Is Private Health Insurance Still Worth It?

As part of the the recent Federal budget here in Australia, the income level that tax penalties kick in if you don't have private health insurance increased from $50,000 to $100,000 for singles; and from $100,000 to $150,000 for couples.

So if your income and situation fall below these levels, the decision to get health insurance is now up to you. There’s no tax incentive (more a stick than a carrot as far as incentives go in my mind) to sign up.

You still get the existing 30 per cent tax rebate. And every year over the age of 30 that you delay taking up private health insurance, your premiums will still go up by 2 per cent.

I’m one of those singles who is no longer impacted by the tax penalty.

An exodus of younger, largely healthy fund members (like me, well at least healthy if not younger these days!) between 485,000 and 750,000 are expected to leave the private health care system. This could of course increase costs to those members who are left behind.

Times are tough, interest rates are going up, petrol costs a fortune, it’s tempting to ditch that monthly charge to save some money.

For me though, the bottom line is not that I can't afford private cover but that I can't afford not to have it. I’m keeping my health insurance. It’s an investment in myself - just in case.

Why? If I happen to be diagnosed with something serious, the blowout in public hospital waiting lists means I might not get the treatment in time and I couldn't afford private treatment out of my own savings.

It’s not a fear thing, it’s just that I insure my car and my home contents against disaster, and don’t expect anything catastrophic to happen, why would I not apply the same reasoning to my own health and wellbeing. It’s got to be worth as much to me as my ‘stuff’.

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KFC Made Me Crash My Car

I worked back really late last night to get through some work I'd been pushing aside for too long, and then downloaded some Uni work.

I was really tired and decided to splurge on some KFC on my way home for dinner. So I popped home and got in the car and headed off to KFC. After picking up my food, I hopped back into the car to back out of the spot and head home.

I was absolutely convinced I was in reverse, I distinctly remember looking at the gear changer and everything, but my brain saw D and thought R. I was of course n drive and ran into a wooden retaining wall and rose bush.

I’m fine and the car itself is fine, but I’ll need to spend money getting the front bumper bar fixed, as it’s currently hanging off the front. Classy.

Serves me right buying take away food after a long day at work, I should have gone straight home and made something out of the pantry like a good debt dieter.

Home cooked meals would not have let this happen!

Car Guy is coming over this week to survey the damage, so I’ll know what to do next, but I’m not keen to drive it anywhere until it’s fixed.

I wonder how much that’s going to set me back, at least I have the cash available to pay for it, but man, just once I’d like to be able to leave it in the account for more than a month at a time!

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Gives With One Hand And Takes With The Other

Remember how happy I was when my bank increased the interest rate on my online savings account?

It was of course a glimmer of hope in sea of bad news about rising interest rates here in Australia. However, that bad news has caught up with me and the same bank has now increased the interest rate on my personal loan too. It was so great while it lasted those few heady days in February...

This of course increases my minimum monthly payment, which reduces my ability to save anything in that high interest savings account with all it's delightful extra interest rate!

My personal loan now has the second highest rate of all my debts, which at 14.2% is more than all my credit cards except one. (That one is both my highest interest rate and lowest balance, so it's my focus debt at the moment)

With that in mind, and a strong desire to achieve as many of my 2008 financial goals as possible I've decided to permanently increase the amount I’m paying off my loan each month. One my goals was to get my loan balance under $20,000. The minimum payment has jumped to just $4.00 less than I’m paying now (I was paying an extra $10-15 per month since the beginning) and won't come close to achieving that goal.

After crunching the numbers I’ll be increasing the loan payment to $700 ( was $570) per month from March. This means I can set it to be paid monthly, comfortable in the knowledge that I’ll easily meet one of my goals for the year. This change alone will save me over $1000 in interest over the term of the loan, even without taking my debt snowball and snowflaking into account. It will make a bit of a dent in my snowball amount, I still have one, it's just smaller for the credit cards.

How are your goals for 2008 tracking so far?

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I’m A Uni Student!

I’ve just completed enrolment for the next semester. I'm enrolled for two subjects, Marketing Theory and Practice, and Introduction to Management.

The subjects cost $710 each for the semester, so $1420.00, plus an additional $231.02 for the textbooks (including delivery). I’ll get 50% of this back from work as part of my paid education perk, and the rest once I complete the subjects with at least a pass grade.

I’m really looking forward to studying again. It’s been a while, and as the course is so targeted at what I’m doing at work, it’s going to be helpful as I learn, not at the end of it all. Not to mention it’s a great reason to be at home on the weekends studying, instead of going out and blowing all my money!

A question now. Is it ethical to sell on those textbooks at the end of the semester if work has actually paid for them, or not? What do you think? I believe I could get 75% of their value back from what I’ve seen around the University online forums.

I wonder if I should eat 2 minute noodles (ramen) every night as well, to experience the full student experience. ;-)

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When It Rains It Pours

After a full 24 hours of rain on Sunday I tuned on the TV last night to watch the new season show launches and after several loud cracks my TV died. Completely dead, the tube has gone. I didn’t get to watch a thing.

Assuming it’s the tube as (that’s where the sounds were coming from and it's gone black), is it worth fixing? Probably not. The TV is over 9 years old and had done me proud, so I wouldn’t think they even make parts for it any more?

So I need a new TV, and fast. It’s such a big part of my home entertainment, and has been free (other than electricity costs) up til now.

*sigh*

I have a hot lead on a new 40" LCD though; one of the guys at work used to work for Samsung and is still able to get them at cost. I’ll do some comparison shopping online today to see what the retail price is and how much I'd save that way. A shiny white one is so appealing after a lifetime of black or gray ones.

The other alternative would be to buy one second hand through the Trading Post or on EBay.

Any thoughts on how I should purchase my new TV?

Other than ‘with cash’ of course, that goes without saying! :-)

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Yet Another Reason Why An Emergency Fund Is A Good Idea

Tempt the fates with a bold statement for the New Year's financial plans and they mock you.

My car had started making a really loud and weird noise last week, so I took it in to the mechanic and they called to say they've found the problem. It’s the air compressor in the air conditioning unit. They can disable the air conditioning for me in the short term and use a new belt to work around it so the alternator will still charge the battery (I think I got that right?)

This will only cost around $35 including labour; however when they were testing it to locate the noise, they found the rear brakes were locking up. Further investigation found that one of the rear brake pads was installed backwards, which caused a high spot on the drum, so they need to machine the drum to correct it. So that’s an extra $70. Still OK so far.

Unfortunately the front shocks are very spongy (I had noticed this myself I confess), so they will need to be replaced which is $550.

So all up I’m looking at $655 to get it all fixed. I’m not prepared to mess about with this sort of repair and put my safety (and potentially others) at risk, so the snowball for January will be going on that, plus the $45 a month I’ve budgeted for car repairs and servicing which should just about cover it.

I’m so pleased I am able to pay in cash, it’s only a tiny thing in the scheme of things, but every time I don’t have to use a card is a step toward being free of them forever. Even if it means they only get minimum payments this month.

I've rebooked the car in for the service I'd actually taken it in for in the first place for next month, as that’s $220 and I don’t have it without relying on credit.

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No Luck With Citibank

I got a response on my application to switch my personal loan to Citibank. No go.

No reason given, but they did reassure me that my application won't impact my public credit rating (which I still haven't heard back about now I think of it).

So stuck with an ever increasing variable loan rate at St George for the time being.

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How Do You Pay Your Bills?

I pay all of mine by Bpay, on payday. I don’t have that many recurring bills:

• Electricity
• Home Phone
• Car Insurance
• Contents Insurance
• Heath Insurance

The Electricity and Home Phone are actually quarterly bills, but I divided the last bill by the number of pay periods before the next one and pay that amount each month. Then once the bill comes I just pay any extra that might be due before the due date and it’s all good.

The insurance bills are the same amount each month, and my car/contents don’t cost any extra to pay by the month which is handy.

The annual bills sneak up though, like my NRMA coverage which I've just paid. So I've now divided that by 12 and will pay that much each month into my new ‘bills’ account (renamed my ‘future car’ account for now) so I’ll be covered for next year.

I also need to work out my registration, green and pink slip amounts too so I can start putting money aside for them as they’ll come up again in May. I’ll obviously need to divide those by the remaining months between now and then so it doesn't hurt too much at the time!

I don’t know why, but I’m fascinated by how people manage their bills. There have been some great posts out there lately that I really enjoyed:

• JD at Get Rich Slowly has two posts outlining why you should or shouldn't prepay your bills.
• TV Girl and Money covers making all your bills ‘monthly’ regardless of how often they actually fall. It’s a great post about creating a budget all round really.
• Paid Twice had a nice surprise recently when she opened a bill and found (after the initial shock wore off) that the amount was a credit, not owing. Wouldn't that be nice?

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New Budget Mid Month Update

I've just started my second fortnight of the new budget I started in November. It’s worked a treat! I’m so proud of myself for sticking with it and being realistic enough with the numbers when I worked it all out in the first place.

There was a minor tweak to make ongoing though, not in the amounts but in the timings of regular automatic bill payments. As I’m moving to monthly pay in December, I really noticed the bills that are currently falling due before the 15th of the month and have arranged to have them all moved to the 16th or later to ensure I’ll always be paying them on time, and from my savings account.

As for my envelopes, they are fantastic. I have them to cover the irregular expenses that need cash over an automatic payment: Petrol, Public Transport, Food, Eating Out, and Personal. I ‘restocked’ them on Friday, and found that:

• Petrol - was untouched (but the car does need filling now)
• Public Transport, - all used and within budget
• Food – had $50 left over as have been away for work and have been very frugal the last 2 weeks). Also no big ticket grocery items, like shampoo etc.
• Eating Out – all used and Personal dipped into to supplement - need to watch this one more closely
• Personal – all used up

I loved that I could buy a few bottles of wine from the winery we visited on Friday (as part of my business trip last week - stunning place McLaren Vale) with no guilt as it was from my personal money to spend as I please.

I've transferred the 'leftover' money into my emergency fund instead of snowballing it off a credit card in light of the upcoming move.

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Should I Try And Move My Personal Loan?

I was looking at my HR site for more work benefits to take advantage of, and I've found one that I really think I should investigate further.

We have offers from Citibank called 'Citibank At Work' where we get discounted rates over and above those available to the general public. This one caught my attention:

Citibank Personal Credit

Consolidate your debts with a low 5.9% for life on balances you transfer and a great 12.99% p.a. ongoing interest on purchases and cash advances.

• $0 Transaction fees and ongoing fees
• 5.9% for life on balance transfers
• Low 12.99% p.a. ongoing
• Annual fee of $69

If I compare this to my current personal loan it seems like a really good deal, one that could save me over $3000 interest over the course of paying it off.

Current Loan

• $9 monthly ongoing fee = $108 per year
• 13.45% p.a. (variable)

I would of course actually have to get approved for the full remaining amount of my personal loan, and I have no idea how tough Citibank are, but I think it’s definitely something to look at.

It’s my largest single balance and will be the last debt I pay off, so if I can save interest accumulating along the way then that’s a good thing right?

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Getting Rid Of Over Limit/Late Fees For Good

One of the ways I’m still throwing good money after bad is through bank account and credit card fees. Especially those mind-blowingly expensive late and over limit charges.

For October 2007 alone I paid out $55 in over limit fees, plus $12 in transaction fees.

This is all on top of the $400+ in interest payments of course, and those charges will incur even more interest until I can get these cards paid off for good. This is a ridiculous and completely preventable situation for me to still be dealing with.

I’m making sure this ends now by getting all my cards back under their limits with my first pay yesterday, having all minimum payments, plus the $10 extra per month I pay on each, paid into them on or before November 16. Then the last pay on November 30 will work as a buffer going into December.

Blueprint For Financial Prosperity says I shouldn't be paying any fees on transaction accounts at all, so I’m also going to consider shopping around for a new everyday account. I need something with unlimited free online transactions though, as that’s how my payments and budget distributions are set up.

No Credit Needed has an excellent series on 33 Days and 33 Ways to Save Money and Reduce Debt, which got me thinking about how I too could work Eliminating Fees, which is day 1 of 33.

Found Money

In my further decluttering last night I found the wallet I use when I travel overseas, it's a great little thing as it's just big enough for my passport and has an over the shoulder strap, so I don't need to take a whole handbag with me.

Took a look inside - score! I found Yuan and Hong Kong dollars in there that I hadn't converted back into Aussie dollars from my last trip in June/July this year.

Quick online check of the exchange rates this morning and there's approx $165 I can put towards recouping my cleaning costs this week. Nice!