Dollars & Cents. Inside

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1 Consumer Tips Dollars & Cents Inside Overwhelmed or Doing it Tough? Step Up w Available at Kyabra Small Amount Loans Things to Watch Out For Bank Fees and How to Avoid Them How Jill Saved Bucket Loads on White Goods What the Shops Won t Tell You Proof of Purchase See Page 7 TAKE ME I M FREE Issue 04 April 2014 Foresters Community Finance & Kyabra Community Association

2 Overwhelmed or Doing it Tough? Financial stress is very difficult to manage, as it just wants to make you want to bury your head in the sand and hope it may go away. Like many other issues in life, it only gets worse if left or ignored, so the sooner you take action the more options you have and a better chance of putting in place a workable long-term solution. In very simple terms you need to ask: Has something changed recently in my finances? If the answer is NO: Then the stress is constant and means you are consistently overcommitted. You must either increase your income or reduce your expenses. Something has to change in your circumstances. You need to do a comprehensive budget to understand where you can cut back to reduce your stress. If your budget shows no slack then you must change something major in your life such as find some form of extra work or lower cost or share accommodation. If the answer is YES: Then again a comprehensive budget will show you where any savings can be made. Avoid borrowing money to pay any day-to-day bills as any loans will just eat into your budget. Contact the billers and make payment arrangements that you can meet and that fit within your budget. These are known as hardship arrangements. Things like a Centrelink advance or selling an unwanted asset can also help out. But if your temporary situation starts to drag on and on then you are in the long-term category and a major change will be required to get back to a stable financial situation. Making a good budget is the key to working out the best options and if you are unsure of what s involved call the Financial First Aid Hotline on They can also connect you up to assistance. Other good websites with lots of useful information are: Financial Counsellors Debt Advice: Banker Association: General Financial Advice: 2 Dollars & Cents

3 StepUp w Available at Kyabra If you live in and around the suburbs of Runcorn, Acacia Ridge, Coopers Plains and Mt Gravatt then you can apply for a StepUp loan at Kyabra. StepUP loans are for people holding a current Centrelink Concession Card or receiving Family Tax Benefit Part A and who have lived at their current address for more than three months. StepUP offers loans of between $800 and $3,000 for personal or household purposes such as: Household Items including fridges, washing machines, and furniture Cars Computers Medical and Dental expenses House repairs Car repairs provided by the National Australia Bank and is subject to NAB s credit assessment, which includes a credit report check. Please contact the Community Finance team at Kyabra if you are interested in a StepUP loan. Terms and conditions apply and are available on application. *Comparison rates are based on a loan of $2,500 over a term of two years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate National Australia Bank Limited ABN AFSL and Australian Credit Licence Cash loans are not available. Interest is charged at a fixed low rate 5.99% comparison rate 5.99% p.a and loans can be repaid over three years. fees apply. The loan is Dollars & Cents 3

4 Small Amount Loans Things to Watch Out For There has been many changes in fees and charges relating to small loans and cash loans over the past years and you need to be aware of these and how it may effect you. Small loans are those up to $2,000 repayable within 16 days to 12 months. There are new rules around the loans that limits the number you can get within a short time period and the maximum you will have to pay back (never more than twice borrowed). These loans can t have any interest charge but can have an establishment fee up to 20% and a monthly administration fee up to 4%. This monthly fee is fixed and the same each month so the longer the term the more you will have to repay. Some lenders will try an capitalise on this by extending the term of the loan by offering split repayments. That is say, 13 fortnightly repayments for the first six month followed by a further much reduced 13 repayments something like $50-$60 and then the others at around $20 per fortnight. The extra six months will add to the cost of the loan (ie. a $1,000 loan has a $40 monthly fee so a extra six months is $240). For a slight increase in repayments the loan could have been paid off within six months. So if each repayment is not the same, look very carefully at your contract and ask questions. Small loan repayments should be based on what you can afford to repay without difficulty or hardship. This will then set the amount you can borrow and the term. Do not commit to repaying amounts you know you will have difficulty with, as again each time you dishonour or reschedule a repayment then you can incur extra fees and possibly extend the term and pay another monthly fee. Community Finance Organisations such as Foresters and Kyabra offer loan products without monthly fees so they are safer and more affordable. The loan process may take more time but it involves engaging with the clients so that they understand their financial position and how the loan will fit into the budget without causing additional stress. 4 Dollars & Cents

5 Bank Fees and How to Avoid Them You could be giving money to your bank! And given that one of the big four banks in Australia recently posted a profit of over $6 billion do you really want to continue to give your money to them? If the answer is no, you may want to consider changing your bank account to a Basic Bank Account. If you don t currently have a Basic Bank Account, you may be paying unnecessary fees and charges. The following is a table from the Australian Bankers Association provides information on Basic Bank Accounts and the features they offer. Reference: info Basic Bank Accounts account keeping fees Free monthly statement minimum deposit amounts Ability to set up and cancel direct debits overdrawn fees Ability to access a debit card at no extra cost Free and unlimited transactions (branch, telephone, Internet, EFTPOS and bank owned and networked ATMs across Australia) To access these accounts, are customers required to meet any eligibility criteria?* ANZ Access Basic Citibank Plus Commonwealth Streamline Basic ING Orange Everyday NAB Classic Banking Westpac Basic Yes Yes Yes * Basic bank accounts are intended for customers who qualify for a concession card issued by the Government such as a Pensioner Concession Card, Health Care Card or Commonwealth Seniors Health Card. They are aimed at ensuring those on lower incomes have access to affordable banking services. If a bank requires a customer to hold a Concession Card or Health Care Card, they will typically require that income support or family assistance payments be paid into this account. However, some banks offer a free transaction account to all their customers (i.e. these accounts do not have eligibility criteria). Dollars & Cents 5

6 How Jill Saved Bucket Loads on White Goods Jill is on the Disability Support Pension. She also works part time. Jill s white goods were getting old and unreliable and as Jill has a serious arthritic condition, it was important that these appliances kept on working as visiting a laundry mat or washing clothes by hand was not an option. Jill applied for a Interest Loan to purchase a dryer. Lucky for Jill that clothes dryers are subsidised under the HESS Talking Stars program. Jill received a $100 subsidy, installation costs were also subsidised, and to top it off, she received a further discount from the Good2Gow buying service. All up Jill paid $250 for a new, two star energy rated dryer. machine and installation was $650. The HESS subsidy was valued at $345 so Jill only paid $285. After paying off her washing machine, Jill applied for another Interest Loan. This time for a fridge. The total price for the fridge and installation was $1,060. The HESS subsidy in this case was $570. Jill only had to pay $490. So by using the Interest Loans Scheme and HESS Subsidies, Jill was able to purchase a clothes dryer, washing machine and fridge for only $1,025. When Jill receives her $500 savings reward, Jill s total spend will be $525. HESS subsidies will only be available until 30 June After paying off her loan, Jill was offered the AddsUp Savings program. This program is only for people who have completed a Interest Loan. By saving $500, Jill will receive an additional $500 savings reward from the National Australia Bank. Jill also applied for another Interest Loan for a washing machine. The total price for the washing 6 Dollars & Cents

7 What the Shops Won t Tell You Proof of Purchase The item I have just purchased is faulty, and I don t have the original receipt. The guy at the shop said if I don t have the receipt, I can t claim the warranty. He is wrong! To claim your warranty on your faulty item, you need proof of purchase. A receipt is an excellent proof of purchase, so it pays to keep it just in case. But if you don t have the receipt here are some other types: Bank Statement If you purchased the item using a credit/debit card or using eftpos, this transaction will be recorded on your bank statements. Extended Warrantees Think carefully before adding any extended warrantees to your purchase. Consumer Law is clear that warrantees apply to the normal usage life of an appliance, not just the stated time, which may be shorter. So do your homework before buying. For further information about your rights you can download the free BuySmart Qld app. This consumer app provides you with information about your rights as you shop. You can also take photos of your receipts, set reminders of expiry dates of gift vouchers, warranties and lay-bys. To download the app visit: mobile-app.htm Retailers Records If you purchased the item using cash, but you know the exact date the transaction occurred, the retailer may have a record of this on their computer or filing system. Cheque Stub If you purchased the item using a cheque, the cheque stub may have sufficient information to be a proof of purchase. Dollars & Cents 7

8 Community Microfinance Reaching more people by recycling money and providing access to safe, fair and affordable credit. NILS ( Interest Loan Scheme) Interest free loans up to $1,200 for new household assets (whitegoods and furniture), educational, medical and basic household repairs. To locate your nearest NILS provider visit www. goodshepherdmicrofinance.org.au Alternatively: Call: individuals@foresters.org.au Website: Call: communityfinance@kyabra.org Website: Step Up Loans Low interest loan from $800 to $3,000 over 1 to 3 years for asset purchases such as whitegoods, cars, computers, medical expenses and house repairs. Where: Logan East Community Centre Call: stepup@lecna.org.au Where: Kyabra Community Association Call: communityfinance@kyabra.org Foresters Loans Personal loan from $500 to $4,000 over 1 to 2 years for any worthwhile purpose. Call: individuals@foresters.org.au Website: P: P: Disclaimer: The information contained within this newsletter from all writers is provided for informational purposes only and is not intended to substitute obtaining professional financial advice.