December 14, 2022 • 28 mins
Whether you’re a mad-keen budgeter like Jess, or adopt a more ‘go with the flow’ attitude like Dom, the New Year heralds a fresh opportunity for everyone to get their finances in order.
2023 is shaping up as a potentially tough year for household budgets, amid the rising cost of living, interest rate hikes, and increasing concerns about a global recession.
But there are things you can do now to safeguard your money, which we explore in this week’s episode of the It All Adds Up podcast.
It All Adds Up is the podcast where we make money easy to understand so that listeners can begin building their financial wealth. You can submit questions via email or voice memo to italladdsup@nine.com.au for us to answer each week.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:07):
Hello and welcome to It All ends up the podcast
where we chat about money, how to get it, how
to spend it and how to invest it. I'm money
editor Dom.
S2 (00:13):
Powell, and I'm senior economics writer Jess Irvine, and this
is our final episode of the year. Dom I can't
believe we've actually this is our 17th episode. Time flies
when you're having fun.
S1 (00:24):
17 It feels a bit like I feel that we
should have finished it on a round number. Obviously we
didn't plan this very well, but 17 just feels like it's,
it just sort of irks me a bit. But seven
it's a lot. We did a lot of episodes.
S2 (00:35):
It's a bit random, but yes. No, there's been some
excellent if I do say so myself. Episodes that we produced.
Did you have a favorite so far?
S1 (00:43):
I think my favorite was the one we did on Hacks.
I really enjoyed doing that one. If you have a
listen to it, go back and listen to it. But
I think it's just sort of one of those things
that we're in a very unique sort of situation where
inflation really does matter if you hexed it. So talking
about it, thinking about it, I think is really important.
S2 (00:59):
Yeah, my favorite one we've done so far was on
pay rises and I think it's a sensitive topic for
a lot of people. Nobody wants to ask, but it's
just so important that you ask in the New year.
And we're taking a little break, but we're going to
replay over the summer some of our best hits, including
the next one and including the pay rises ones. So
you will still be getting little snippets from us dropping
(01:21):
into your podcast feeds in the coming weeks ahead while
you're sunning yourselves at the beach, hopefully. And yeah, we're
looking forward to reading some of those for you.
S1 (01:31):
Yeah, it's sort of sort of like a greatest hits,
you know, those so fresh CD's that everyone used to
get back in the day. It's like a so fresh
hits of hits of this podcast. 2022.
S2 (01:40):
Yeah, it's probably a bit premature for our greatest hits
of all time. I don't think we've been going on.
S1 (01:44):
No, no, I think it's fun. I think it's all right.
I think bands, bands are a great asset album for
being around for like, you know, five years. So. All right,
we're getting that this week. We're rounding off 2022 with
some advice to get you prepared for next year and
thinking about what it sort of means to sort of have,
you know, to be financially successful or maybe not even successful,
just sort of financially stable in in 2023. And just
(02:07):
what does that what does that mean to you when
it sounds what does that sort of concept look like
when we're going into the new year?
S2 (02:12):
Yeah, I mean, many people would think that's having a
lot of money to be financially successful. I just need
to have quite a lot of money. But for me,
it's sort of just I mean, it's something that has
evolved in my own life over the last couple of years,
but just having a sense of being in financial control
and actually when they do sort of studies of wellbeing
(02:32):
next to, you know, having healthy relationships and a sense
of purpose in life, having a sense of being in
control of your money is one of the major predictors
of whether a person is going to feel well or not.
So it's it's really important and, you know, it's going
to be a stressful year for many people. In 2023,
(02:52):
we've got the rising cost of living that is still
going to be an issue. And of course, particularly for
people with mortgages, we're going to be hit in the
face with a lot of rate hikes, particularly if you're
on the fixed interest loans as I am. My fixed
rate expires in June next year. So I will be
confronting a doubling, if not more, in my interest rate
(03:15):
when that happens. So I think I would just like
for people to think through in advance what some of
the issues are going to be around their finances and
try to get ahead of the game a little bit
just so that you feel in control of your finances? Yeah.
What does financial success mean to you, Don?
S1 (03:32):
Yeah, well, I think I'm sort of in the same boat.
I think it's less that around having a big lot
of money, though. Obviously that's nice. But, you know, I
think it's more just about not being concerned or not
being worried or at least minimising your level of concern
of worry, worry about your finances and just sort of
being prepared for the whatever, whatever the world throws at you.
(03:52):
And by by golly, is throwing a bit at us
at the moment. You know, there's, there's a little bit
going on and has been for a while. So I
think I think it's just more that sort of level
of stability that's that's sort of what it what it
means to me. And I think that's what we should
all be aspiring to or hoping to aspire to.
S2 (04:08):
Yeah. And are you and New Year's resolutions sort of person?
S1 (04:11):
Look, not really. I have to say, every now and
again I think about making New Year's resolution. But, you know,
I just sort of I just sort of let it go.
I sort of go with the flow sort of guy.
S3 (04:20):
You know.
S2 (04:21):
This is the year into my yang, which.
S3 (04:24):
Is that I have rigorously.
S2 (04:26):
Since I started writing at the Herald, I think been
set setting myself New Year's resolutions. I once had a
New Year's resolution that I was going to save a
dollar for every for every dollar that I spent or something.
I was going to do a minute's exercise or something.
I have a sort of dual purpose to sort of
have health and money related.
S3 (04:44):
So that's what that.
S1 (04:46):
Seems to say to.
S3 (04:47):
Me, like.
S2 (04:48):
It was some sort of motivation to get me to
exercise or something.
S3 (04:53):
It didn't like that. That was that would be.
S1 (04:55):
So many minutes of exercise. Like, obviously that's great if
you could do that, that's amazing. But like, say your
mortgage is like, you know, two grand or something. That's 2000.
It's an exercise.
S3 (05:06):
Well, I mean, read.
S2 (05:07):
That over a month. I don't know.
S3 (05:08):
Yeah.
S1 (05:09):
Then read everything else on top of that that you spent.
S3 (05:11):
I don't know. It was.
S1 (05:13):
It sounded admirable, Jess, but I think. I think that
might have been a bit far fetched.
S2 (05:16):
Over the decades, that's evolved to this year, My financial
resolution was just to track every dollar that I spent,
and I did that. So. And that is actually something
I've embedded into my lifestyle, is just to be a
tracker of where my money is going. And that's actually
my number one strategy. And thank you for indulging me
and letting me kick off with this one as our
(05:36):
strategies for people, because I think a lot of people
would take that is to Mickey Mouse. I'm beyond that.
I don't have time for that. I don't want to
do that. But I am. Having said that, I'm just
surprised since I've been writing about tracking my spending, the
number of people and readers and listeners who contact me go, Yeah,
I've kept a spreadsheet of every dollar I've spent since 1974.
(05:59):
You know, for some of our older listeners, it's actually
something that is quite common to do. And if you
are feeling scared or worried about your finances for 2023,
just one really simple practical thing you can do is
to start to pay closer attention to where your money
is going. I have my own spending tracker that I use.
(06:20):
You can find that through my Instagram money with Jess
play along at home with. Exactly. I just have a
sheet of paper and I write down coffee for dollars.
You know, the utility bill for water, which is quarterly,
you know, $250. And I track everything. So I have
that visibility about where my money is going, and that
helps me to plan for where I want to go.
(06:41):
And that's been an absolute revelation for me in my life.
And that has given me that sense of control that
I think a lot of people are going to be
looking for in the year ahead because things are moving
quickly and you're going to really need to be reviewing
a lot of your expenses to see if you can
keep up, you know, with the mortgage or whether it's
the rent going up. And, you know, I would just
like to be the person in the world who normalizes
(07:03):
that and just to go, yeah, it can be as
simple as track your spending, find out where your money
is going. And lots of us are doing it. Not Don. No.
S1 (07:12):
No. Here's the thing and again on the into to
Jess's yang on the on the guy this is out
here and it's not not budgeting at all it's like
shooting from the hip. Yeah I look it's great because
it means that we get to see both sides of
the coin. But I mean, that being said, I lived
this way. It may not be the best way to live.
I'm sure it's probably better of you if you do
actually think about things and plan and budget things a
(07:34):
bit more than I do. I think that Jess's strategies
are well-worn and and seem quite, quite good. So, you know. Yeah.
S2 (07:41):
And you don't seem particularly stressed about your money either.
I think it's sort of if anyone is feeling that
agitation and fear, it's sort of an exposure therapy thing
about just a way to steer your money in the
face of sort of if it's scaring you. Take a
little look.
S1 (07:55):
Absolutely. And I think that sort of brings us to
the our second tip, which is sort of around thinking
about the things that are coming up this year, namely refinancing,
because obviously, as just mentioned, there's going to be a
lot of people coming from fixed interest rates to, you know,
probably onto a variable rate, which is going to be
likely to be a lot higher than their fixed rate.
So that will be sort of a cascading effect for
(08:17):
a lot of people. There's this sort of talk of
this fixed interest rate cliff, which we are approaching and
will approach in 2023. So I think the best idea
for that for anyone that's sort of in that boat
is just to get ahead of it and really think
about it well in advance, probably at least two months
before your fixed period expires and have a bit of
a look around and all those there's many, many, many
comparison websites where you can sort of look at the
(08:38):
best deals and the best offers and think about what
sort of variable rate you're going to move on to
and what sort of benefits you can get. Like, you know,
there always there are always people out there offering big
packages of cash. Cashback offers a very popular and have
become increasingly more popular as lenders have been sort of
fighting for for people's money in people's business. So definitely
(08:58):
some things to look in the into the just.
S2 (09:01):
Yeah and one of the trends that seems to be
becoming entrenched and I think will continue for 2023 is
the banks are sort of not too backwards in coming
forward and saying, you know, they are offering lower interest
rates to attract new customers. So the new customer variable
rates are lower than the existing customer variable rates. You know,
(09:21):
the incentive, they are trying to steal customers from each other.
And if you can put yourself through the effort of
refinancing and it can be a bit of can be
a bit of a hassle depending on how complex your
situation is. But there will be cheaper rates for new customers.
And the best way to get them is to become
a new customer. I, I have a sort of I
don't endorse anyone, but I do like to look at
(09:44):
there's an online only lender called Tick tock not tick
tock the queue for the kids, which I'm on by
the way but TikTok and I was just check what
they're variable rate they've got a 4.61% comparison rate offer
with with a mortgage offset and I. Like to check in.
(10:05):
So if you're sitting there and your mortgage rate is
already at a five plus, do just know that there's
probably some cheaper rates for you. Another one that came
up I looked on right city dot com Heritage bank
was offering 4.69% going into Christmas plus the $3,000 cash
back not endorsing any of those but just to let
you know there's banks this heaps of lenders out there
(10:26):
and probably ones you've never heard of before and this
is the time to go looking for for a better deal.
And with a note that some people are going to
find that difficult because they will have seen the equity
that they have in their home decline with house prices.
So if you've gone over that 80%, Elvia, because house
prices have come down, it may be more difficult for
(10:47):
you to refinance because you might be paying Lynda's mortgage
insurance when you do. So for people who are sort
of in that situation are stuck. The best piece of
advice I can offer you is if you're negotiating with
your current lender, just ring them up and say, you know,
don't mention about the LVR stuff because they wouldn't figure
that out until the sort of mortgage application process where
they would value your property just sort of come in
(11:09):
strong and ask for a mortgage discharge form, which is
the magic words these days. That's the form that tells
them that you're very serious about switching to another bank
and see how you go with that. But it is
going to be more difficult for people who who've recently
bought and the value of their property has come down.
So they haven't quite got as much equity. So refinancing
is going to be difficult, but yet about two months
(11:31):
out from when you fix is ending, that's when you
want to be thinking in 2023 about refinancing.
S1 (11:36):
Yeah, you've got to scare those banks, you know.
S2 (11:39):
You've got to play the game, but you know, keep.
S1 (11:41):
Them on their toes. They keep us on their on
our toes. So, you know, you should. Yeah. Yeah. Like he's,
he's sort of scary. You call them often like, oh,
when a malicious judge, when you know, who knows what'll happen.
Maybe they'll offer you a big fat wad of cash
to to stay that happen to my sister and she
ended up staying with the lender that she was already with. So.
S2 (11:57):
You know, getting cash back to stay with your existing lender.
S1 (12:00):
It's insane. Like they just so desperate to keep people
on the books that they will they will go to
the ends of the earth. Well, not quite. But, you know,
they will do a lot to keep you around. So
it's definitely worth milking that.
S2 (12:12):
Yes. Ask number three strategy for 2023 is to review
your insurances. And people ask me like, oh, yes, I
need to save some money because interest rates are going up.
And I say review your insurances. And they say, what
about another tip? Because that sounds really boring, but this
is actually a great time of year. We've got a
(12:32):
little bit more time on our hands, you know, do
spend a lot of time at the beach. But if
you've got an extra hour or so to call up
your insurance company. So I'm thinking your car insurance, your
home insurance, your health insurance, and then if you've got
any forms of the life insurance TPD and sort of
income protection insurance, make sure that you know at least
(12:55):
what you are and are not covered for. And know
that if you do sort of scale back some of
the coverage in ways that you're comfortable with that will
reduce your premiums. So just having a look at each
of those insurance policies, you know, reading some of the
finer details because, you know, we talk about, you know,
don't drink coffee or don't, you know, your Netflix subscription.
(13:17):
But if you want to save sort of in the
tens to hundreds of dollars per year, your insurance contracts
are one of the best places to start for some
of the more substantial savings. So you might be able
to keep your coffee and, you know, keep your Netflix
if you sort of maybe look at your car insurance and,
you know, increase the excess on that perhaps, which is
(13:39):
a strategy I love, which means you're more exposed to
paying the higher excess out-of-pocket in the event that you
do make a claim, but it makes your premiums cheaper.
So particularly if you're someone with a bit of cash
set aside to cover, you know, a rainy day expense
like that, and you can afford to pay the higher
excesses that's going to save you. It's going to help
your cash flow in the in the immediate term. So
(14:02):
that can be a really great strategy for saving, I reckon.
S1 (14:04):
And again, look, you could even do this while you're
at the beach. Pick up the phone and just give
them a call. Get on the blower, go talk to
your insurer and see what they'll offer you and see
what they'll do for you. Because again, everyone's everyone's in
the same sort of boat and there's deals out there
that you can get that may not be immediately obvious.
So getting on the phone underrated I'd say in in 2022. Yeah.
S2 (14:24):
And legit to say I don't have enough money. I'm
feeling the cost of living pressure and just come at
it fairly directly and I think that's totally fine. There's
no shame in that. We're all feeling that go go
for it and just haven't got the money to afford this.
How can I make this cheaper? And they might come
up with some strategies for you or just a better deal.
S1 (14:43):
Yeah, absolutely. And my, my fourth tip is sort of
a bit of a crusade I've been on during the
course of these 17 podcast episodes, which is making life
easier for yourself through technology and other things. I've said
this a number of times. Regular listeners will know this.
I have like a bank app I'm with like a
new fangled digital bank. It's. It's made banking is made
(15:06):
my finances like far, far easier. And I know that
there are people out there who are still sort of with,
you know, that whatever bank they've been with for 30
years and their parents or whatever. It's not that hard
to switch banks. It's really not that hard. You have
to it does take a little bit of a bit
of time, but it is worth doing because sometimes this
the quality of life that you will get from a
(15:28):
newer bank or perhaps a different bank with some sort
of newer technology, like there's loads of them out there.
It's just it's just so good. It's so good.
S2 (15:37):
This happened with my super fund recently. I switched super
funds and I didn't realize what I was missing out
because the new fund has like an app where I
can check my balance. I used to have to log
in through a web browser and see in it, and
it tells me and maps my, you know, past contributions.
And it's just a lot better.
S3 (15:54):
Yeah, absolutely. And this is you.
S2 (15:56):
Don't know until you switch and see what else is around.
S1 (15:59):
And this is happening across the board, like I'm talking
about the bank banking app because obviously I use it
every day and it's very front of mind. But like
pretty much every single thing that may like, you know,
look at anything in your life that you may have
been using for a very long time or been with
for ages. And just think about ways that maybe, oh,
maybe there's a better way to do this, or maybe
there's a new way to do this, especially with something
(16:19):
to do with your finances. Like, it's almost like it's
like disrupting yourself. If we're going to use some real
Silicon Valley sort of, you know, terminology here. But it
is quite literally just like think about anything where you
might be able to improve your quality of life, because
that's a big part of, you know, finance and and
getting more on top of your finances. If it's easy
to do, you're going to be more likely to do it.
So and and this is like, you know, this can
(16:41):
be as easy as something like, you know, there's apps
that make it easy to split expenses with friends, you know,
or petrol spy, which we've spoken a few times about,
which helps you sort of find all the cheap petrol
around you. Like just little things like that. Like that's
the sort of stuff that's going to make 2023 more
manageable for you because it's just small and incidental but
can actually make a big difference in the long run.
S2 (17:03):
Yeah, I never fill up the tank without checking the
petrol app for in New South Wales, Fuel check is
the one you want and it's just creating those new
behavioural habits for yourself that you know, I'm a person
who checks a petrol price out before I fill up
and you know, it does require new ways of thinking,
particularly if you're not across all the technology, but you know,
it is well worth sort of getting a little bit
(17:25):
uncomfortable by, you know, and another one I like now
using is cashback sites like Shopback Cash Rewards. It's an
extra step in your life, but one that will make
it a lot better if you can get your head around.
And I just use I bought like ten something that
was $10 and got sort of $0.20 back on a
cashback up. But it's just teaching me. It's a learning
curve of to how I can get those savings and yeah,
(17:48):
but just maybe committing to try one of those new
apps or downloading, you know, the petrol price app in your,
in your state is awesome. It's well worth it.
S1 (17:58):
Yeah. And when in doubt talk to Zuma. Talk to
someone under the age of 25 because they'll have it
all sorted out and no.
S3 (18:04):
Sooner is that.
S1 (18:05):
I think so.
S3 (18:06):
Is that a thing?
S1 (18:07):
Because I like I'm 26. I know I'm right on
the edge of being a part of being a millennial.
And I think the next generation is gen-z or zoomers. So.
S2 (18:15):
Oh, we're calling that Zuma.
S3 (18:16):
Yeah, yeah, yeah, yeah.
S1 (18:19):
Exactly. So talk to some it turns out under the
age 25 because they will have it sorted out. They will.
S2 (18:24):
Cost a young person.
S3 (18:25):
On the side. Scuse me, young fellow. How do you
do your finances? Um.
S2 (18:32):
Yeah, the kids, they're pretty savvy. They know what's.
S1 (18:34):
They know what's going on. And like, just as a
final point around this off, this also extends to things
like concessions and rebates, which which we talked about in
the past. But there are many of them out there,
and especially with the energy price sort of debacle that's
going on, it looks like there will be more rebates
and concessions available for people next year. So definitely keep
on top of that. And I believe even in Victoria
(18:55):
they have reintroducing the $250 energy rebate for next year
as well. So that's something that Victorians look out for.
S2 (19:01):
And so finally, just number five to say that this
is a really good time to rest and reflect and
think about your goals and reset your thinking. You know,
about many things, but including money. So having some sort
of idea of what you want the New Year to
look for for you, or it could even be as
(19:22):
simple as sort of how do I want to feel
about money in the new year or how do I
currently feel at the end of this year? Probably spend
a bit too much on Christmas or but just being
aware of what sort of relationship you you have with money.
Because I think, you know, going into 2023 is going
to be a more difficult year for people financially. I
(19:44):
think that's fair to say across the board. So having
a little moment to to rest and reflect whether you
actually want to set a New Year's resolution, I'm not
actually not going to set a money related use resolution.
I actually do them by financial year because I love
to have two New Year's every year and it.
S3 (20:01):
Seems more appropriate to think.
S2 (20:02):
About money via financial years.
S1 (20:03):
But that's. Suggesting to do this just.
S3 (20:06):
Like.
S1 (20:08):
Your parody of yourself. Just.
S2 (20:09):
But I do. But these sort of turning points in
the calendar year, I do love to break up time
into sort of nice, easily measurable things. And I think
there is a new year effect where you can sort
of surf it for a little while. Maybe it doesn't
last forever, but at least sort of saying, I want
to have a new relationship with money. I want to
feel better about money in the new Year. What's one
(20:33):
of the one tips I heard on the podcast that
I will commit to in 2023?
S1 (20:37):
Yeah, and I think this year a lot of people
were shocked and were quite surprised by the cost of
living crunch. Obviously war in Ukraine and stuff that sort
of came out of nowhere and people were sort of
a bit unprepared. But I think now that we're in
this environment that we've been in for the past nine
or so months, it makes it a little bit easier
to sort of prepare for it and think about it.
And I think that's what is it's a good time
(20:58):
to do over this sort of sort of end of
year break, obviously, take some time off, have a great time.
You know, enjoy your time with your loved ones. Don't
worry too much about money because that's what Christmas is for.
But then, you know, it is also a great time
to sort of think about, you know, get yourself prepared
for energy bill rises, interest rate rises, all those sort
(21:19):
of terrible things that we're not going to look forward
to at all when they come through next year. But
the more sort of steeled you are for the the
better it will be rather than this year where it
sort of came out of nowhere like a freight train.
S2 (21:29):
Yeah. And I think what's kind of nice about it
is we're all in the same boat. It's actually yeah,
it is across the board, these pressures. We're all going
to be going into 2023 feeling a little bit. A
little bit. I'm a little bit nervous about when my
mortgage interest rate rolls off. Yeah. So just to feel
like you're not alone in it. And it is, it's
something that we are all going to have to pay
(21:50):
a little bit more attention to in the new year.
And yeah, I agree. Everyone have a have a great
break over summer. Hopefully you can get some time off
and we'll be back in 2023 to help everyone with
more financial tips and strategies so you won't be alone
will be will be freaking out right next to you.
S1 (22:08):
Exactly. And for our final listener question of the year,
this one's from Zac, and it is for Jess. So
I'm going to bow out of this one. But I'll, I'll, I'll,
I'll posit, which is about solar panels. So Zach wants
to know how you would invest evaluate solar panels as
an investment. He thinks that $1,000 a year annual savings
(22:29):
on your electricity bill on an on a $9,000 investment
is a pretty good return and might be a better
return than anything else you could invest in at the moment,
such as equities or cash or anything along those lines.
He wants to know Cassandra, He just has done the
research from this. What's the cash? You know, what's the
what's the bad thing here? Like, does this solar panels
(22:50):
a good investment to make money on or not?
S2 (22:52):
Yeah, well, if you are in the fortunate position of
sort of having nine to 10 to $11000 sitting around,
this is really something for people to think about over summer.
As you're switching on your air conditioning, you have to
think about, you know, what sort of dollar return will
you get on your money. So you've got to have
that outlay. You're going to save a certain amount on
your electricity bill because you know, you're getting feed in
(23:13):
tariffs by putting money back into the grid. And you're also,
you know, getting free energy from the sun when you
use it. So I did do the sums on this recently.
If you Google my name just so on and solar panels,
you'll you'll find that. But it is saving money is great.
Not spending money is a great investment in a way
because if you compare that so you've dollar you know
(23:34):
you get your you spend your $9,000, maybe you get
$1,000 every year in savings on your bill, you know,
and about 10 to 11% return. That's true. Maybe you
think I'm going to go invest that dollar in the
share market and then you'll get a percentage return. It's
incredibly volatile and you have to pay tax on the earnings.
(23:54):
So that's something to keep in mind. So and then
maybe you could have the money sitting in the offset account.
That is another way of just saving money because you're
not going to pay as much interest on your loan
because you've got the extra dollar sitting there. So that's
also a great strategy, but yet finding a way where
it's just going to cut your costs out of pocket
(24:17):
in an ongoing sense. That could be a great thing
for a lot of people to do. If the caveat
being if you've got the $10,000 or so that's going
to cost you to install the solar panels. So yeah,
I think the tax it's the tax thing that really
when you comparing it with alternative uses of your money
and even putting money in a 4%, you know, savings account,
you're going to pay tax on any earnings that you
(24:40):
get on that. And particularly for high income earners, if
you're at a higher marginal rate that starts to get
you know, you get a lesser return because you're paying
losing more of that on tax. So, yeah, there's nothing
like a quick, you know, saving an expense. Cutting an
expense is another way of investing money if it does
make sense. And I think there's that is something definitely
(25:01):
worth thinking about. And I don't think you're missing anything
there that. That could just be a really good saving
if people have have that sort of disposable cash around.
S1 (25:09):
Yeah, And it's I think it's also worth thinking about,
you know, how long are you going to be in
the place that you going to put the panels on?
You know, I would love to have solar panels on
my apartment despite the fact that I'd need to get
the approval of the other 13 people that live in
the block. But, you know, I'm probably only going to
be there for maybe another five ish or more years
sort of thing. So like, therefore, it's not worth it.
So I think there's there's a lot of things to
take into account. But, you know, yeah, I'd do it
(25:31):
if I could.
S2 (25:31):
Yeah. Solar panel advocates do say that if you do
install them, it will increase, it will increase the sale
price of your home. So I'm not sure if that.
S3 (25:38):
Is true or not that that.
S2 (25:40):
Might be a bit of a line, but yeah, definitely
worth investigating.
S1 (25:44):
And lastly, a budget tip. Just bring us bring us
into the end of the year. Sleigh bells ringing, carols, caroling. Well,
what is it? What's your what's your festive budget tip?
S2 (25:56):
Well, maybe, you know, you're at your Christmas party. You've
had a wonderful time. You should definitely not drive yourself home.
And I want everyone to get home safely this Christmas.
One of my tips is to mix up your ride
share app. So I feel like Uber has become like
Google versus I'm going to Uber, you know, I'm going
to Google something and you've you've forgotten that there's actually
competitors to Uber. So I actually use Didi for the
(26:20):
first time in the last couple of months. And there's
also Ola and Lyft l y left. You know, they're
not in every single area of Australia, but it's well
worth having a Google. And just it's another one of
those habitual things, you know, you think, I've got to
get myself home, I'll just get an Uber. Remember that
there are competitors and if you Google Didi and $20
(26:42):
voucher or even just a voucher, I guarantee you will
get to a website where you can get at least
$20 off your first drive, which might get you home
from your Christmas party this year. So yeah, don't forget
to shop around on absolutely everything, including Rideshares.
S1 (26:58):
And here's my supplementary budget tip, which is don't forget
about taxis. I go to taxi the other day because
sometimes you go into you go going to Uber or
your Didi or whatever, and it's surging and it's like,
you know, $80 to get you home or something ridiculous.
But you can stand on the street and hail a cab.
That's still something you can do in like the middle
of the city or something, you know, similar to that.
(27:18):
And it's usually cheaper. And they can't surge price.
S2 (27:20):
They do night time.
S1 (27:22):
So they do they do that. But like, it'll be
like a flat thing. And, you know, often they're pretty,
pretty good experience. But, you know, there is the caveat
that the taxis can sometimes be a little bit dodgy. But,
you know, we want we want, you know, domain domain not.
S3 (27:38):
To be just place. It is. It is. It is.
I think this is.
S2 (27:40):
A good time to call it taxi. This is the
end of the episode.
S1 (27:44):
It I'm hailing the end of the episode.
S2 (27:48):
The Christmas party is over. I hope everyone does have
a great break. And as as we say, look out
for our summer series of our greatest hits. Still hitting
your podcast players while we're on hiatus.
S1 (27:59):
Yes. And we'll be back in the first week of February.
Hopefully we'll have some juicy new tips. Well, no, not
hopefully we will have some juicy new tips and there'll
be all sorts of things going on that we'll be
able to talk about for for the new year. So
I hope everyone has a lovely break and we'll see
you next year.
S2 (28:16):
See you next year.
S1 (28:21):
This episode of It All Adds Up was produced by
Julia Carl KASELL. The information discussed is general in nature
and does not take into account your personal financial situation,
goals or objectives. You should always do your own research well,
get professional advice before making any major financial decisions. If
you like today's episode, hit follow a new podcast app.
Leave a review and recommend it to all your friends.
(28:41):
You can also submit your listener questions in text or
audio form, and it all adds up at 9:00 pm today.
Thanks for listening.
Hello and welcome to It All ends up the podcast
where we chat about money, how to get it, how
to spend it and how to invest it. I'm money
editor Dom.
S2 (00:13):
Powell, and I'm senior economics writer Jess Irvine, and this
is our final episode of the year. Dom I can't
believe we've actually this is our 17th episode. Time flies
when you're having fun.
S1 (00:24):
17 It feels a bit like I feel that we
should have finished it on a round number. Obviously we
didn't plan this very well, but 17 just feels like it's,
it just sort of irks me a bit. But seven
it's a lot. We did a lot of episodes.
S2 (00:35):
It's a bit random, but yes. No, there's been some
excellent if I do say so myself. Episodes that we produced.
Did you have a favorite so far?
S1 (00:43):
I think my favorite was the one we did on Hacks.
I really enjoyed doing that one. If you have a
listen to it, go back and listen to it. But
I think it's just sort of one of those things
that we're in a very unique sort of situation where
inflation really does matter if you hexed it. So talking
about it, thinking about it, I think is really important.
S2 (00:59):
Yeah, my favorite one we've done so far was on
pay rises and I think it's a sensitive topic for
a lot of people. Nobody wants to ask, but it's
just so important that you ask in the New year.
And we're taking a little break, but we're going to
replay over the summer some of our best hits, including
the next one and including the pay rises ones. So
you will still be getting little snippets from us dropping
(01:21):
into your podcast feeds in the coming weeks ahead while
you're sunning yourselves at the beach, hopefully. And yeah, we're
looking forward to reading some of those for you.
S1 (01:31):
Yeah, it's sort of sort of like a greatest hits,
you know, those so fresh CD's that everyone used to
get back in the day. It's like a so fresh
hits of hits of this podcast. 2022.
S2 (01:40):
Yeah, it's probably a bit premature for our greatest hits
of all time. I don't think we've been going on.
S1 (01:44):
No, no, I think it's fun. I think it's all right.
I think bands, bands are a great asset album for
being around for like, you know, five years. So. All right,
we're getting that this week. We're rounding off 2022 with
some advice to get you prepared for next year and
thinking about what it sort of means to sort of have,
you know, to be financially successful or maybe not even successful,
just sort of financially stable in in 2023. And just
(02:07):
what does that what does that mean to you when
it sounds what does that sort of concept look like
when we're going into the new year?
S2 (02:12):
Yeah, I mean, many people would think that's having a
lot of money to be financially successful. I just need
to have quite a lot of money. But for me,
it's sort of just I mean, it's something that has
evolved in my own life over the last couple of years,
but just having a sense of being in financial control
and actually when they do sort of studies of wellbeing
(02:32):
next to, you know, having healthy relationships and a sense
of purpose in life, having a sense of being in
control of your money is one of the major predictors
of whether a person is going to feel well or not.
So it's it's really important and, you know, it's going
to be a stressful year for many people. In 2023,
(02:52):
we've got the rising cost of living that is still
going to be an issue. And of course, particularly for
people with mortgages, we're going to be hit in the
face with a lot of rate hikes, particularly if you're
on the fixed interest loans as I am. My fixed
rate expires in June next year. So I will be
confronting a doubling, if not more, in my interest rate
(03:15):
when that happens. So I think I would just like
for people to think through in advance what some of
the issues are going to be around their finances and
try to get ahead of the game a little bit
just so that you feel in control of your finances? Yeah.
What does financial success mean to you, Don?
S1 (03:32):
Yeah, well, I think I'm sort of in the same boat.
I think it's less that around having a big lot
of money, though. Obviously that's nice. But, you know, I
think it's more just about not being concerned or not
being worried or at least minimising your level of concern
of worry, worry about your finances and just sort of
being prepared for the whatever, whatever the world throws at you.
(03:52):
And by by golly, is throwing a bit at us
at the moment. You know, there's, there's a little bit
going on and has been for a while. So I
think I think it's just more that sort of level
of stability that's that's sort of what it what it
means to me. And I think that's what we should
all be aspiring to or hoping to aspire to.
S2 (04:08):
Yeah. And are you and New Year's resolutions sort of person?
S1 (04:11):
Look, not really. I have to say, every now and
again I think about making New Year's resolution. But, you know,
I just sort of I just sort of let it go.
I sort of go with the flow sort of guy.
S3 (04:20):
You know.
S2 (04:21):
This is the year into my yang, which.
S3 (04:24):
Is that I have rigorously.
S2 (04:26):
Since I started writing at the Herald, I think been
set setting myself New Year's resolutions. I once had a
New Year's resolution that I was going to save a
dollar for every for every dollar that I spent or something.
I was going to do a minute's exercise or something.
I have a sort of dual purpose to sort of
have health and money related.
S3 (04:44):
So that's what that.
S1 (04:46):
Seems to say to.
S3 (04:47):
Me, like.
S2 (04:48):
It was some sort of motivation to get me to
exercise or something.
S3 (04:53):
It didn't like that. That was that would be.
S1 (04:55):
So many minutes of exercise. Like, obviously that's great if
you could do that, that's amazing. But like, say your
mortgage is like, you know, two grand or something. That's 2000.
It's an exercise.
S3 (05:06):
Well, I mean, read.
S2 (05:07):
That over a month. I don't know.
S3 (05:08):
Yeah.
S1 (05:09):
Then read everything else on top of that that you spent.
S3 (05:11):
I don't know. It was.
S1 (05:13):
It sounded admirable, Jess, but I think. I think that
might have been a bit far fetched.
S2 (05:16):
Over the decades, that's evolved to this year, My financial
resolution was just to track every dollar that I spent,
and I did that. So. And that is actually something
I've embedded into my lifestyle, is just to be a
tracker of where my money is going. And that's actually
my number one strategy. And thank you for indulging me
and letting me kick off with this one as our
(05:36):
strategies for people, because I think a lot of people
would take that is to Mickey Mouse. I'm beyond that.
I don't have time for that. I don't want to
do that. But I am. Having said that, I'm just
surprised since I've been writing about tracking my spending, the
number of people and readers and listeners who contact me go, Yeah,
I've kept a spreadsheet of every dollar I've spent since 1974.
(05:59):
You know, for some of our older listeners, it's actually
something that is quite common to do. And if you
are feeling scared or worried about your finances for 2023,
just one really simple practical thing you can do is
to start to pay closer attention to where your money
is going. I have my own spending tracker that I use.
(06:20):
You can find that through my Instagram money with Jess
play along at home with. Exactly. I just have a
sheet of paper and I write down coffee for dollars.
You know, the utility bill for water, which is quarterly,
you know, $250. And I track everything. So I have
that visibility about where my money is going, and that
helps me to plan for where I want to go.
(06:41):
And that's been an absolute revelation for me in my life.
And that has given me that sense of control that
I think a lot of people are going to be
looking for in the year ahead because things are moving
quickly and you're going to really need to be reviewing
a lot of your expenses to see if you can
keep up, you know, with the mortgage or whether it's
the rent going up. And, you know, I would just
like to be the person in the world who normalizes
(07:03):
that and just to go, yeah, it can be as
simple as track your spending, find out where your money
is going. And lots of us are doing it. Not Don. No.
S1 (07:12):
No. Here's the thing and again on the into to
Jess's yang on the on the guy this is out
here and it's not not budgeting at all it's like
shooting from the hip. Yeah I look it's great because
it means that we get to see both sides of
the coin. But I mean, that being said, I lived
this way. It may not be the best way to live.
I'm sure it's probably better of you if you do
actually think about things and plan and budget things a
(07:34):
bit more than I do. I think that Jess's strategies
are well-worn and and seem quite, quite good. So, you know. Yeah.
S2 (07:41):
And you don't seem particularly stressed about your money either.
I think it's sort of if anyone is feeling that
agitation and fear, it's sort of an exposure therapy thing
about just a way to steer your money in the
face of sort of if it's scaring you. Take a
little look.
S1 (07:55):
Absolutely. And I think that sort of brings us to
the our second tip, which is sort of around thinking
about the things that are coming up this year, namely refinancing,
because obviously, as just mentioned, there's going to be a
lot of people coming from fixed interest rates to, you know,
probably onto a variable rate, which is going to be
likely to be a lot higher than their fixed rate.
So that will be sort of a cascading effect for
(08:17):
a lot of people. There's this sort of talk of
this fixed interest rate cliff, which we are approaching and
will approach in 2023. So I think the best idea
for that for anyone that's sort of in that boat
is just to get ahead of it and really think
about it well in advance, probably at least two months
before your fixed period expires and have a bit of
a look around and all those there's many, many, many
comparison websites where you can sort of look at the
(08:38):
best deals and the best offers and think about what
sort of variable rate you're going to move on to
and what sort of benefits you can get. Like, you know,
there always there are always people out there offering big
packages of cash. Cashback offers a very popular and have
become increasingly more popular as lenders have been sort of
fighting for for people's money in people's business. So definitely
(08:58):
some things to look in the into the just.
S2 (09:01):
Yeah and one of the trends that seems to be
becoming entrenched and I think will continue for 2023 is
the banks are sort of not too backwards in coming
forward and saying, you know, they are offering lower interest
rates to attract new customers. So the new customer variable
rates are lower than the existing customer variable rates. You know,
(09:21):
the incentive, they are trying to steal customers from each other.
And if you can put yourself through the effort of
refinancing and it can be a bit of can be
a bit of a hassle depending on how complex your
situation is. But there will be cheaper rates for new customers.
And the best way to get them is to become
a new customer. I, I have a sort of I
don't endorse anyone, but I do like to look at
(09:44):
there's an online only lender called Tick tock not tick
tock the queue for the kids, which I'm on by
the way but TikTok and I was just check what
they're variable rate they've got a 4.61% comparison rate offer
with with a mortgage offset and I. Like to check in.
(10:05):
So if you're sitting there and your mortgage rate is
already at a five plus, do just know that there's
probably some cheaper rates for you. Another one that came
up I looked on right city dot com Heritage bank
was offering 4.69% going into Christmas plus the $3,000 cash
back not endorsing any of those but just to let
you know there's banks this heaps of lenders out there
(10:26):
and probably ones you've never heard of before and this
is the time to go looking for for a better deal.
And with a note that some people are going to
find that difficult because they will have seen the equity
that they have in their home decline with house prices.
So if you've gone over that 80%, Elvia, because house
prices have come down, it may be more difficult for
(10:47):
you to refinance because you might be paying Lynda's mortgage
insurance when you do. So for people who are sort
of in that situation are stuck. The best piece of
advice I can offer you is if you're negotiating with
your current lender, just ring them up and say, you know,
don't mention about the LVR stuff because they wouldn't figure
that out until the sort of mortgage application process where
they would value your property just sort of come in
(11:09):
strong and ask for a mortgage discharge form, which is
the magic words these days. That's the form that tells
them that you're very serious about switching to another bank
and see how you go with that. But it is
going to be more difficult for people who who've recently
bought and the value of their property has come down.
So they haven't quite got as much equity. So refinancing
is going to be difficult, but yet about two months
(11:31):
out from when you fix is ending, that's when you
want to be thinking in 2023 about refinancing.
S1 (11:36):
Yeah, you've got to scare those banks, you know.
S2 (11:39):
You've got to play the game, but you know, keep.
S1 (11:41):
Them on their toes. They keep us on their on
our toes. So, you know, you should. Yeah. Yeah. Like he's,
he's sort of scary. You call them often like, oh,
when a malicious judge, when you know, who knows what'll happen.
Maybe they'll offer you a big fat wad of cash
to to stay that happen to my sister and she
ended up staying with the lender that she was already with. So.
S2 (11:57):
You know, getting cash back to stay with your existing lender.
S1 (12:00):
It's insane. Like they just so desperate to keep people
on the books that they will they will go to
the ends of the earth. Well, not quite. But, you know,
they will do a lot to keep you around. So
it's definitely worth milking that.
S2 (12:12):
Yes. Ask number three strategy for 2023 is to review
your insurances. And people ask me like, oh, yes, I
need to save some money because interest rates are going up.
And I say review your insurances. And they say, what
about another tip? Because that sounds really boring, but this
is actually a great time of year. We've got a
(12:32):
little bit more time on our hands, you know, do
spend a lot of time at the beach. But if
you've got an extra hour or so to call up
your insurance company. So I'm thinking your car insurance, your
home insurance, your health insurance, and then if you've got
any forms of the life insurance TPD and sort of
income protection insurance, make sure that you know at least
(12:55):
what you are and are not covered for. And know
that if you do sort of scale back some of
the coverage in ways that you're comfortable with that will
reduce your premiums. So just having a look at each
of those insurance policies, you know, reading some of the
finer details because, you know, we talk about, you know,
don't drink coffee or don't, you know, your Netflix subscription.
(13:17):
But if you want to save sort of in the
tens to hundreds of dollars per year, your insurance contracts
are one of the best places to start for some
of the more substantial savings. So you might be able
to keep your coffee and, you know, keep your Netflix
if you sort of maybe look at your car insurance and,
you know, increase the excess on that perhaps, which is
(13:39):
a strategy I love, which means you're more exposed to
paying the higher excess out-of-pocket in the event that you
do make a claim, but it makes your premiums cheaper.
So particularly if you're someone with a bit of cash
set aside to cover, you know, a rainy day expense
like that, and you can afford to pay the higher
excesses that's going to save you. It's going to help
your cash flow in the in the immediate term. So
(14:02):
that can be a really great strategy for saving, I reckon.
S1 (14:04):
And again, look, you could even do this while you're
at the beach. Pick up the phone and just give
them a call. Get on the blower, go talk to
your insurer and see what they'll offer you and see
what they'll do for you. Because again, everyone's everyone's in
the same sort of boat and there's deals out there
that you can get that may not be immediately obvious.
So getting on the phone underrated I'd say in in 2022. Yeah.
S2 (14:24):
And legit to say I don't have enough money. I'm
feeling the cost of living pressure and just come at
it fairly directly and I think that's totally fine. There's
no shame in that. We're all feeling that go go
for it and just haven't got the money to afford this.
How can I make this cheaper? And they might come
up with some strategies for you or just a better deal.
S1 (14:43):
Yeah, absolutely. And my, my fourth tip is sort of
a bit of a crusade I've been on during the
course of these 17 podcast episodes, which is making life
easier for yourself through technology and other things. I've said
this a number of times. Regular listeners will know this.
I have like a bank app I'm with like a
new fangled digital bank. It's. It's made banking is made
(15:06):
my finances like far, far easier. And I know that
there are people out there who are still sort of with,
you know, that whatever bank they've been with for 30
years and their parents or whatever. It's not that hard
to switch banks. It's really not that hard. You have
to it does take a little bit of a bit
of time, but it is worth doing because sometimes this
the quality of life that you will get from a
(15:28):
newer bank or perhaps a different bank with some sort
of newer technology, like there's loads of them out there.
It's just it's just so good. It's so good.
S2 (15:37):
This happened with my super fund recently. I switched super
funds and I didn't realize what I was missing out
because the new fund has like an app where I
can check my balance. I used to have to log
in through a web browser and see in it, and
it tells me and maps my, you know, past contributions.
And it's just a lot better.
S3 (15:54):
Yeah, absolutely. And this is you.
S2 (15:56):
Don't know until you switch and see what else is around.
S1 (15:59):
And this is happening across the board, like I'm talking
about the bank banking app because obviously I use it
every day and it's very front of mind. But like
pretty much every single thing that may like, you know,
look at anything in your life that you may have
been using for a very long time or been with
for ages. And just think about ways that maybe, oh,
maybe there's a better way to do this, or maybe
there's a new way to do this, especially with something
(16:19):
to do with your finances. Like, it's almost like it's
like disrupting yourself. If we're going to use some real
Silicon Valley sort of, you know, terminology here. But it
is quite literally just like think about anything where you
might be able to improve your quality of life, because
that's a big part of, you know, finance and and
getting more on top of your finances. If it's easy
to do, you're going to be more likely to do it.
So and and this is like, you know, this can
(16:41):
be as easy as something like, you know, there's apps
that make it easy to split expenses with friends, you know,
or petrol spy, which we've spoken a few times about,
which helps you sort of find all the cheap petrol
around you. Like just little things like that. Like that's
the sort of stuff that's going to make 2023 more
manageable for you because it's just small and incidental but
can actually make a big difference in the long run.
S2 (17:03):
Yeah, I never fill up the tank without checking the
petrol app for in New South Wales, Fuel check is
the one you want and it's just creating those new
behavioural habits for yourself that you know, I'm a person
who checks a petrol price out before I fill up
and you know, it does require new ways of thinking,
particularly if you're not across all the technology, but you know,
it is well worth sort of getting a little bit
(17:25):
uncomfortable by, you know, and another one I like now
using is cashback sites like Shopback Cash Rewards. It's an
extra step in your life, but one that will make
it a lot better if you can get your head around.
And I just use I bought like ten something that
was $10 and got sort of $0.20 back on a
cashback up. But it's just teaching me. It's a learning
curve of to how I can get those savings and yeah,
(17:48):
but just maybe committing to try one of those new
apps or downloading, you know, the petrol price app in your,
in your state is awesome. It's well worth it.
S1 (17:58):
Yeah. And when in doubt talk to Zuma. Talk to
someone under the age of 25 because they'll have it
all sorted out and no.
S3 (18:04):
Sooner is that.
S1 (18:05):
I think so.
S3 (18:06):
Is that a thing?
S1 (18:07):
Because I like I'm 26. I know I'm right on
the edge of being a part of being a millennial.
And I think the next generation is gen-z or zoomers. So.
S2 (18:15):
Oh, we're calling that Zuma.
S3 (18:16):
Yeah, yeah, yeah, yeah.
S1 (18:19):
Exactly. So talk to some it turns out under the
age 25 because they will have it sorted out. They will.
S2 (18:24):
Cost a young person.
S3 (18:25):
On the side. Scuse me, young fellow. How do you
do your finances? Um.
S2 (18:32):
Yeah, the kids, they're pretty savvy. They know what's.
S1 (18:34):
They know what's going on. And like, just as a
final point around this off, this also extends to things
like concessions and rebates, which which we talked about in
the past. But there are many of them out there,
and especially with the energy price sort of debacle that's
going on, it looks like there will be more rebates
and concessions available for people next year. So definitely keep
on top of that. And I believe even in Victoria
(18:55):
they have reintroducing the $250 energy rebate for next year
as well. So that's something that Victorians look out for.
S2 (19:01):
And so finally, just number five to say that this
is a really good time to rest and reflect and
think about your goals and reset your thinking. You know,
about many things, but including money. So having some sort
of idea of what you want the New Year to
look for for you, or it could even be as
(19:22):
simple as sort of how do I want to feel
about money in the new year or how do I
currently feel at the end of this year? Probably spend
a bit too much on Christmas or but just being
aware of what sort of relationship you you have with money.
Because I think, you know, going into 2023 is going
to be a more difficult year for people financially. I
(19:44):
think that's fair to say across the board. So having
a little moment to to rest and reflect whether you
actually want to set a New Year's resolution, I'm not
actually not going to set a money related use resolution.
I actually do them by financial year because I love
to have two New Year's every year and it.
S3 (20:01):
Seems more appropriate to think.
S2 (20:02):
About money via financial years.
S1 (20:03):
But that's. Suggesting to do this just.
S3 (20:06):
Like.
S1 (20:08):
Your parody of yourself. Just.
S2 (20:09):
But I do. But these sort of turning points in
the calendar year, I do love to break up time
into sort of nice, easily measurable things. And I think
there is a new year effect where you can sort
of surf it for a little while. Maybe it doesn't
last forever, but at least sort of saying, I want
to have a new relationship with money. I want to
feel better about money in the new Year. What's one
(20:33):
of the one tips I heard on the podcast that
I will commit to in 2023?
S1 (20:37):
Yeah, and I think this year a lot of people
were shocked and were quite surprised by the cost of
living crunch. Obviously war in Ukraine and stuff that sort
of came out of nowhere and people were sort of
a bit unprepared. But I think now that we're in
this environment that we've been in for the past nine
or so months, it makes it a little bit easier
to sort of prepare for it and think about it.
And I think that's what is it's a good time
(20:58):
to do over this sort of sort of end of
year break, obviously, take some time off, have a great time.
You know, enjoy your time with your loved ones. Don't
worry too much about money because that's what Christmas is for.
But then, you know, it is also a great time
to sort of think about, you know, get yourself prepared
for energy bill rises, interest rate rises, all those sort
(21:19):
of terrible things that we're not going to look forward
to at all when they come through next year. But
the more sort of steeled you are for the the
better it will be rather than this year where it
sort of came out of nowhere like a freight train.
S2 (21:29):
Yeah. And I think what's kind of nice about it
is we're all in the same boat. It's actually yeah,
it is across the board, these pressures. We're all going
to be going into 2023 feeling a little bit. A
little bit. I'm a little bit nervous about when my
mortgage interest rate rolls off. Yeah. So just to feel
like you're not alone in it. And it is, it's
something that we are all going to have to pay
(21:50):
a little bit more attention to in the new year.
And yeah, I agree. Everyone have a have a great
break over summer. Hopefully you can get some time off
and we'll be back in 2023 to help everyone with
more financial tips and strategies so you won't be alone
will be will be freaking out right next to you.
S1 (22:08):
Exactly. And for our final listener question of the year,
this one's from Zac, and it is for Jess. So
I'm going to bow out of this one. But I'll, I'll, I'll,
I'll posit, which is about solar panels. So Zach wants
to know how you would invest evaluate solar panels as
an investment. He thinks that $1,000 a year annual savings
(22:29):
on your electricity bill on an on a $9,000 investment
is a pretty good return and might be a better
return than anything else you could invest in at the moment,
such as equities or cash or anything along those lines.
He wants to know Cassandra, He just has done the
research from this. What's the cash? You know, what's the
what's the bad thing here? Like, does this solar panels
(22:50):
a good investment to make money on or not?
S2 (22:52):
Yeah, well, if you are in the fortunate position of
sort of having nine to 10 to $11000 sitting around,
this is really something for people to think about over summer.
As you're switching on your air conditioning, you have to
think about, you know, what sort of dollar return will
you get on your money. So you've got to have
that outlay. You're going to save a certain amount on
your electricity bill because you know, you're getting feed in
(23:13):
tariffs by putting money back into the grid. And you're also,
you know, getting free energy from the sun when you
use it. So I did do the sums on this recently.
If you Google my name just so on and solar panels,
you'll you'll find that. But it is saving money is great.
Not spending money is a great investment in a way
because if you compare that so you've dollar you know
(23:34):
you get your you spend your $9,000, maybe you get
$1,000 every year in savings on your bill, you know,
and about 10 to 11% return. That's true. Maybe you
think I'm going to go invest that dollar in the
share market and then you'll get a percentage return. It's
incredibly volatile and you have to pay tax on the earnings.
(23:54):
So that's something to keep in mind. So and then
maybe you could have the money sitting in the offset account.
That is another way of just saving money because you're
not going to pay as much interest on your loan
because you've got the extra dollar sitting there. So that's
also a great strategy, but yet finding a way where
it's just going to cut your costs out of pocket
(24:17):
in an ongoing sense. That could be a great thing
for a lot of people to do. If the caveat
being if you've got the $10,000 or so that's going
to cost you to install the solar panels. So yeah,
I think the tax it's the tax thing that really
when you comparing it with alternative uses of your money
and even putting money in a 4%, you know, savings account,
you're going to pay tax on any earnings that you
(24:40):
get on that. And particularly for high income earners, if
you're at a higher marginal rate that starts to get
you know, you get a lesser return because you're paying
losing more of that on tax. So, yeah, there's nothing
like a quick, you know, saving an expense. Cutting an
expense is another way of investing money if it does
make sense. And I think there's that is something definitely
(25:01):
worth thinking about. And I don't think you're missing anything
there that. That could just be a really good saving
if people have have that sort of disposable cash around.
S1 (25:09):
Yeah, And it's I think it's also worth thinking about,
you know, how long are you going to be in
the place that you going to put the panels on?
You know, I would love to have solar panels on
my apartment despite the fact that I'd need to get
the approval of the other 13 people that live in
the block. But, you know, I'm probably only going to
be there for maybe another five ish or more years
sort of thing. So like, therefore, it's not worth it.
So I think there's there's a lot of things to
take into account. But, you know, yeah, I'd do it
(25:31):
if I could.
S2 (25:31):
Yeah. Solar panel advocates do say that if you do
install them, it will increase, it will increase the sale
price of your home. So I'm not sure if that.
S3 (25:38):
Is true or not that that.
S2 (25:40):
Might be a bit of a line, but yeah, definitely
worth investigating.
S1 (25:44):
And lastly, a budget tip. Just bring us bring us
into the end of the year. Sleigh bells ringing, carols, caroling. Well,
what is it? What's your what's your festive budget tip?
S2 (25:56):
Well, maybe, you know, you're at your Christmas party. You've
had a wonderful time. You should definitely not drive yourself home.
And I want everyone to get home safely this Christmas.
One of my tips is to mix up your ride
share app. So I feel like Uber has become like
Google versus I'm going to Uber, you know, I'm going
to Google something and you've you've forgotten that there's actually
competitors to Uber. So I actually use Didi for the
(26:20):
first time in the last couple of months. And there's
also Ola and Lyft l y left. You know, they're
not in every single area of Australia, but it's well
worth having a Google. And just it's another one of
those habitual things, you know, you think, I've got to
get myself home, I'll just get an Uber. Remember that
there are competitors and if you Google Didi and $20
(26:42):
voucher or even just a voucher, I guarantee you will
get to a website where you can get at least
$20 off your first drive, which might get you home
from your Christmas party this year. So yeah, don't forget
to shop around on absolutely everything, including Rideshares.
S1 (26:58):
And here's my supplementary budget tip, which is don't forget
about taxis. I go to taxi the other day because
sometimes you go into you go going to Uber or
your Didi or whatever, and it's surging and it's like,
you know, $80 to get you home or something ridiculous.
But you can stand on the street and hail a cab.
That's still something you can do in like the middle
of the city or something, you know, similar to that.
(27:18):
And it's usually cheaper. And they can't surge price.
S2 (27:20):
They do night time.
S1 (27:22):
So they do they do that. But like, it'll be
like a flat thing. And, you know, often they're pretty,
pretty good experience. But, you know, there is the caveat
that the taxis can sometimes be a little bit dodgy. But,
you know, we want we want, you know, domain domain not.
S3 (27:38):
To be just place. It is. It is. It is.
I think this is.
S2 (27:40):
A good time to call it taxi. This is the
end of the episode.
S1 (27:44):
It I'm hailing the end of the episode.
S2 (27:48):
The Christmas party is over. I hope everyone does have
a great break. And as as we say, look out
for our summer series of our greatest hits. Still hitting
your podcast players while we're on hiatus.
S1 (27:59):
Yes. And we'll be back in the first week of February.
Hopefully we'll have some juicy new tips. Well, no, not
hopefully we will have some juicy new tips and there'll
be all sorts of things going on that we'll be
able to talk about for for the new year. So
I hope everyone has a lovely break and we'll see
you next year.
S2 (28:16):
See you next year.
S1 (28:21):
This episode of It All Adds Up was produced by
Julia Carl KASELL. The information discussed is general in nature
and does not take into account your personal financial situation,
goals or objectives. You should always do your own research well,
get professional advice before making any major financial decisions. If
you like today's episode, hit follow a new podcast app.
Leave a review and recommend it to all your friends.
(28:41):
You can also submit your listener questions in text or
audio form, and it all adds up at 9:00 pm today.
Thanks for listening.
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