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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This blog I wrote appears on Ninemsn Money’s website. Check it out and comment online - people are getting fired up about this one!

Young women can spend a fortune on cosmetics, clothes and treatements all to project the illusion of success. But how much is too much?

I was at a Thai restaurant with some girlfriends on Saturday night when we started talking about getting our hair permanently straightened. My friend Kate had just had it done in the city, at a “bargain” of a place … for 300 bucks.

Kate’s started getting her manicure and pedicure there too, because they do it a little cheaper than her ordinary beautician – although she still confesses to a mani-pedi habit that costs her around $800 a year. She gets a spray tan once a month or so for special occasions like the races or a wedding for $40, gets her legs waxed and her eyebrows shaped, her hair highlighted, wears nice jewellery, gorgeous perfume, looks after her skin, has a typical girl’s makeup stash, has a couple of good handbags, and is eyeing off a pair of boots for winter – and wondering if she can afford them at just under $300.

Thing is, Kate’s not an unusual for a city girl, and she’s certainly not overly primped and preened. She likes the latest fashions but she doesn’t wear designer head-to-toe. She’s never had botox or an expensive spa treatment like most of the girls we know, and she gets the bus to work.

Kate and I gave up somewhere around the green curry working out how much she spends each year on looking pretty much the same as every other woman working in her office, at a law firm in the CBD. Kate joked that every time she gets a pay rise, there’s another new piece of essential ‘upkeep’ that’s conspiring to keep her broke, and a long way from putting a deposit down on a unit – something she’s been trying to save for since she graduated six years ago.

Thing is, I think Kate’s drama is a common one. We’re now expected to spend so much looking good, that we almost have to work to keep up the illusion that we’re successful. Because now, success has a ‘look’. And it’s an expensive one.

Now I know what some of you are thinking. Just give up on all the expensive trendy beauty and fashion trappings, girls, and save the spoils? You’re just copying Hollywood, Kate, surely professional city girls here don’t have to spend a small fortune to simply keep up appearances? You might be half right, but the awful truth is that there’s an enormous amount of money per year that goes into keeping women looking good enough for them to feel confident and secure in their workplace. I’m not saying it’s right. I’m just saying that it has never been more expensive to be a professional woman in this town.

It’s no wonder men are more likely to own property younger. And die with more money. They’re not dropping $150 every time they see their hairdresser.

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We ALL love a freebie, right?! It doesn’t seem to matter how old or wealthy we are … anything for free’s a bonus. I read with glee this article about getting a free airline upgrade, and it has led me trawling all over the ‘net to see what other tips I could source about getting stuff for free, or at a discount. Here’s what I found;

More guff on getting an upgrade … this article’s full of practical advice.

I like this one … Ten Ways to Get a Better Hotel Room Free.

Lasttix.com.au is the Aussie place to go for discount last minute show tickets.

And for the tightarse I know lives in all of you, check out whypayfullprice.com.au - discount vouchers a go-go.

One of my favourite travel websites, www.mrjetsetter.com, has  all kinds of good travel money saving tips. And you can add your own too.

Here’s an article I wrote on Using Frequent Flyer Points to buy Funner Stuff than Air Travel.

Freecycle rocks. Did you know there’s a big Freecycle group in Australia? Good for the environment, plus you get Free Stuff.

This list of 30 Websites Offering Cheap Air Tickets is cool. Not all available for Oz Travel, but plenty are international.

If you think a shop is too upmarket to ask for a discount, The Guardian says Think Again.  Are you ever game enough to ask for a discount in a posh shop?!

Oh, and I love DealsDirect, Pharmacy Online, and it is always worth checking Catch of the Day (a clever website with one super-cheap item every 24 hours).

Now, what are your fave money saving sites and tips? And has anyone ever managed to wrangle an upgrade by sweet talking? Let us know below.

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Righto, this ISN’T one of those dumb personal finance columns that starts with having one less coffee a day and how rich it’ll make you in 99 years time. Those

Image via msmoney.com.au

make me want to go out and buy an extra large latte just to spite whoever the stupid columnist is that’s actually suggesting something like that.

But sometimes, I think we have to sit back for awhile and actually work out what we do in day with our cash. Do you buy turkish toast + coffee at work, go eat a nice takeaway for lunch, eat out for dinner, then raid the corner store each evening for snacks? Do you catch cabs when you can’t be bothered getting the bus twice a week, buy 3 cocktails at eighteen bucks apiece on weekends, pay for an expensive gym you hardly ever use, and shop at the expensive local deli instead of a local supermarket? See, that kind of lifestyle is totally fine if you’re earning a massive income, but how many of us are?!

Have a think about where and when you spend all your money. If you’re having trouble keeping track of where the $200 went you got out of the ATM three days ago, chances are you’re buying takeaway food, using an expensive means of travel and just generally living way above your means.

Think carefully each time you shell out the cash, and pretty soon you’ll find yourself more aware of where and when that cash is disappearing. Or you could consider keeping a money diary if you really can’t fathom where you lost your fortune.

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Steve with some rental stuff ... I wonder if I'd know how to use a chainsaw?

I recently posted a blog about Rentoid.com, the “EBay for renters”. Pretty much every comment I received was about “that guy’s idea”. So, meet Steve Sammartino, the brains behind Rentoid. I ask him about the “big” idea, and some advice for entrepreneurs, or wannabeentrepreneurs.

Jo: So many people I know say they just want ‘their big idea’ to come along so they can start making money for themselves. Not just on the web – they talk about Richard Branson as much as ‘that college guy that created facebook and it’s now worth billions of bucks’. Where did your big idea for Rentoid come from, and did you act on the ‘aha moment’ right away?

The big idea did come straight away. But it turned out the big idea isn’t worth nearly as much as we think it is. It has been a few years of hard work to get the idea to market. Getting ideas to market is what matters. The idea itself is almost worthless. In order to explain this in more detail I’ll describe what I call getting to market. it involves conceiving the idea, designing the product, financing it, pulling together a project team, building it, promoting it and tweaking it. Then we need to constantly refine and iterate the project. Rinse and repeat. This is where the value is created for all ideas. In truth the Facebook example is a rarity, which is why we all know about it. Most successful “ideas” involve years of implementation. For the record, the idea for www.rentoid.com came from a business maxim which states every business has an equal and opposite business. I decided to build a website for the opposite of trading goods – holding goods = renting = therefore rentoid.

Jo: Give us a bit of insight into the blood sweat n tears of a startup business. What did you do right, and where did you stuff up? Any words of advice for other starters, on the net or otherwise?

Pretty much the business model is very different to what I thought it would be. I didn’t make much money at all in the first year. The 2 most important thigns I did right were: 1. Ignored my skill deficiencies and forged ahead anyway, learned on the job and: 2. I kept my costs low. If we keep our costs low it invents time to get the model right. The first point is our job as entrepreneurs is organising the factors of production, not being them. Proof of this is that I’m not a techie guy who runs and owns a techie based business. Our jon is to be great project managers and promoters of what we do. Point number 2 helps us realise point number 1.

Jo: How long did it take you for your dream to become reality – many people lose hope of their big moneymaking idea when they realise it’ll be 5 years before they can turn a profit.

I tell people if you want to be rich, don’t be an entrepreneur. The odds are against you. It’s easy to be rich earning a normal income and investing in shares and property. Entrepreneurship is about the thrill of the journey, not the money. If the money comes, then thats great, but it should be why we do it. It needs to be because we want to have a crack, to see if we can. To not die wondering. For the freedom and fun.

Jo: What are your thoughts on the current explosion of entrepreneurship? Can it last?

I think it is part of the human spirit, but in the post internet era a few people see it as a kind of rock star thing, (like the Facbook & Google stories) which it isn’t. Most people find out how hard it is and lose interst. The cool thing is the barriers to entry are so much lower now with the internet, so it least we can all have a go.

Jo: Do you invest all of your money back into Rentoid? If not, where do you invest?

I invest most of Rentoid’s profit back into it. But in terms of personal finance I invest in Index share funds – ASX top 300 and S&P 500, and the residential property market.

Jo: Any words to bolster bravey in those 9 to 5ers reading this who have a ripper business or investment idea but aren’t game enough?

Start straight away. The right time is never going to happen. There’ll always be a reason why the timing is wrong. But start part time – do nights and weekends. If you can’t handle this, then it wont work. The nights and weekends are a test of your tenacity. That’s the most important skill is the desire and willingness to keep going when it gets hard. But it removes the financial pressure which is good. The other thing I’d say is it’s not about being the smartest person on the block. It rarely is. It is about being the person who doesn’t quit. It’s not intellectually challenging, rather a test of will… Which means you can do it if you want to. It’s possible.

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If you believe the latest reports, our already recovering Australian economy is on the way towards another boom, in about 2012 or 2013. Sounds boring, but start thinking selfishly when it comes to the broader Aussie economy: you have to ask yourself what this’ll mean for you and your life, and better yet, how you can benefit.

Will house prices go up? Yep. They’re set to go up quite a lot – in double digits actually in some of the major cities this year. Will my rent go up? Oh yeah. Rent in any boom cycle will always go through the roof – especially for city dwellers. Will interest rates go up – and what does this mean if I am saving for a house or trying to buy one right now, or trying to pay off a mortgage? Hmm, yes they will, and it means a lot for you if you are ‘interest rate sensitive’ right now. The best thing to do here would be to go see an accountant or financial planner – not the mortgage broker who is trying to sell you the loan – and work out what you can afford.

But strangely, most people think about economic booms or housing booms in terms of the ways it might negatively impact on their lives, and not in the ways that they might benefit from the boom too. To get ready for another boom, you have to think to yourself, “Right, house prices are going to be a lot more expensive by 2012 or 13. Interest rates will go up. More people will be buying, more people will be constructing, so how can I ride that wave to profit out of all of this?” After all, so many other buggers are profiting, why not you too?

If you’re enjoying my posts, sign up to my free weekly email. Here’s my disclaimer about the info you read on my site. Read it, then go get yourself a good accountant and/or financial adviser, ok? I swear to you, it gives you the kind of power over money you always wish you had – even if you haven’t got any money (yet).

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Um, when did discount shopping just get so crap? I remember the days when I used to meet my girlfriends in the city, we’d get lunch or some yum cha, then go check out all of the factory outlets and discount stores. On the weekend, we decided to take a look at the factory outlets at a well-known city shopping centre and couldn’t believe the piles and piles of totally unsaleable crap in the stores. Worse, not only was there serious crap there, but it wasn’t even as heavily discounted as I remember. I had to ask – what has happened to the days of factory outlet shopping? Isn’t it supposed to be much better than this?

I guess you get to an age – I just didn’t realise I was there – where buying nothing is better than buying an ill-fitting poorly cut unflattering top you know you’ll only ever wear once. Thinking back (and shuddering a little) at some of my absolute worst factory outlet Purchases-o-Crap, I wish I had come to this realisation this sooner, or that perhaps someone a little older and a little more stylish than me had tapped me on the shoulder and said, “It doesn’t matter if you come away form an hour of shopping empty handed. What matters is that you avoided buying awful stuff you won’t ever wear, don’t need, or won’t look good in”. So, consider this your tap on the shoulder. If you go to the discount stores, factory outlets, and sales, and there’s nothing there you truly like, don’t buy absolute crap to justify your trip there and make yourself feel satisfied that you’re carrying a shopping bag. Instead give yourself a pat on the back that you avoided the dreaded FOB (Factory Outlet Blindness) and didn’t come home with a pair of jeggings to satisfy the shopper cravings.

How about you guys – would you rather save your money than get something you don’t love at the outlets? Are factory outlets as good as they used to be?

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Here are my recent video posts – on being afraid of debt and on treating your tax return like a part time job.

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Hmm, she thinks, what could I sell around here?!

Thanks to the smarty pants that mentioned I haven’t updated you guys for awhile on how my EBay Challenge is going. Allright, allright, I’ll do it now.

For those who don’t know, in an earlier post I challenged myself to raise $1781 to buy a plane ticket to New York City by simply selling unwanted household goods, after reading the average person had $1800 in surplus ’stuff’ in their home they could easily sell online or at a garage sale.

Well, the EBay selling was going OK … but then I was locked out of my PayPal account – therefore banning me from selling any items – because I didn’t realise the credit card I’d used to set up my PayPal account years ago had since expired. PayPal has one of those overseas call centres, and it literally took me days and days – and a fax of my passport to prove who I was! – to get my account reinstated. After that, I sold my third batch of EBay stuff quite well – my total for my latest round of selling was $174 in profit, which means I have $1588 left to go – but I’m not sure the EBay route is worth it for me.

I’m going to try selling “in real life” next – maybe fulfilling my dream to become a headscarf-wearing market stall lady (always one of the things I wanted to be when I grew up). Any ideas? Market stalls, garage sales, consignment shops? What works best for you?

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Gosh, what would we do without such life-changing gadgets?! Be rich.

As a business and financial reporter, I often go to the homes or offices of mega-rich types, you know, CEOs and successful entrepreneurs and the like, to do interviews. And one thing without fail always gets me in those places: very few wealthy people have a lot of ’stuff’. And by ’stuff’ I don’t mean private islands, indoor private cinemas and 9-car garages (yes, I have seen all of those things),  I mean crap. You know, decorative or otherwise potentially useless stuff – or stuff that is only used very occasionally, because it has such a specific function. Unfortunately, there is a mega-industry out there for Essentially Useless Stuff. It is particularly prevalent in those homewaresy shops. Cutting board that folds up, anyone?! Egg rings with little handles attached? Thin tray just for displaying olives when entertaining? Pre-mortgage, I used to actually buy this stuff. I used to actually spend my own money on thin ceramic trays in which to display olives – a treat rarely served at our place anyway – to my friends and rellies who might drop over. Who are we kidding?

Make a pact with yourself that 2010 is the year you stop buying crap. You know, little holders that hold your handbag onto the table, avocado slicers, grapefruit juicers. Tomato storers, fold-out muffin drying racks, mini Horoscope books. Tissue box covers, remote control holders, oversize silicone olive oil funnels. Crap, crap, crap. All things that would not change your life in the slightest if you just never bought them in the first place. So don’t. Put the money somewhere good instead – like straight onto your debts – and feel better. And less cluttered.

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Happy Hump Day. And since midweek always spells drastically low motivation at work, why not get your finances in order on the company dime? That’s right, take a little time off the boss and make your wages work for you. Guilty? Don’t be. Not until they give you that payrise.

The Financial At-Work Checklist

- First, pull up this link to the most boring website ever so you look productive just in case the boss happens to be walking by.

- Go to all of your bank accounts you can access online and check what interest rate you’re getting on them.

- Move any spare cash whatsoever into the highest interest earning account. Leave as little as you possibly can in the low interest earning account.

- Investigate a few term deposit options online. Arrange to put a portion of your money into a term deposit if you’re interested in a very low-risk strategy for your cash.

- Always wanted to have a look around the stockmarket but don’t want to actually spend your own money? Until you’re confident enough, simulate your stockbroker moments using fake cash with this online trading game, while still learning about the highs and lows of the  Aussie stockmarket.

- Was that fun? Then start learning about investing your own money on the ASX.

- Got that excellent accountant yet? If not, take some time to email a few trusted colleagues or mentors for a good recommendation that specialises in your industry.

- And what about booking a trip to see a financial adviser or planner? They’ll be able to tell you whether you should buy that investment apartment or put more money into your super.

- In desperate trouble with the plastic? Look up the free debt counsellors in your area.

- Find out what sort of annual fees you’re being charged on your credit card, and ring your provider to see if they’ll lower or get rid of those fees for you in return for your ongoing custom. We tried that and it worked with both interest rates AND fees … wonder how you’ll go?

- Sort out your super. I know, this is one that you can put off and put off, but it beats Facebook stalking in that it will eventually mean a bit of cash for you. And even better, very small amounts of super can be cashed out. SuperSeeker online is dead easy, you literally just need your name, tax file number, and date of birth. You can also do it over the phone.

And once you’re done, sit back and give yourself a pat on the back, then sneak out to lunch.

Don’t forget the FrenchNavy competition – leave a comment on the blog below to win beautiful stationery sets. And if you’re enjoying my blogs, don’t forget to sign up for my free weekly email. Or just follow me on Twitter if that’s easier.

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