Making Cents by The Southland Times

www.southlandtimes.co.nz

Tuesday, June 1, 2010

y e n o M t e k poc Making Cents

Week 1

Riley’s cash

How do you get your money?

The Southland Times

The most common way is to earn it. You do some work and you get paid for it. Do chores around home and you’ll probably get pocket money. Or friends and family might give you some as a birthday present. Grown-ups go to work to get paid.

Riley Erskin e is 14 and li kes going to the movie Riley puts a s. He goes tra side $10 to b mping sch and campin uy lunch at ool two day g a lot and h s a w a e s e k and saves to use his mon other $10 ea the ey wisely to ch week for pay for w the things h s o m e t h a in n ts or spends g he e does. it on a T-sh Riley’s mum ir b t e a o n r ie a . and dad giv e him up to $20 a w He will ofte eek cash an n use the $2 d put another $20 0 a month t goes into his a week on h hat bank accoun is eftpos card each m t to see a movie or wil onth. They a l add it to h lso pay for his clothes, is savings fo school unifo something s r p rm ecial he wan and all the other usual ts to buy or d o . living expen ses. While his pa rents buy him the more expensive th ings like tra mping boot Riley would s, like to buy m ore things a well. s He plans to earn more m oney by babysitting for family f riends. He’ll offer to do this for fre e , “but I migh get a donat t ion’’.

Pocket money Many parents give their kids pocket money each week. The kids usually think it’s not enough but it adds up to a lot over a month or a year. If they pay you $5 a week, that’s $20 a month, or $260 a year. If you get $10 a week, that $40 a month, or $520 a year. Imagine how much you could buy if you had that much? Work out how much you get: Allowance x 4 = month total Allowance x 52 = year total

Which one are you? Some kids spend all their pocket money really fast. Some kids spend half of it and save the other half. Some kids save all their allowance until they have enough to buy something big. And some kids save it all up and hardly ever spend anything. Which one are you?

Budgeting

Think about something you really want to buy and how much it costs. Work out how long it would take to buy by saving all your allowance. How long would it take if you saved half your allowance? For example, if you get $5 a week and want to buy a PSP game costing $90, it will take about four months if you save all your allowance or nearly nine months saving half of it each week. This called doing a budget. If you really want something big and Mum and Dad can’t give you more pocket money, think about getting a part-time job. Like working in a supermarket after school or at weekends, sweeping up in a workshop or mowing lawns.

Bargaining What do you do to earn your allowance? Keep your room tidy, mow the lawns, wash the car, dry the dishes? If you want more allowance you could convince Mum and Dad to give you more. Do some extra stuff for a couple of weeks, like vacuuming or filling the coal bucket, and then ask for the pay rise. This is called negotiating or bargaining.

Money Talk

Saving It’s so easy to spend your money when you have it in your wallet and you see something you like. You could leave your wallet at home or you could put your allowance in a bank. Some parents pay pocket money straight into their kids’ bank accounts. When you see something you like, think hard about whether you really, really need it. You probably don’t and you’ll get by without it. Deciding not to spend your money is called saving.

Here are some special words people use when they talk about money.

Banks

has a special number that no one else can use.

Bank:

A place you can deposit your money for safe keeping. You can also borrow money from a bank.

Bank account: The place in the bank where your money is recorded. It

Income: What you earn, usually from working. Credit: A business lets you have the item or service now on credit and you pay later. Loan: Money someone else gives you to use. You have to pay it back and you usually pay interest as well.

Credit card: You use this to buy things but your money stays in your bank Savings: All the money you have put in your piggy bank or bank account. account until you pay off the credit card. The interest you have to pay on your credit card is usually about 20% if you don’t pay it off by the end of each month. Balance: The total in your bank account right now. card (sometimes called ATM or cashflow card): Used to get cash Interest: The amount a bank will pay you for keeping your money safe, or Eftpos from your bank account out of a money machine or to pay for things in a shop. what you pay for using the bank’s money. For example, 3% interest means they pay you $3 for every $100 in your account for a year, or you pay them $3 for every Debit card: Like an eftpos card, but can also be used for buying things

Banks help you keep money safe, and they even pay you to let them look after it. This is called earning interest. Your parents or caregivers can help you open a bank account. Help them check around so you don’t pay bank charges, there aren’t big fees every time you take money out and you get an eftpos (ATM) card if you want one.

Tax

$100 you owe them.

Bank fee: What you pay the bank for looking after your bank account. Overdraft: Spending more money than you have in your bank account

If you do have a bank account, make sure Mum and Dad get you a tax number and give it to the bank. This way the government will take less money out of your account when taxing the interest your money has earned, although you should get most of the tax back when you do a tax return each year.

puts you into overdraft (OD shows on your bank statement). You can do this only when the bank says it’s okay and they usually charge a fee.

Next week:

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over the phone or on the internet. The money comes out of your bank account straight away.

Tax:

Money the government takes off you each year. Most young people get this back if they are still at school.

Where does my Money Go?

It pays to belong!

As New Zealand’s only customer-owned bank, we’ve been committed to giving back to our customers and communities for more than 140 years. Established in 1869 as the Southland Building Society, we gained bank registration in October 2008 making us the only building society in the world to have achieved bank registration while maintaining our customer-owned structure - a great achievement for us and for Southland! Unlike many other banks, we don’t have to pay dividends to shareholders so our primary obligation is to share the results of our success with our customers.We do this by offering competitive rates, a wide range of savings products, community sponsorships and a host of customer benefits like discounted ticketing, preferential booking and our online customer-web community. As an organisation founded on a savings culture, we firmly believe that every bank has a responsibility to ensure our children and our communities understand the importance of saving and planning for the future, which is why we are delighted to come on board as the sponsor for The Southland Times Making Cents Campaign. At SBS Bank, we offer a wide range of savings products from everyday savings accounts to online accounts and term deposits.As part of this campaign we’ll be offering some great promotions on our wide range of savings products so come on in and meet the team at SBS Bank!

The coffee’s hot and we’d love to see you!

Cromwell: 21 The Mall. Phone (03) 445 0672

Invercargill: 51 Don Street. Phone (03) 211 0700 Windsor (North Invercargill): 54 Windsor Street. Phone (03) 211 0745 Gore: 80 Main Street. Phone (03) 209 0080 Tauranga

Hamilton

Invercargill

Windsor

0800 502 442 www.sbs.net.nz

Queenstown: 7 Shotover Street. Phone (03) 441 0033 Dunedin: Cnr George & Hanover Streets. Phone (03) 477 5100 Gore

Dunedin

Queenstown

Cromwell

Timaru

Christchurch

Papanui

Riccarton

Ferrymead

Nelson

Blenheim

Making Cents

? o y G e n o M

Week 2

y M s e o D e Wher

oney just seems to disappear, doesn’t it. Do you know where all yours goes? Most people don’t know. It can be interesting and scary to write a list of everything you’ve spent money on during the past week, or even the past month. Try it. Remember to write down everything, including stuff like cheese rolls for lunch, coffee, DVDs, Cokes, makeup, movies, PlayStation games, smokes, drinks, phone cards, bus or cab fares and even that sausage at the Warehouse. How does your total compare with the amount of money you got during the same week?

3.00

$32.00 When you’re working fulltime and still living at home, you might have to pay board. This is usually cheaper than flatting because it doesn’t cover the full cost of things like food, power and the internet. If you go flatting you’ll have to pay for rent, groceries and power, and possibly contents insurance,

5.00

If your share of the rent is $70 a week, you pay $50 for groceries and power is about $15 a week, that’s $135 for just the basics. Add at least $20 if you want extras such as Sky, phone line and maybe some wood or coal for the fire during winter.

Hang on,

it doesn’t end there. You’ll still want to go out with your mates, or get them round for PlayStation or to watch DVDs. That can easily blow $20 a night on a few Cokes or beers, a pizza and a game rental. Smoking two packets of cigarettes a week will add at least $20.

Sorry - because of a production error last week we probably confused you over the amount of pocket money Riley Erskine gets. He is paid $20 per week, and has $20 per month put into his eftpos account

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Lunch Mon Lunch Tues Lunch Wed Lunch Fri DVD rental Phone card Coke after rugby

1.80 2.30 2.50 3.20 5.00 15.00 3.00 $32.80

Rent $70 x 4 Power Groceries (4 weeks) Cellphone Petrol New jeans Alcohol Smokes McDonald’s PSP game

That will add to your costs every week with petrol, insurance, warrant of fitness and registration. Add at least $40. And some of you might be making repayments on things like a laptop, your car or that flat screen TV in your room.

Money can be one of the biggest problems in life, especially when you spend more than you earn. Saving is not very exciting but in the end it helps you get some of the things you really want.

Spending May

Got a car ?

All this can add up to about $250 a week. Seems a lot, but it’s really pretty cheap. Many young people will be paying a lot more, which means most of what they earn disappears every week on just basic stuff. There’s not much left for luxuries like clothes, makeup, shoes, new shocks for the car, a PSP, a big night out or a holiday. How do you pay for those things? The best way is to stop spending on the stuff that’s not essential and save for the things you really want. Grown-ups will tell you not to spend more than you earn or you’ll go into debt. It’s boring advice, but it’s good advice because you don’t want to owe people money.

$12

My spending last week

Income Tax

If you are working, even just part-time, some of your money disappears before it gets into your bank account. This is tax that goes to the government, maybe student loan repayments and Kiwisaver contributions.

Here’s some examples of how much tax someone under 16 might pay: Hourly rate A week Tax You get $8.00 $320 for 40hrs $50.71 $269.29 $9.00 $135 for 15hrs $19.57 $115.43

280 60 210 25 115 90 120 144 20 80 $1144

Here’s what the tax would be once you are working fulltime on minimum rates and more: Hourly rate A week Weekly tax You get $10.20 $408.00 ($21,216 yr) $70.95 $337.05 ($17,526) $12.75 $510.00 ($26,520) $94.41 $415.59 ($21,610) $13.46 $538.46 ($28,000) $100.58 $437.88 ($22,769) $14.42 $576.92 ($30,000) $109.59 $467.33 ($24,301) $15.38 $615.38 ($32,000) $118.56 $496.82 ($25,834) Paying tax is one of the hardest things to accept when you starting earning money. What’s left over after tax is yours to spend or save. It’s what you have to live on.

Next week:

How Do I Save ?

The Southland Times

www.southlandtimes.co.nz

Tuesday, June 15, 2010

Week 3

Making Cents

? y e n o M e v a S

I o D How

ost of the time you don’t get enough pocket money or wages from your job to buy everything you want. How do you get on if you want to buy a $149 cellphone but you get only $10 a week. Or a laptop for $1245 and you get $80 a week from your part-time job? You can borrow money from a bank or your parents, but that usually costs even more. The other way is to save up.

Saving is where you put some or all of your money in the bank or a money box each week and don’t spend it. It builds up until you have enough to buy the big things you want. If you have the right sort of bank account, you will get interest on your money sitting in there. Interest is what the bank pays you for letting someone else use the money before you want it back. If the interest rate is 3%, you’ll get $3 for every $100 you have in there for a year. That simple! If you usually spend all the money you earn, it will be a big effort to save. It’s like going on a diet. You’ll decide to do it but will probably see things you want and blow the programme by buying them. An easy way round this is to put the money where you can’t touch it, like a savings account that doesn’t have an ATM card. It will be easier if you save most of your money but keep a little bit each week for spending. Say you earn $60 a week - save $45 of it and keep the other $15 to spend on the stuff you really need. If you are one of those people who don’t spend any money, not even birthday money from your grandparents, you won’t have any problem saving up to buy the big things you want.

Some Tips

Robert ’s cash Robert McDonald already has five years of work experience, even though he’s only 15 years old. He has a pretty good income for his age because he works between 12 and 20 hours a week and makes $150 after tax. His parents own the Collingwood Food Centre in Invercargill and he works for them. They pay him the adult minimum wage of $12.75 an hour. He says he likes his part-time job because it puts money in his pocket each week and he is learning how to

When you see something to like, ask yourself if you want it or need it. If you don’t really need it, don’t buy it.

run a shop. Robert knows that earning money is important but it’s even more important not to spend it all. Spending less than you earn is the simple secret to having lots of money. He does spend some on things he wants, specially goggles and other stuff for swimming, which is his main passion. But it is the money he doesn’t spend that is quite interesting. He has been putting away some of his earnings every week for several years. It goes into a bank account that he can’t take money out of until a set time in the future. These accounts, sometimes called fixed-term deposits, pay a good interest rate, which means he’s earning more money without having to do anything. The longer Robert leaves the money in the bank, the bigger the balance will be. Some grown-ups have so much money in the bank earning interest they don’t need to go to work.

If you really need something, can you get it somewhere cheaper, like Trade Me or from a secondhand store? Haggle with the retailer to give it to you cheaper for cash. Shop around for cheaper deals. Do a budget to keep track of your spending. Check your savings regularly so you can see how well you’re doing. If you can, get another job to earn more money, at night or weekends.

Savings target What do you really want to spend your money on? New boots, an iPod, a puffer jacket, a new surf board, a car? Work out how much you need to save each week so you can buy them. That’s your savings target. Remember to be realistic. If you usually spend everything you earn, keep a little bit of money out each week to spend.

example

SUPER sECNRGOEOGE cHALL

Here’s an example of how do-it-yourself can save you money. Let’s say you buy two cheese rolls for morning tea each day. They cost $1.50 each. That’s $3 a day, $15 a week. If you pay $6.50 for a dozen cheese rolls from one of those fundraising projects, you’ll save $8.50 a week and still have two rolls left over. If you buy a loaf of bread for $2 and some cheese for $6 on special, you can make enough cheese rolls for two weeks for a total of $8. That’s only $4 a week, which means you’ll save $11 a week. (Just remember to put them in the freezer until you need them so they don’t go mouldy.) See how much you can save on cheese rolls alone with just a little bit of effort. You can use the same idea for sandwiches, pizzas, burgers.

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Double your Rewards with SBS Bank Open either a SBS Incentive Saver Account or a SBS Lite Account and you’ll get a $10.00 credit - open both and you’ll get a $20.00 credit! As part of The Southland Times Financial Literacy Campaign we’re committed to getting you on track to taking control of your money and saving for something special! We’re offering a $10 starting incentive on our SBS Incentive Saver (when you set up a regular monthly payment) and SBS Lite Accounts (available from June 21) for a limited time only so hurry! Just pop into any of our SBS Bank branches or call us on 0800 502 442 to find out how you can start taking advantage of these great offers straight away! The SBS Lite $5 monthly fee covers all electronic transactions only. Additional fees and charges may apply. For a full list of additional fees and charges, call into any branch of SBS Bank, phone us on 0800 502 442 or visit www.sbs.net.nz.This promotion is available for a limited time only and can be withdrawn at the discretion if SBS Bank. $10 credits will be paid prior to the end of each calendar month. A $10 fee will be charged if the account is closed within 12 months of opening. Our normal account opening criteria and terms and conditions apply. A copy of the current Investment Statement and Disclosure Statements are available on request and free of charge from any branch or agency of the Southland Building Society (SBS) or

The Southland Times is looking for people to send in their bright ideas for saving money to be used in the July 13 edition of the `Making Cents’ series. It doesn’t matter what your idea is, if it works we want to know about it so that everyone can benefit. Send your tips to news@stl.co.nz or to `Making Cents’ The Southland Times 67 Esk Street, PO Box 805 Invercargill.

Next week:

Doing a budget

SBS Incentive Saver - Earn up to 3.50% interest p.a on your savings!*

14 Tuesday, June 22, 2010

www.southlandtimes.co.nz

Making Cents

What’s a budget?

The Southland Times

Week 4

T E G D U G N A I b o d

budget means working out what you want to spend and how much you earn, or how much you need. The Finance Minister does a budget for the country every year so the Government knows what it has got to spend and where that money is coming from. A chief executive will do the same thing for their business. A principal will do a budget for the school, including things like maintenance on buildings, cleaning, lawn mowing, new library books and more support staff. Parents usually do a budget for running the house, although they might not write it down. They will know when the rent or the rates have to be paid, the power bill, the insurance, school fees, car registration, and roughly how much they can spend on groceries each week. They will also work out that if they save a little extra for a couple of weeks, they might be able to take everyone to Queenstown for a weekend, or go to Lone Star for your birthday.

$12

BUDGET FOR MONT H

Earnings Part-time job $115.43 x 4 = $461.7 2 Savings target PS3 120GB console =

$575

Save $50 a week = $2 00 a month

oing a budget makes it easy to remember what you spend your money on, and how much you are saving. It will also show the things you want to buy, the things you are saving for, and how much you need to save.

Buy PS3 in less than 3 months Still have $65 a week to spend Spending Petrol $113.50 $100 save 13.50 Jeans 79.99 save 80.00 Lunches 75.00 $25 save 50.00 Fast food 32.00 Rugby shorts 24.99 save 25.00 Phone card 20.00 Books x 2 75.00 $48 save 27.00 Movies & Cokes 30.00 $20 save 10.00 PSP game rent 5.00 save 5.00 Chips 3.00 Rafﬂe ticket 2.00 save 2.00 $460.48 $248.00

For a simple budget, draw a line down the middle of a page. On one side write all your income for four weeks, your allowance or wages from your job, maybe even the birthday money from your grandparents. Remember not to include any tax you pay. Write down the amount you get in your hand or in the bank after tax has been taken off. On the other side, write everything you spend your money on during the same four weeks. Hopefully you spend less than your earn, so you will be in credit and saving each month. ow much have you got in your bank account or money box? What do you want to buy and how much will it cost? Work out how much more you need to save: Cost $200 Savings $80

Need to save $120

oing the income list is usually pretty easy. Work it out for a week and multiply that by four to give you a month. In week 2, we looked at your spending. That will help you this week when you do the spending part of your budget. Be as exact as you can. Bank statements can be helpful to show where you have used your eftpos-ATM card.

$212.50 BANK THIS!

n the spending side of your budget, write down everything you really have to pay: rent, power, car payments, food. Then everything you should pay for: insurance, work clothes, KiwiSaver, extra heating in winter. And finally the non-essential stuff such as petrol, beer, smokes, movie tickets, fast food and new DVDs. If you earn more in a month than you spend, you’re doing really well. You’re probably already saving money in the bank.

f you’re spending more than you earn, this is where you have to make some decisions. You have to try to spend less than you earn. On the spending list, cross off the things you can do without, or reduce the amount you are spending on them. Work out how much “fun money” you can afford each month, or each week. Do you really need Hell’s pizza three times a week when you can save a few dollars each time by buying pizza from the supermarket. instead of buying your usual brand of beer, try a cheaper brew or hunt around for the specials. Try cutting back to two packets of smokes a week. Make your own sandwiches or cheese rolls for lunch rather than buying them every day.

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Remember It’s impossible to stop spending money. You have to live somewhere, stay warm and eat. It’s reasonably easy to cut back on the “luxuries’’. They make life more pleasant but you won’t really suffer by giving them up or at least cutting back.

SUPER sECNRGOEOGE cHALL The Southland Times is looking for people to send in their bright ideas for saving money to be used in the July 13 edition of the `Making Cents’ series. It doesn’t matter what your idea is, if it works we want to know about it so that everyone can benefit. Send your tips to news@stl.co.nz or to `Making Cents’ The Southland Times 67 Esk Street, PO Box 805 Invercargill.

Next week:

Banks

14 Tuesday, June 29, 2010

www.southlandtimes.co.nz

Making Cents

What is a bank?

bank is a business, yes, a business where people go to deposit and borrow money. That’s about a simple as it gets. Everything else a bank does is based on those two things.

s k n a b

The Southland Times

Week 5 You can save your allowance under the mattress, in your wallet or in a money box. Is it really safe there? You might be tempted to spend it, or someone in your family might borrow it, or you might lose it. The safest place to keep your money is usually a bank.

11 June 2010

B J Smith 09 4231 005963714 00

he main reasons people put money in the bank is to earn more money and to keep it safe. There are all sorts of rules and regulations about the way banks have to operate to keep your money safe.

Date

Transaction

30-April-2010

BALANCE

If you use a money box, keep a list of everything you put in, and subtract everything you take out. This way you know exactly how much should be in there, which is called the balance.

04-May-2010

DEPOSIT

$50

11-May-2010

DEPOSIT

$53

$103

18-May-2010

DEPOSIT

$50

$153

20-May-2010

DEPOSIT

$10

$163

21-May-2010

Withdrawal ATM

25-May-2010

DEPOSIT

$50

$193

01-June-2010

DEPOSIT

$50

$243

01-June-2010

DEPOSIT

$50

$293

09-June-2010

Withdrawal cash

11-June-2010

BALANCE

If you have a bank account you will get a special book or a piece of paper called a statement that shows the same information, or you can check your balance on the bank website. Your bank account will have your name on it and a special series of numbers no one else can use. The bank uses your money and combines it with money from a whole lot of other people (called depositors) then lends it to someone (a borrower). The borrower pays interest, which is the cost of using the money. Interest payments on a loan might be 8%, while interest on a deposit might be 3%. So the borrower pays $8 on every $100 they get from the bank for a particular time, while you get $3 for every $100 you deposit. The bank keeps the other $5 from the borrower, which is its share for managing the whole deal. It also charges fees on loans and for running most bank accounts.

Debit

Credit

Balance $0

$20

$143

$100

$193 $193

Remember that a bank is a business. It doesn’t sell things like a shop, but it earns money by managing money for other people. It has shareholders and they expect something back for owning the bank. So the bank has to make a profit to pay its shareholders. The profit comes from the bank earning more money than it spends on things like rent, staff wages, advertising and other running costs.

You can have different sorts of bank accounts, including: an ordinary account, which might have an eftpos (or ATM or cashflow) card so you can withdraw money easily. The money sitting in these accounts usually earns very little interest. a savings account, where it’s harder to get the money out and you may pay a fee for every withdrawal. The good thing is that the interest rate is usually higher. if you have quite a lot of money, you can put this in an investment fund. There can be a risk with this and you get to choose whether you want to take a low risk (and a lower interest rate) or a high risk (with a higher interest rate). loan accounts, where the bank lets you have money to spend on big things like a car, a house or an overseas holiday. You usually pay special fees to set up the loan, a higher interest rate and you have to repay some of the money at least once a month. credit cards, where the bank lets you buy things without paying for them until the end of the month. If you don’t pay the full amount, you pay a much higher interest rate than for an ordinary loan.

Remember T

he bank is not there to be your friend. It will be nice to you to get your business. Some banks offer good deals like no bank fees or free money boxes to attract children as new customers. They hope that once you are a customer you will stay with that bank for a long time. When you are a grown-up, you’ll want to borrow and they’ll make money from you then. So check around when you want to open a bank

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SUPER sCROOGE cHALLENGE account. See which banks are offering the best interest on deposits, which ones charge the least (or no) fees, maybe which ones will be the best when you are a student or a young adult and you want to buy a car or a house. The main banks in New Zealand are SBS Bank, ANZ, ASB, BNZ, Kiwibank, National Bank, TSB, Westpac. Organisations such as credit unions and PSIS also operate like a bank.

Next week:

Finding a Job

14 Tuesday, July 6, 2010

www.southlandtimes.co.nz

Making Cents

Week 6

b o a g j n i d n i F

s there any point doing a budget if you don’t earn any money? Of course there is - the less money you have, the more careful you have to be with it. The more money you need (not want) to spend, the more you will need to earn. The best way of earning more, and saving, is to get a job. Even just a few hours a week will earn you $30 or $40.

The Southland Times

Jeremy Smithers The Manager Big Burger 23 Fleet St

What job can you do?

Invercargill

Some things to consider when you decide it’s time to get a job: • how many hours do I want to work each week? • what other commitments do I have to fit in, like school, sports, clubs, study? • what skills do I have that will be useful for a job? • how much do I want to earn? Don’t be half-hearted about finding a job. Once you need a job, you should be prepared to try anything. Keep in mind that getting a good reference from the boss at your afterschool job will help you get a fulltime job.

2 July, 2010

Dear Mr Smithers I am applying for a part-time job at your burger outlet in Invercargill. I am a Year 12 student at Invercargill College and want a job working after school, at weekends and during school holidays. I can start work after 4pm on week days and any time on Saturday and Sunday, although I sometimes play tennis on Saturday afternoons during summer. I am studying economics and food technology this year, which I think will be helpful to me in your business. This is the ﬁrst time I have applied for a part-time job so I can’t give you any work references, but my CV includes some from people who know me well. I would be available any time after school to meet you for an interview. My contact details are in my CV. I am an honest and reliable person and I would work very hard in any area of your burger business.

How do you find a job: • Look in the job ads in the newspaper, on websites such as southlandjobstoday.com and Trade Me, supermarket noticeboards. • Check with Work and Income. • School careers advisers sometimes know about job vacancies. • Put flyers in letterboxes or send them to businesses. • Visit business owners and managers at work. Take a letter of introduction and your CV to places you think you could work - supermarkets, fast food places, shops, factories, engineering companies, hairdressers and offices. If they are not hiring at the moment, leave your letter and CV and ask them to consider you when they do want someone. • Your parents may know someone who is looking for a new worker, or who knows where there is a vacancy.

How to apply for the job: • Create a CV. (This stands for curriculum vitae, a Latin expression that means “course of life’’.) It sets out who you are, your qualifications and your skills. • Ask teachers, people you have already worked for, or who know you well, to write a reference for you. Include this in your CV. • Write an application letter. This should say who you are, what sort of job you want, when you will be free to work and how they can get in touch with you for an interview, or just to have a chat about a job. • Writing the letter by hand can be a good way to show the manager how tidy and careful you can be. • Don’t include anything in your CV or letter that isn’t true. • Send all this information to the business, or take it with you when you go to see the owner or manager.

Yours sincerely, Robyn Twenty

Helpful

Websites

• careers.govt.nz • workandincome.govt • cvwriting.net Or Google ``how to write a cv’’

What to do Things to remember when you go to introduce yourself, or go for an interview: • Dress in clothes that are neat and clean. • If you have arranged a time, be there 5 or 10 minutes early. • Be friendly and polite. • Speak clearly and don’t swear. • More than anything, work really hard at making a good impression.

Blake’s Job

Now you have a job

Keep these things in mind: • Turn up at the right place at the right time. • Be ready to work hard. • Make sure you know what you have to do and follow instructions. • Use your initiative once you’ve finished your assigned jobs, ask for more work or just grab a duster or a broom and do some cleaning. • Be positive about your work. • Be friendly and helpful to customers and the people you work with. • Talk to you boss or manager about any problems. • Ask them for feedback on how you’re doing and what you could do differently.

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lake Molloy is 15-years-old and as well as being a Year 11 student at James Hargest College he works at Pak N Save in Invercargill. Blake works about 10 hours a week over two five-hour shifts - one during the week and one on the weekend. He puts groceries on the shelves or helps at the checkouts. He got the job because he wanted some work experience “and money is always good’’.

His boss, Pak N Save owner-operator Bryan Dobson, says he is always looking for young people who “know what they are trying to achieve in life’’ and a smile always helps too. They have a policy to make sure students are not working too much and still have enough time to do their homework and pursue their hobbies. They also give away two $2000 scholarships every year to part-timers who have done well while at Pak N Save and are now moving on to pursue further training in their chosen career.

Next week:

SUPER sCROOGE cHALLENGE The Southland Times is looking for people to send in their bright ideas for saving money to be used in the July 13 edition of the `Making Cents’ series. It doesn’t matter what your idea is, if it works we want to know about it so that everyone can benefit. Send your tips to news@stl.co.nz or to `Making Cents’ The Southland Times 67 Esk Street, PO Box 805 Invercargill.

Tips for Saving Money

The Southland Times

www.southlandtimes.co.nz

Tuesday, July 13, 2010

Making Cents

ere are some ideas, including a lot sent in by readers, for keeping money in your pocket and the bank.

Tips for y e n o M g Savin

Week 7

Eat in rather than out • • • • • • • • • • • • • • •

This is a huge area where you can save money. A cup of coffee taken out could easily cost you TWENTY times (or more) what it would cost you to make it at home. So think before you drink when you are out. Eating is the same. Fast food restaurants are counting on you eating food that you perhaps don’t really need at that time but buy just because it is quick. Why not wait until you get home and have a more nutritious meal and save money at the same time.

If you haven’t got the cash for something, don’t buy it. Pay off your credit card every month. Save something every pay, even if it’s only $5. Use layby rather than HP. Buy only one thing on credit at a time. Pay it off in full before you buy something else. When you have something on buy-now, pay-later, pay it off before any interest is added. Save up before buying birthday and Christmas presents rather than pay them off later. Have a list when you go Christmas shopping and stick to it. Set a spending limit for each person on the list. Start your Christmas and birthday shopping early and look around for sales and special deals. Get your family together and agree on a spending limit, such as no presents over $15, or combine funds to buy one bigger present for each person. Never go to the supermarket hungry -- you’ll buy more than you need. Shop around for a good deal. Haggle or bargain with the store for a good deal, especially if you’re paying cash. Buy second-hand or on Trade Me. If you see something you like but you’re not sure whether you should buy it, walk away and think about it for at least two hours. Make a list of reasons you should buy it and reasons against, then decide which reasons are stronger.

Make your own Make your own gifts instead of buying stuff from the store. You can make food mixes, candles, bread, cookies, soap and all kinds of other things at home quite easily and inexpensively. These make great gifts for others because they involve your home-made touch, plus quite often they’re consumable, meaning they don’t wind up filling someone’s closet with junk. Even better – include a personal handwritten note with the gift. This will make it even more special than anything you could possibly buy, plus it saves you money.

Buy video games that have a lot of replay value – and don’t acquire new ones until you’ve mastered what you have. Focus on games that can be played over and over again, and work on mastering the games that you buy. Good choices include puzzle games and long, involved quest games – they maximize the value of your gaming dollar.

Grow your own

Use less makeup

If you can grow your own fruit and vegetables then you should give it a try because you can benefit from delicious organic produce and save money. Many people start out using this as one of their favourite strategies to save money.

Don’t use makeup at least two days a week and you will save over 25% on make up costs.

Second-hand Don’t be afraid to investigate the savings you can reap from buying previously owned goods you can pick up great deals if you are prepared to spend the time searching.

Write a list before you go shopping Never go into a store without a good idea of what you will be buying while in there. Make a careful plan of what you’ll buy before you go, then stick strictly. Don’t put anything in the basket that’s not on the list, no matter how tempting, and you’ll come out of the store saving a bundle.

Don’t go to stores for entertainment Doing so is just an encouragement to spend money you don’t really have on stuff you don’t really need. Instead, find other places to entertain yourself – the park, the basketball court, a museum, a friend’s house, or even in your own home. Don’t substitute shopping for entertainment and you’ll be way better off.

Go through your clothes If you have a regular urge to buy clothes, go through everything that you have and see what you might find. Take the clothes at the back of the closet and bring them to the front and suddenly your wardrobe will feel completely different. Take the clothes buried in your dresser and pull them to the top. You’ll feel like a brand new person who doesn’t need to spend money on clothes right now.

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Rent library books Why pay $30 for a book you will read only once? - Rent books from the library and save money.

Remember Don’t beat yourself up when you make a mistake. Even if you make 10 good choices, it’s easy to beat yourself up and feel like a failure over one bad choice. If you make a big mistake and realise it, think about why you realised it now instead of then, and try to apply that later on. The memory of that mistake can end up being very valuable, indeed.

Turn off the television

Leave your money at home Don’t take your wallet or purse with you when you go window shopping. At worst take a few dollars with you but leave the plastic at home.

Always keep looking ahead. Don’t let the financial mistakes of your past drag you down into more mistakes. Look ahead to the future. The choices you make now won’t affect the past – but they definitely will affect the future. Think back, and remember how the bad choices you made earlier are costing you now, and constantly remember to not make those mistakes again.

Next week:

One big way to save money is to watch less television. There are a lot of financial benefits to this: less exposure to guilt-inducing ads, more time to focus on other things in life, less electrical use, and so on. It’s great to unwind in the evening, but seek another hobby to do that.

Helpful

Websites

• sorted.org.nz • Talking Money Sence

http://tvnz.co.nz/money-sense

• Or Google ``Tips for Saving Money’’

Credit

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Making Cents

Types of credit • personal loans: a loan to you from a lender, usually a medium-sized amount. • retail loans: like a buy-now, pay-later deal where you get the item and repay the business in monthly instalments. • credit cards: a bank card used to buy things and you repay the bank later. There will be a set maximum you can spend and the interest will be quite high if you don’t pay the whole balance at the end of the month. • store cards: like a credit card but for just one shop, like a Smiths card or a Farmers card. • mortgages: much bigger loans, mostly from a bank to buy a house, usually repaid over a longer time such as 25 or even 40 years. The lender can sell the house if you don’t repay the loan.

t i d e r

Week 8 What is credit?

A bank or another person gives you credit when they let you use their money to buy things. They are the lender or the creditor. You are the borrower or the debtor. You have to repay the money in instalments, such as every week or every month until it is all paid back, or in one big amount at the end of the loan. Your parents or a really good friend might give you a cost-free loan, so all you have to do is pay back the amount you borrowed. Banks and other business lenders charge you for letting you use their money. This is called the cost of credit.

Helpfutlion

Informa

Some special terms about credit The cost of credit This is the extra amount you pay the lender to use their money: • interest: the main cost, based on a percentage of the loan. • loan fees: the charge for organising the loan. • other costs such as administration fees for updating or changing the loan. • repayment insurance: to repay the lender if you can’t.

Credit: A business lets you have the item or service now on credit and you pay later. Loan:

added.

Money someone else lets you have to use. You have to pay it back, usually with interest

Overdraft: Spending more money than you have in your bank account puts you into overdraft (OD shows on your bank statement). You can do this only when the bank says it’s okay and they usually charge a fee.

Hidden costs

Interest:

Check for hidden costs by doing the maths. If you sign up to buy a $1200 laptop and the repayments are $30 a week for 50 weeks, you’ll end up paying $1500. Where does that extra $300 go? Look around for a better deal.

The amount a bank will pay you for keeping your money safe, or what you pay for using the bank’s money. For example, 3% interest means they pay you $3 for every $100 in your account for a year, or you pay them $3 for every $100 you owe them.

Mortgage: a large loan used to buy a house. Security: something of yours the lender can sell if you don’t repay the loan. It has to be at least the same value of the loan, like the house you have bought.

Guarantor: a person, such as your parents, who will sign a loan agreement to say they will make

Credit rating

sure you repay the loan, or they will pay it.

Application: The paperwork you fill out when you go to a bank to ask for a loan. Credit card: You use this to buy things but your money stays in your bank account until

Banks and other companies gather information on your spending and how good you are at saving and repaying debt. This is called your credit rating.

you pay off the credit card. The interest on credit cards is usually about 20% if you don’t pay it off by the end of each month.

You might have trouble getting credit, specially a big loan, if you’ve been slow to repay a loan before or if you already have several other loans.

Debit card: A card you can use to buy things over the phone or on the internet. The money comes out of your bank account straight away.

Credit cards It can be very easy to get into debt using a credit card if you’re not careful. You can keep buying stuff using the card without having the money. You might even ignore the statements when they come in the mail, until someone from the credit card company arrives to take some of your stuff away to sell to get their money back.

Helpful

The bank will give you a credit card if they think you earn enough money and you can repay the balance. They will give you a limit of, say, $1000. Sometimes banks will increase your limit even when you don’t ask. It’s best to turn this down unless you’re really sure you can use it carefully and repay it all within a month or two. A bank might even send you a credit card with you asking. Do you really need it? Banks usually make a good profit from credit cards so they are keen for people to use them. A credit card is really useful sometimes, like when you’re going overseas and don’t want to carry lots of cash, but you have to remember to pay off the balance quickly.

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Websites

Helpful Info Websites for most banks and some other organisations have special calculators that help you work out how much a loan will cost by the time you repay everything. All you need to know is the total amount borrowed, the interest rate, how long you will have the loan and any other costs.

Next week:

• sorted.org.nz • guide2.co.nz • aa.co.nz • money.msn.co.nz

Buying Big items

raa

s m e t I g i B Buying

Making Cents

Week 9

What is the best way to buy expensive things such as a car, a laptop, a PS3 or a widescreen TV? Sometimes the things you really want to buy are expensive. Very expensive. You either have to save up for months, even years, or you have to borrow the money.

SALE $

The Options

sale

Save up and pay cash

Advantages: • money will earn interest while you are saving. • don’t have to borrow anything. • should be able to bargain with the seller for a cheaper price. • price might come down while you are saving. • might get it even cheaper on Trade Me. • can stop saving for a month or a week if you have to. Disadvantages: • can take a long time to save. • can’t get the goods until you hand over the cash. • price might go up while you’re saving, or the new model might be more expensive.

Layby

$ $$

The shop puts the goods you want in storage while you pay the price in regular instalments.

Advantages: • don’t have to borrow anything. • usually pay the cash price with no interest or loan fees. • might be able to change your mind about buying it before the last payment and get your money back. • shop might let you stop payments for a couple of weeks if you run short of cash. Disadvantages • can’t get the items until you make the last payment. • can take quite a long time to pay off. • goods might go on sale, so you’ll have to bargain to try to get it at sale price.

Credit card

Advantages: • get the item straight away. • almost like cash so the seller might give you a special deal. • it’s a loan without having to make special applications every time you want some money. • have up to four weeks to save to pay off the credit card. • virtually no extra cost if you pay the balance at the end of the month. Disadvantages • have to pay the balance in full or you’ll start paying interest. • interest on credit cards is about 20 per cent, and it keeps building quickly. That can make the item quite expensive in the long run. • easy to forget how much you’re spending on your credit card.

Store deal

Attractive deals such as: no deposit, no repayments for 12 months, no interest for 18 months. Sometimes called hire purchase. Advantages: • get the goods straight away. • get to save up to pay for the item while you’re using it. • pay only the ticket price if you pay in full before any interest is added. Disadvantages: • can be hidden costs such as application fees and insurance. • interest can be a little higher. • you might forget and end up trying to repay several of these deals at once.

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Loan

free

$ $

$ $ $$

$ $$

BUY $

BUY NOW

$ $$

layBy y a p $

r e t a l Next week:

Usually for bigger amounts, such as a car, a house or to buy a business. Advantages: • safe way to pay for expensive things that would take too long to save for. • have plenty of time to repay the loan. • know from the start how much it will cost to repay. • can sell the thing and use that money to repay the loan. • repayment insurance means the loan will be paid if you get sick or have an accident and can’t keep working. Disadvantages: • interest over a long period makes the final repayment a lot more than the cash price. • there are other costs such as application and administration fees and insurance. • lender might want you to have a deposit of, say, 10% of the cash price, which would be $15,000 for a $150,000 house. • some banks might charge a fee if you sell the house or car and pay off the loan early. • payments usually every two or four weeks and you’ll pay an extra fee if you miss any.

Values Some things, such as land and buildings, increase in value over time. That means you should get more than you paid when you sell them. You’ll make a profit. Many other things - cars, motorbikes, household stuff, machines and tools are usually worth less after a year or two than when you bought them. You will probably lose money when you sell, specially if the car loses value faster than you can repay the loan. That’s called a loss.

Consumer protection The Government makes rules, called laws, that businesses have to follow to make sure customers get a good deal. For example, the item has to do everything the seller claims, it has to be covered by a guarantee for a certain time and there is a cooling-off period -- a couple of days when you’re allowed to change your mind and the store has to take the item back. It also has laws covering credit and loan contracts, and what a lender can take off you to sell if you don’t repay a loan. The Ministry of Consumer Affairs is the best place to go if you need advice on this sort of thing.

www.consumeraffairs.govt.nz

Hidden costs Remember to ask about hidden or added costs when you are applying for a loan. The lender has to tell you these things and should be able to tell you how much you will pay in total under the loan agreement.

Age limits Kids under 18 can apply to borrow money or buy things on credit, but the seller will want to make sure you can repay the loan and will probably ask for your parents to guarantee the loan, meaning they will repay it if you can’t.

The cost of tertiary education

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Making Cents

Week 10

n o i t a c u d y ertiar

It’s a big decision whether to go on to tertiary education after secondary school. This is where you study for a career such as teaching, law, plumbing, accountancy or physiotherapy. It will take at least three years and it will be expensive. School is free but you have to pay to go to university or polytechnic (except the Southern Institute of Technology, where most course costs are free). University courses are about $5000 a year, sometimes a lot more for courses such as engineering or medicine. There are also registration and student fees that can add up to nearly $1000 a year. The other big cost is living in a hostel or a flat, and paying for your ownfood and electricity. And your social life. Added up, it will cost about $20,000 a year at university.

How to Ptahyis?

For all

• A holiday or weekend job during school. • A bursary or scholarship. • Work for a year or two after school and save like mad. • Work part-time while you study. • Study part-time while you work. • Student allowance. • Student loan.

Here are some course costs to give you an idea: (2010 costs) University degrees per year

Student allowance

• Arts (Otago, 3 years) $4347 • Commerce (Otago, 3 years) $4150 • Fine arts (Auckland, 4 years) $5194 • Engineering (Auckland, 4 years) $6005 • Health science (Otago, introductory year) $6005 • Law (Otago, 4 years) $4849 • Medicine (Otago, 6 years) $11,546 • Music (Otago, 4 years) $5194 • Physical education (Otago, 4 years) $6005 • Teaching (Otago, 3 years) $4150

You can get up to $161.76 a week on a student allowance. The more your parents earn over $53,000, the less you can get. You can also earn $195 a week before tax and get the maximum. The allowance is usually for living costs, like the hostel or a flat. You will still need about $4000 at the start of the year to pay the first instalment for a hostel.

Student loans

You apply for a loan to pay your course costs (and living costs if you can’t get an allowance). You have to pay the loan back once you have a job. You don’t pay interest on the loans if you stay in New Zealand.

Other courses

• Hospitality (Wellington Polytechnic, 3 years) $4957 • Exercise science (Weltech, 1 year) $5036 • Business administration (Weltech, 19 weeks) $2434 • Hairdressing (Weltech, 1 year) $5845 • Mechanical engineering (Weltech, 2 years) $4934 The cheapest way to live is to stay at home with Mum and Dad. If you have to leave town, or want to move out, it will cost you a lot more. Private boarding will cost about $160 a week, which should cover rent, food, phone, internet and power. Staying in a hall of residence is the most expensive, although the hostels are usually close to university, you don’t have to cook and clean and it’s a great way to meet people. After the first year most people get a bunch of friends together and find a flat, sharing the cost of food, rent, power and internet. Choose your flatmates carefully. They need to be honest and reliable. You don’t want to do all the cooking and cleaning or pay more than your share. Halls of residence at Dunedin, Christchurch and Auckland are all about $11,000 to $13,000 for the year. Fees can be cheaper if the hostel doesn’t provide lunch or for a shared room.

Renting costs:

Average rent per room (3-bedroom house) in: Invercargill $93, Dunedin $103, Christchurch $105, Wellington $153, Palmerston North $90, Auckland $165. Add per week: power $15, groceries $60, phone-internet $10. Also weekly costs such as takeaways $15, clothes $15, socialising $34, cellphone $7.50, toiletries $8.50. Check out the budget calculators at www.sorted.org.nz for a better idea of costs.

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Use the calculators at www.studylink.govt.nz to work out how much you will need and what you can get from an allowance or a loan.

Dana’s Story Dana Campbell has spent the past three years at Otago Polytechnic studying to be an occupational therapist.

She saved hard while she was still at high school and that paid for a car and to top up her living costs. Because her parents’ combined income was too high she did not qualify for a student allowance so she had to borrow from the student loans scheme to meet a lot of her living costs. She is now working as an occupational therapist part-time at Southland Hospital while she completes her honours year by correspondence. Despite saving and being very frugal with her

money she still has a $40,000 student loan that she must pay off. She said her parents taught her not to spend what you don’t have and avoid buying things on hire purchase. They also helped pay her living costs in her third year so she did not have to work as well. In her first year in Dunedin she boarded and paid $185 a week. In her second year she flatted in “studentville’’. That was expensive (and cold in the winter) but at least she did not have to pay much for petrol.

Next week:

In the third year she shared a house with other flatmates and that worked out to be the cheapest option even though she spent more on petrol. She says money is a “constant stress’’ for most students but she managed to limit her living costs and personal expenditure to $200-$250 a week by being very careful with her money. She said studying fulltime in Dunedin was “just a really good all-round experience’’ and she enjoyed the student life and the people. She is now doing the job she loves and feels “really good’’ about it.

Saving schemes and mortgages