Related Articles
Share your Love Story»Read More
Muffin Break’s Great Bake Sale!
»Read More
How to text a guy
»Read More
St. Jerome’s Laneway Festival
»Read More
Stringsof.me - it’s like Facebook, but not!
»Read More
Love it, Win it!
 |
WIN Impulse Love PacksEnter Now |
|---|
 |
WIN a double pass to My Week With Marilyn!Enter Now |
|---|
Money Smarts: Laura’s Guide to debt and borrowing
As young women, we owe it to ourselves to have at least a basic understanding of things like credit, hire purchase, student loans and tax – because it’s not something we learn in school! Which is why we’ve hooked you up with Laura Tighe from SavY. She’s 24/7 Girl’s new money guru – and she’s here to dish out advice and answers to your questions.
Holiday shopping
Hi girls
How many times have you needed to buy something but you haven’t had enough money? For a lot of us this simply means saying please and asking mum or dad for a bit of extra $$. However, the older you get the less willing your parents will be to fund your spending habits. There are still plenty of people out there willing to give you cash, but the problem is that their money comes with a few conditions.
Fact: When you borrow or take out a loan you will have to pay back an excess on top of the amount you owe! This is in the form of a ‘fee’ called interest. The interest rate is the percentage of your total loan that you will have to pay back each year in interest.
Condition one – SHOW ME THE MONEY
Yep, the first difference between taking money from the olds and these new guys (banks, finance companies, and plenty of shops in the form of hire purchase), is that these new people see themselves as “lenders” and thus they want their money back!
Fact: Hire purchase is where you buy an item today, and then pay for it in small chunks weekly or monthly. The only problem is that the interest rate is usually around 18-22% a year. This means if you bought a $1000 TV and you paid it back over two years it would cost you around $1400!!!! – That’s $400 you’re paying for hot air!
Condition two – WE WANT MORE
The second thing is that these people will charge you interest! Just like the two facts have explained, by paying interest you’re effectively paying for hot air! Why not share some of your own savvy tips with our team or suggest a theme for the next SavY girls column? Email us here.
Q: Laura – I want to buy an iPOD for $400. I don’t have enough. At this store in town they are selling them for hire purchase with no down payment, should I buy this? Cindy
A: Hey Cindy. That sounds like a great deal doesn’t it – pay no money and get an ipod. The problem is that depending on how long it takes you to pay it back it could cost you $100-$200 in interest alone, thus changing the price tag to nearly $600. Then you need to think, if you don’t have enough money for it now, how can you afford to pay back $10, $20, or $30 a month for the next year or two? If you saved you would get the ipod for much less and you would also be debt free to buy something new way faster!
Tip: Try to think ahead – can you afford a $30 repayment every month for the next year or so? It is often really hard to think years ahead with your budgeting. Try to start by considering the consequences that your actions will have a few weeks or months in the future! You’re much less likely to get into huge debt this way!
Who is SavY?
SavY was set up by a group of Auckland University Business School students to help young Kiwis like us get a better grip on money matters. They run work-shops and courses in schools and for school leavers. Check them out here>>
Who is Laura?
Name: Laura Catherine Tighe
DOB: 10/11/88
POB: North Shore, NZ
Degree: Commerce (majors Marketing +International Business)
Favourites: Wendys, a full tank of gas, new shoes, my cats, sushi & uni holidays.
|
great stuff. Posted by POWERBALLIN25 "on" 08/13 "at"12:17 AM |
 |
Thanks for the Tips, of Hp interest. Posted by Xxc0rtxX "on" 08/12 "at"03:24 PM |
Best of the rest
