $90 for a pair of jeans. In 1998, when Gettin Jiggy Wit It was Number 1, I was (trying) to rock a VERY expensive pair of  … Whatever They Weres. I was very excited about them at the time. Now buggered if I can remember the brand. Huh.

Point is, now, if I saw a pair of designer jeans for $90, I’d race over to the 50% off rack (that’s the only place you’d find them), and fight 3 other size-tens for the chance to try them on. And tell all your girlfriends about your bargain. Ok, that was 13 years ago, and I get the concept of inflation. But now, just like my mum, I’m staggered at price hikes in fashion, entertainment, food and life in general in the past few years, and even more staggered that wages in Australia simply haven’t kept in step.

So we’ve got two choices – get paid more, or spend less. I reckon you should do both. But today, let’s look at getting paid more.

If you’re not going to quit your job, you need to ask your boss for a pay rise. I know, awkward.  Here’s a few tips to make it less fist-clenchingly uncomfortable for you.

* Remember that things will only be uncomfortable for a little while – hopefully only a few minutes – in front of your boss. Like doing the plank at Bootcamp, it’s short term pain, you know that uncomfortable moment is going to go away. So make like a Bandaid and do it quick.

* Talk to your boss in positive terms – don’t make it seem like a whinge. Something along the lines of “I love it here, but I want to be paid more” is going to come across a lot better than “I hate that I don’t get paid enough” when asking for a salary increase.

* Make a list of notes in case your mind goes blank in the office – or send a short, friendly email outlining your contributions to the company over the past year and why you should have a pay hike. But always try to do at least part of the negotiating in person. It’ll mean more cash for you.

* Do your research first and work out what the market is paying for similar positions.

* Tell the truth. If you haven’t been sought out by a rival company, don’t make out that you have – it’ll come back to bite you.

* And if you really don’t think your boss will give you cash, try to negotiate on the things that cost you to come to work – gym fees in the city, parking and toll passes, and other benefits.

Have you ever asked for a pay rise? Did you have any success?

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Well, yes and no. Well, no. Kind of – maybe. If you love it? Yes. Arrgh.

Buying something you really don’t need is hard when you’re saving for something like paying off debts or a house deposit or a mortgage.

But constantly denying yourself the things you love all the time is no good either … you’ll save plenty of money, but your life will be crappier as a result. I reckon there’s a few basic questions you should ask yourself before buying TYJDN (Things You Just Don’t Need), and this’ll help you make your decision.

* Is the thing a one-off? — That’s important for buying a piece of art, as opposed to (another) new pair of jeans

* Have you shopped around and made sure this thing is at a comparable price to other similar things? — That’s important for things like jewellery or electronics where the price for TYJDNs can differ hugely from brand to brand.

* What would happen if you didn’t buy it? — Since it’s a TYJDN, probably not much, but if it’s something like an extra activity while you’re on a holiday, what will happen is that you’d likely never be able to do that again. If that eats you up inside, buy it. If the thought of never doing it isn’t devastating, don’t buy it.

* Is there a reason you want it so much? — Does it go with your house, is it an incredibly unique colour, is there a particular reason you fell in love with the TYJDN? The reason would want to be a pretty good one.

* Are you able to go away, think about it, and come back? — Sometimes the desire to buy that kind of stuff (particularly clothes and handbags) passes if you decide to think about it and come back. If you find you haven’t been thinking about it constantly for the rest of the day after you first spied it, you don’t want it that much. Walk away. If it’s burning a hole in your heart, like really burning a hole in your heart, go back.

* Is it similar to something you already own? — If it is, walk. Away.

* Are you buying a TYJDN to cheer you up? — If you are, ring up a girlfriend and go for a glass of wine instead. That’ll be $193 cheaper than a vintage lamp you can’t actually fit into your bedroom anyway, and works way better than retail therapy.

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For most of us, Christmas means our biggest spending time of the year. So for most of us, that also means an eye-watering credit card bill sometime around the end of January.

Together, we Aussies have 16 million credit cards. Kind of weird and scary, since there are only 22.4 million of us all up, and surely there’s plenty of kids in that 22.4 million who don’t have credit cards yet. The average Aussie owes $3, 140 (or thereabouts) on credit and charge cards. Over three grand?! That means you’re paying some serious interest every month. And not even interest on anything good, like your future house. Just that awful compounding interest on credit card purchases of crappy stuff you’ve long since forgotten. So how to avoid it?

Get tough on your credit card this Christmas. Eek!

First, get rid of your charge cards – those quasi credit cards like department store cards. Those things can really get you into trouble. Secondly, find out what interest rate you are paying on each credit card (usually you can find this by flipping over the front page of your credit card statement. If it isn’t there, call your bank and ask them). While you’re there, ask your bank if there is anything they can do to make Christmas easier for you – lower interest rate, longer number of days interest free, anything like that.

Only use the credit card with the lowest interest rate, and seriously, don’t use it unless you have to – or you’ll hate yourself come January. Get rid of the second, third, or fourth credit card you have – just cut it up (and remember to call your bank to tell them you’ve cut it up, so you can stop paying fees on it).

Make a list of all your current credit card and other debt – and total it up, even if you don’t want to – and remember that with everything you buy in December, you’re adding to that debt, and this means yet more compounding interest for you come January. If you can, put a lump of cash onto your credit card — think of how good you’ll feel in the New Year when the bill is a little less hairy than you feared.

And finally, don’t get too carried away with internet shopping where you have to use your card – set the same budget you would do at the ‘real’ shops. Or if you can’t manage that, force yourself into a budget by only putting a set sum into your PayPal account, and only paying for internet purchases via PayPal. Good luck …

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Cute bikini at polyvore.com

I was in a store yesterday already selling bikinis. Bikinis?! Really?! Like Cadbury Creme Eggs spotted in January, and Christmas decorations popping up in September, I swore it was way too early for summer fashion. But no, turns out, summer stock has been in the shops for a little while now, and winter is officially over in a little over a week.

Great! Time to race out and buy stuff, right? Summer sandals, short dresses, singlet tops? I catch myself getting a little giddy and overspending on the summer wardrobe every year, only to find that, strangely, I have almost exactly the same top in my wardrobe from last year. So do a bit of thinking before the excitement of the warmer seasons sees you overspending. Get out your summer wardrobe, take a good look at it, remember what you actually bought last year that’s still in fashion, and do a quick audit of your clothes and shoes. What do you actually need?

I need new sandals, a summer dress with sleeves, and a pair of shorts that can be dressed up a little more than what I’ve got right now. I feel much better about going back into the shops now. And I already have 2 this-season bikinis thanks to trips to the States this year, so there’s going to be no panic-spending from me. See, now that I’ve told you guys, I can’t.

What do you guys need for summer? And more importantly, what don’t you need? A little pre-planning before the shops right now will see you stay inside your budget this year. Good luck.

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OK gals, here’s a little more Good Debt, Bad Debt fun. A guy at work is getting married. He doesn’t want to go further into credit card debt for his wedding (yes, so far so good), but he knows he won’t be able to afford it all (bugger). So, he wants to get a personal loan. This is a better option than getting a credit card bill for sure, and it isn’t like he can avoid this spending – he’s getting married and has already committed to the cost.

Now, here’s his major mistake: even though he thinks he’ll need about $8900 according to his budget, he thought he should borrow $10 000, just to kind of round it out, and just in case anything popped up spending wise. Um, no. Right now, interest rates for personal loans are much higher than for mortgages – they’re sitting at about 14 – 16%. Agreed, it is better than the ridiculous interest on credit cards, but not by that much. So there’s no need for him to borrow a cent more than he needs according to his budget – because he’ll be paying that off, with interest, and it isn’t absolutely essential.

If you really have to get a personal loan for whatever reason – not as crap as having credit card debt, but definitely close – don’t borrow any more than you absolutely have to, have a plan to pay it off on time, and find a loan that will let you pay it off early in case you get a pay rise or a decent tax return. Find out what extra fees you’re paying – these loans have establishment fees, and may penalise you for paying out the loan early too. And think pretty hard about a personal loan for pretty much anything. Buying furniture, electronics or anything that loses value quickly using borrowed money is particularly dumb. A better plan for the money you actually have is always way, way better.

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I’ve been travelling overseas a lot lately, and everywhere I go, there’s another Aussie making a rookie error when it comes to exchanging money that is costing them valuable holiday cash.

Here’s what I reckon you need to know about your money before you go that’ll free up some more holiday spending money.

- If you plan to exchange a decent amount of cash before you go overseas, shop around for the best rate of exchange online, and pick a day when the dollar’s relatively good to exchange your money. Take as much time as you possibly can, and don’t get stuck having to use the airport’s exchange bureau … their rates are always crap, because they’ve got a captive market. When exchanging cash, exchange as much as you feel comfortable travelling with – you don’t want to pay two lots of exchange fees to exchange twice or three times in as many days.

- Find out what fees you’ll be charged for using your debit and credit cards overseas. Remember that these fees are per transaction, so it might not be the best option to put a $US8 cab ride on your Visa. If you only get charged, say, $4 for a foreign ATM, consider that as a strategy for your foreign exchange (at your destination) if you only want a small amount of cash.

- Never (ever) exchange money at your hotel. Their rates are terrible.

- Travellers Cheques are a bit old school these days … you should consider a prepaid Visa or Mastercard if you’re worried about taking cash with you. Your bank will sort you out with that, do some Googling. Check you can use it first at your destination, especially if you’re going somewhere weird and wonderful. You can only spend what you load onto the card, and this can often be the cheapest option for a short holiday to, say, the UK or US.

- Don’t neglect your bank account at home – remember you’ll be getting direct debits and fees taken out of your bank, so don’t leave it too empty.

- If you want to buy duty free on the plane while on holidays, always elect to pay in the currency you’re travelling in (as in, pounds if you are on British Airways or Aussie dollars if you’re on Qantas), because the airlines all have their own (woeful) daily exchange rate if you elect to pay in a different currency.

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Worried about a house deposit? Don't look through all your bills at the one time.

We’ve heard so much lately about property prices being so on fire right now – great news if you already own a place, a nightmare if you’re trying to crack into a market that’s so hot right now it’ll burn you if you try to get a hand on it. Anybody see that derelict house at auction yesterday in inner city Sydney fetch more than $800K? Really?! Give me a break.

And the biggest problem right off the top in an expensive market for a first home buyer is not rising interest rates – although that’s got the potential to be really tough down the line – but scraping together enough of a deposit to satisfy the lender. Enough to get over the magic loan-to-value ratio. Enough to keep the mortgage insurance monster at bay. (Never pay mortgage insurance by the way, ever. It doesn’t actually insure you, it just sucks).

Seriously, saving the kind of cash you need to put a decent whack down on your first place is a big ask. If you’re an average earner, saving 10% of your net income each and every week, it’d take you more than 3 years to squirrel away enough to money for a deposit. And it’s kind of tough to hear that your friends got their deposit from a very generous mum, dad, or grandparent, when you’re still sweating away week-to-week.

Getting a chunk of money together without spending it is hard. Real hard. It doesn’t matter if you’re saving for a car, a holiday, or a house, putting away a decent sum each payday, deciding where it’ll earn the best interest, and then not touching it when you want to buy something fun instead (read: shoes) is sometimes just too much of a test of our spending willpower.

So, is a deposit even do-able? Or should we make like the Parisians and Manhattanites and merrily throw our home ownership dreams to the wind, renting forever because even with the Government’s assistance, the deposit’s still so out of reach?

Nope. That’s not Aussie. We want to own a place. We kind of like the savings struggle, then the regular mortgage repayment that makes us believe we’re not ‘throwing away’ our ‘dead’ rent money. We even like to moan about it with our friends.

Mortgage Moaning isn’t new. But Deposit Desperation is a sure sign that the sheer size of the deposit that’s now needed is getting further and further out of the reach of us Normals. And that means saving more every pay, for longer, to reach that elusive target. In a rising interest rates medium term future. I know, gloomy. Sorry about that.

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