“They say the best in life is free,

But if you don’t pay then you don’t eat.” – Another Day, Bryan Adams

One of the best things in life are memories. Growing up listening to Bryan Adams was something I look back on and remember enjoying (well, at least up to Waking Up The Neighbours, then I reckon he kinda went backwards). Memories cost nothing. As a matter of fact, a lot of things don’t have a cost associated with them.

Depending on your circumstances, you won’t pay a cent for love, sex, oxygen, warmth, laughter and cuddles. Yeah, there are situations where you can pay for all of those, but generally speaking they are all free.

If you get the feeling that this blog is going to turn into an advertisement for Visa, you’ve got the wrong end of the stick.

It might be a bit cocky to refer to Financial Freedom For Gens X And Y as one of the best things in life, but bugger it, I’m gonna be cocky. ‘Cause now it’s free. Yep, that’s right, the $25 subscription fee that we used to charge for a sign up to access the course on our site has been dropped. There is no need to even send us your email address so that we can send chapters to your inbox every week ‘cause it doesn’t work like that – the whole course is now available and open to all.

Unlike other places where you can find information on money, Financial Freedom For Gens X and Y does not carry advertising. Nor does it attempt to persuade you to sign up to something for an annual fee or a product that we receive kickbacks from. It’s fair dinkum free.

Of course if, after going through the site you reckon you have saved yourself a load of money and that it was well worth your time reading through it, you still have the option to throw 5 or 10 bucks my way. After all, running a website doesn’t come for free.

Recently a number of colleagues have entered into lease agreements for cars. Basically, leasing a car involves making monthly payments for the term of the lease. According to the paperwork that you sign before you enter into one, the payments are a combination of an amount for petrol, servicing, tyres and the lease itself. When it’s salary sacrificed, the payment comes out of your pay before tax and therefore carries some tax advantages. Because of the tax advantages, these things are easy for the lease companies to sell, and you may find that you have a colleague who tells you how good their lease has been and encourages you to get one too.

Now for the bad points. When you lease a car you don’t own it. You have the option of buying it for a pre-determined sum at the end of the lease, but if you choose not to take that up you have no transport. When you look into it you may find the arrangement includes a $300 annual fee, over a grand’s worth of insurance in case you lose your job, and an interest component connected to the lease itself. And you need to purchase the vehicle from a dealership.

Depending on your marginal tax rate (and if you can salary sacrifice the payments) these leases may work for you. However, I would always argue that you’d be better off buying a car outright after saving up the funds. Even if it means that you purchase second hand and privately (i.e. not from a dealer who will add several thousand to the price). If your mortgage is an offset account and you draw down on your savings to purchase the car, then increase your mortgage repayments by the amount you would otherwise be paying in lease payments and you will be better off. The interest rate on the mortgage would be lower than that attached to the lease, and the discipline of extra mortgage repayments would make paying your mortgage off in a short time easier.

If you are considering a lease for a vehicle, before you sign up get someone who is independent of the deal to check it out for you. See an accountant and pay them a couple of bucks before you sign up for a five year lease that would potentially see you worse off. Even if your workmate is adamant that leasing is great, unless that colleague is an accountant independent of the deal, check it out.

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On a completely separate note, our blog received a review on the website of creditcard.com.au this week. We were pleasantly surprised to learn that someone actually reads this stuff! And hey, getting a mention as a favourite blog in the same breath as David Koch’s is pretty cool. Not sure about the pants I’m portrayed wearing in the cartoon though…

Back in my younger days I had personalised number plates on my car that included the number 007 (yeah, I know, what was I thinking). Personalised plates were pretty popular in my hometown in NSW and part of the reason is because they were fairly priced. It wasn’t unheard of for a couple of people to chip in 20 bucks for an 18^th or 21^st birthday present to whack on a mate’s car.

When I moved to Canberra I wanted to keep my unique plates but, being a new resident of Canberra, was also wary that I should change my car registration from NSW to the ACT. I’d paid $120 for my number plates and reckoned it was a reasonable price to pay. But when I enquired about the cost in Canberra for the same product I was absolutely shocked to learn they would cost $1,500.

Needless to say, I’ve had the generic ACT blue and white Y series plates ever since. However, I have always been amazed at the huge quantity of ACT personalised number plates there are out there.

I needed to go to the motor registry the other day and while I was there I asked what people had to pay for personalised plates in the ACT these days. Turns out there are a range of prices, depending on what combination you decide on.

Two letters and three numbers (eg AB 123) will set you back upwards of $400. A plate consisting of any five numbers (eg 12345) sets you back $827. To let people know you support the Canberra Raiders or ACT Brumbies football teams costs up to $1,200. Three letters with three numbers (eg ABC 123) or a word of up to seven letters (eg WANKERS) will add $2,500 to your credit card bill.

But the one that nearly knocked me over was the cost of number plates with only three numbers. There are a ridiculous number of Canberrans who have paid over $6,000 for these plates. And remember, these are the costs for these plates on the primary market – the costs you pay to get them from the motor registry. Popular second hand number plates can be sold for whatever the person buying them is willing to pay. Want the number plate BKRUPT in Victoria and you’ll need a spare $100,000 (yes, these plates are currently on the market and that’s the asking price). Ironically, paying six figures for two thin pieces of metal would probably send you bankrupt.

I have often heard of gambling being referred to as a tax for stupid people, but I reckon that’s a harsh assessment for something that is an addiction for hundreds of thousands of people. Paying $6,085.30 for a three digit numerical number plate is a tax for stupid people.

When you start a conversation with someone you have not met before, chances are the question “What do you do?” will be asked. It can be a question that spurs the conversation on (“I’m an astronaut”), is met with a dazed look (“I’m an electrical engineer”) or kills the chat altogether (“I’m a public servant”).

Many people define themselves, and others, by their occupations. There is an enormous amount of social importance that’s attached to that definition. So when you find yourself in a category that’s less glamorous it can be a difficult thing to handle.

I have been jobless twice, and in both circumstances I was studying before I was out of work. As well as the obvious problems that come with a lack of income, the most difficult thing to accept was waking up in the morning knowing that, in the eyes of society, I was unemployed. Sure, you can try to give yourself the title of the odd jobs you manage to get, but the words “I’m a pamphlet deliverer” never saw me pick up a hottie in a nightclub.

Let’s face it – being a surgeon, a hotel manager, a nurse or a fireman is downright sexy. Rightly or wrongly, society gives special importance to certain jobs, particularly those that pay the higher amounts. But if you take a close look at individuals in swanky inner city offices you realise that many of them are in worse financial situations than the people who clean those offices in the wee hours of the night, or the cab drivers who take them home after their meetings. Proof that financial success is not about what you earn, but what you do with it.

I remember a primary school teacher saying to me once that teachers had the most important job of all. Without teachers there are no doctors, nurses, midwives or any medical professionals who bring us into the world. As far as paid professions go, I reckon that’s pretty accurate. But, as they say, the best things in life are free.

Or unpaid.

Twenty years ago, official documents would have categories to choose for occupations, and among them was ‘housewife’. These days the politically correct term is ‘home duties’ and most of the time it’s referring to a stay at home parent.

I’d argue that the most important job in the world is a parent. It’s parents who guide those children who go on to become teachers. And the most intense form of parenting is done by the stay at home mums and dads.

They intensively teach their kids language, social, literacy, numeracy, physical and technological skills that will mould those kids into the adults of tomorrow. And their payment is love.

So next time you are at a party and someone says they are a stay at home mum or dad, keep listening, ‘cause I guarantee they can teach you a thing or two.

Financial literacy has been part of the school curriculum for a few years and is now being taught as part of maths, science and English lessons. So kids these days are learning about money at school. In theory.

On the whole I think teachers do an amazing job. When I think back to some of the teachers I had at school I remember some people who had a wonderful ability to impart knowledge. Mr Baird was a fantastic English/history teacher, Mr Thompson was brilliant in Legal Studies and Mr Fox turned our Economics class around from a class who were going to fail to one that passed. But for all the good teachers, there were some shockers – people who shouldn’t have been passing on knowledge in their chosen field, let alone in something outside their area of expertise, like money.

In practice children learn about money every day – every school day, weekend, public holiday and right throughout the school holidays. They learn about money when they see mum get out cash from the grocery checkout, when dad pays for the takeaway with a credit card, when they see the daily coffee bought on the way to school or soccer, and when their parents argue about how the next big bill will be paid. Chances are, kids learn the same way that their parents learnt – from their family.

This means it’s up to the family – to mums and dads, aunts, uncles and grandparents to ensure the next generation is financially savvy. Of course, this means that those passing on the knowledge need to pass on the right information in the first place. They need to get the message across that money doesn’t come from the supermarket, but from work. Children must understand that when dinner is bought with a plastic card that there is an underlying exchange of money and often that means the purchaser is buying on credit. Kids learn by seeing their parents giving up buying the daily coffee for making one and putting the daily savings into a glass jar. And when parents argue about money without resolving it in front of the kids, their children get a negative message about finances.

It’s a bloody tough gig being a parent, partly because finding a resource that shows you how to sort your own finances out and how to pass that knowledge on to your children are very hard to find. Finding this resource that’s engaging, interactive, accessible, up to date, relevant for Australians, funny and interesting has been virtually impossible. Until now.

Kids And Money is a new chapter in Financial Freedom For Gens X and Y that covers everything you need to know about the topic. From what to expect before you fall pregnant, through to the best investments for children, how kids are affected by tax, available government assistance for parents and paying teenagers pocket money, Kids And Money is the new resource that parents need and it’s being launched today. With all the research I have done, I have found no resources that covered all these areas.

To celebrate the launch we are discounting our normal price of $24.95 to just $10 until the end of September. For less than the price of three takeaway coffees you can sort out your finances and learn how to teach your children the money message they will need for life. Visit our Facebook page for the discount code.

A quick check of my emails shows that I am an extremely lucky man. According to my junk email folder, dating back to November last year I have won the lottery three times for a total of about $11,530,000 (seven million Euros + $US 2.5 million), and received over $22.4M from estates of people I never even knew. So the grand total of my windfalls, which I am yet to claim, comes to over $33.9M and two Toshiba laptops (don’t these people know I’m a Mac man?). And that doesn’t include another 400,000 Euros I won via text message. I’m a lucky man indeed!

According to the Australian Competition and Consumer Commission (ACCC), Australians lost $85.6M in scams in 2011 (yeah, it appears none of the lotteries, which I didn’t enter, were actually real). What I find really shocking about these schemes and the ACCC figures is that not only are there intelligent, hardworking Aussies who fall for them, but that the rate we blindly reply to these emails with all our personal data is increasing. Given the high level of embarrassment felt by the victims, the true figures are likely higher than the ACCC numbers. Boy, there sure are some rich Nigerians out there!

In investing there is a simple saying that holds true not just of investing but everything to do with money – if it sounds too good to be true, it probably is. If you receive an unsolicited email, treat it with caution. If the email mentions money, treat it with very high suspicion, and if it asks you to send your name, address, bank account numbers, date of birth, occupation, tax file number or an amount of money required to release much larger funds for you to receive, delete it immediately.

That there are so many sharks circling on the internet, you could consider yourself a lottery winner if you avoid getting bitten. In fact, I feel like I have won the lottery.

I’m a middle class white male, speak fluent English and have never fled a war torn country. I received a good education and live in a developed country whose economy is the envy of the rest of the earth’s 7 billion people. I am in good health and if that changes I can call an ambulance and receive some of the best healthcare available at the hospital just down the road. As a matter of fact I have been visiting that hospital a bit recently.

When our healthy baby girl was born last year I felt like I had won the lottery. I was so happy I bawled my eyes out for the best part of three days as I rang family to tell them “I’m a dad!” It is a feeling that just can’t be matched. Until, that is, it happens again.

Claudia has just given birth to a healthy baby girl.

I truly have won the lottery again.

I had the opportunity this week to hear the very sad story of a widow who was exploited by people she trusted. Just after her husband died she made the decision to leave Victoria where she had lived her whole life and move north. Leaving behind painful memories of a happy life was a big and difficult decision, and the last thing someone in that situation expects is be to be screwed over by their bank.

This lady was classified as asset rich cash poor – she owned property worth a significant sum but had no income, not even a pension. The family finances were always something that her late husband had organised. After all, she is from the generation who would quite naturally see money matters as being the man’s responsibility.

When she came to purchase a new home her troubles began. Among the loan documents, written up by her bank, were figures showing that her income was around the $80,000 mark. It turns out that her signature had been photocopied from one part of the documentation and pasted into a number of other parts of the forged papers. The first that the widow herself knew of this was when she obtained copies of the paperwork from the Financial Ombudsman Service.

This story of fraud involving mortgage brokers and bank staff (including managers) is now part of a parliamentary inquiry where hundreds of ordinary Aussies have fallen victim. On the surface it would appear that the fraud was a result of bankers putting large commissions and threats over losing their jobs before the lives of the people sitting across the desk seeking loans. It would also appear that the targets by the financial institutions were not random.

In her story, the widow described herself before all this took place as being financially illiterate. She has since found herself being forced to learn quite a bit about money.

Moments after hearing her harrowing story I had the opportunity to ask a number of other people who had experienced similar situations with their lenders what their level of financial literacy was before they were defrauded.

I asked them, on a scale of 1 to 10, one being very low and ten being very high, what they considered their financial literacy to be as they walked into the first interview where the trouble started.

All of them had the same answer – zero.

Where would you score your level of financial literacy?

I will admit it – I’m not really very good at dressing myself (by that I mean matching my outfit, not the actual act of putting clothes on, I’m not some serial nudist). I have a few clothes that I bought as a set and I know that some jeans go with some shirts, but if left to my own devices I will inevitably be told “You can’t wear that jumper!” before my wife Claudia lets me leave the house. It doesn’t really matter if I don’t look like a rock star, ‘cause Claudia doesn’t need to be proud of me when we go to the shops. However, how our daughter looks is another thing altogether.

Almost all of the clothes that we have for our little chicken were not purchased in sets. We were given quite a few and we bought three bagfuls of clothing second hand from a woman who was getting rid of her daughter’s baby clothes. The bags were $15 each and lasted the best part of chicken’s first year. There was a great variety of stuff in there and none of it was dodgy. The only problem was that it wasn’t numbered.

All of the clothing had the sizes clearly marked but it didn’t have a numbering system to help me. You know, an easy to read, easy to understand, foolproof way of making sure that our daughter could be clothed with bodysuit number 1, top number 1 and pants number 1.

Yeah, I know, Pumpkin Patch doesn’t follow Nick’s Numbering System either (although, given the cost of their clothes, they bloodywell should!) but it is a bit more obvious when you purchase everything as a set that it all matches. Even to a man.

When it comes to dressing our chicken I will always fall back on my disability as the reason for not getting it right. I was born with a genetic abnormality which means I can’t properly match clothing, and no, I’m not talking about my Y gene.

You see, I’m colourblind. Not completely colourblind, not like black and white and shades of grey colourblind, but I confuse some colours. For years I thought my old jacket (which Claudia eventually forbid me to wear outside the house unless we were escaping a fire in winter) was bottle green and that Claudia was lying about its shade. Then one day at work I looked at two colleagues wearing green and, referring to my jacket, said “Hey, we’re in the green club!” To which one of them replied “Well we are, but you’re wearing grey.”

So until we start regularly shopping at an expensive children’s clothing store (which, let’s face it, ain’t gonna happen anytime soon) Claudia will have to be content with placing out the clothing I am to dress chicken in the night before.

Or maybe my wife could just accept that even if our daughter’s clothing doesn’t all match itself perfectly, at least it will be pretty obvious that the guy who is dressed just as mismatched walking next to our little chicken is her proud, daggy dad.

It’s new financial year’s eve and there are plenty of reasons to pop the champagne at midnight. A bunch of changes that take place as of tomorrow means good news for consumers.

Anyone who holds a credit card or who applies to get a new one will be better protected by changes to credit laws. For holders of existing cards, credit card providers will no longer be able to send you offers to automatically increase your credit card limit (unless you have already given them the thumbs up to send them to you). You will start to see changes to your monthly statements too, including information to show how long it would take to pay off your balance if you only make the minimum payment (I guarantee this will shock the hell out of you), and for holders of cards with an interest free period, info explaining how your interest free period works.

People applying for a new credit card have the added protection of choosing their credit limit rather than just having to accept the one the lender sets. Fees for going over this limit will be banned on new cards and they’ll now have to tell you when you have hit your limit. And if you have a balance attracting different interest rates (highest rate for cash withdrawals, lower rate for purchases and possibly a zero rate for balance transfers) the new laws will mean that your repayments will go towards paying off the highest interest rate components first. Makes total sense for consumers but I reckon the banks will either be spewing about these changes or will just claw back lost profits through other means.

If your bank tries to screw you too much, you can now switch transaction accounts to another provider by filling out a single form. It’s now up to the financial institutions to swap over all those direct credit and direct debits you have set up, rather than the onus being on individuals to ensure it’s all sorted to avoid problems with bills and wages not being paid.

There are laws starting in the new financial year to tighten up the financial planning industry, although they come with a crazy 12 month period where planners can continue to ride the gravy train of commissions on investments they recommend to new clients. If you are looking for advice, the first question to ask a planner is “Have you implemented the new laws?” If they balk on that one, take your business elsewhere.

Tax rates change tomorrow to see a tripling of the tax free threshold from $6,000 to $18,200 – a big win for low income earners. The 30% tax rate goes up to 32.5%, but the tax free threshold rising so much means people in this bracket will actually be better off. And, of course, the much debated carbon tax starts. I reckon there will be less impact from this than there was from the GST when it was introduced 12 years ago. Time will tell.

So lots to think about as you do the countdown and sing Auld Lang Syne. Or not.

I’m bloody annoyed. I have just spent 48 minutes on the phone and I know that people are going to be ripped off. I hate when people get ripped off.

Yesterday a good mate forwarded me a text message he’d received from an old acquaintance. It was for a “tele workshop” which is where invited people ring a number and listen to, well, basically a lecture. It’s kind of like a webinar over the phone.

In the text message were the words ‘Five Steps To Financial Freedom’, so naturally I was interested to know what it was all about. The truth is I am always on the lookout for good quality information that can help people in generations X and Y with their finances. When I find something good I include it in my website. When I find something sub-standard I ignore it, and when I find a con job I get angry.

Thirty minutes into the phone call (and not a word about how to actually do a few things like save money, avoid debt or what to look for in investments) and it was time for questions. The first person who pressed *2 on their phone so they could be heard by the tele workshop presenter was asked “Do you have a question, or would you like me to have a look at your beliefs?” “Beliefs, definitely beliefs please” came the reply. Pause. “Let me have a look.” Pause. “Well, a bit of the belief that’s come in – money goes out as fast as it comes in, sort of what you’re experiencing at the moment. Would you say that’s the case?”

“Hang on,” I thought, “has the person presenting this tele workshop got access to a whole heap of info about those listening that I don’t know about?” The next person who came on the line also had a “belief”. The same thing happened again and I realised that the person running the show was making this crap up. Ok, now is probably the right time to inform you that I do not read my daily horoscope. I do not believe that someone on the other end of the phone who knows nothing about you other than your first name can tell you anything about your financial state, be it mental or numerical.

Unfortunately it was apparent that the other people taking part in this phone call were not as cynical as I am. And here’s the ultimate hook. Mentioned briefly in this workshop was the opportunity to sign up to a 9 week course, consisting of 9 x 1 hour tele workshops and a 15 minute one on one session with an expert. I had to go to the website to find the cost – $1,275.

Anyone trying to sign you up for a finance course that costs more than a couple of hundred dollars should be dealt with very warily. Any price over $500 and you can just about be assured that the person selling their success is making their money from selling it, not from taking heed of their own advice.

In the end, I guess I’m glad the phone batteries died. I’m glad I didn’t waste any more of my time listening to a con rather than reading a story to my little chicken before she went to bed. And I really feel for those who are about to part with plenty of their hard earned for a load of crap.