$500 in 5 minutes (here's how)

A 5m 19s phone call to my bank earnt me an extra $497.73

Term deposits can be a good way to save. They often pay more than saving accounts if you are able, and willing, to lock away money for a fixed amount of time.

Specials

Most banks will have a 'special offer' on one of their term deposit rates. For example the 7-month term deposit might have a far better rate than most other lengths. Seems like a good deal.

The Catch

At the end of 7 months the default option is to re-invest for another 7 months. But hang on - what if the 7 months rate is now terrible and the 9 months rate is really good? Doesn't matter. The default will be to invest for 7 months at the new terrible rate.

It's a bit like the lazy tax I mentioned before.

Big money for little work

When your term deposit comes due, take notice. Check out the interest rates for different term lengths - if term deposits are still your preferred option. A branch visit or a phone call is enough to switch you to the term deposit length that now has the best deal.

At the moment the difference can be as much as 0.65% - even just between a 5 and 7 month term. If you've got $40,000 saved, that's an easy $260 difference each year.

After my phone call I'll now make an extra $497.73 this year.

Why I'm talking finance

Money is the key to living a simpler more meaningful life. Working part-time I've had so many people say they wish they could do the same but can't afford it.

Smarter spending and investing wisely can give you freedom and options. You can choose a job you love rather be forced into one for money. You can find yourself out of work for a while and still be OK. If you want to retire earlier than the government pension age you can do so. If you want to work part-time or have time off between jobs you can do that too.

That's why I'm doing a few finance-related posts this year. Subscribe at the top of the page to be alerted to new posts.

Comments

How to waste a year's wages

A friend recently asked me why it is that so many people (on good incomes) are struggling to save. Often the big three money areas are housing, transport and food. In one sense these are necessary items. But what we spend on them is often way more than necessary. I crunched some numbers on how much extra my wife and I could spend on these things - if for some reason we wanted to burn our money. 1. Housing Our apartment is fairly nice, but also cost-effective. I've mentioned how choosing it saves us $1,800 per year , compared to a similar one we saw. The high end of 2-bedroom apartments in our suburb is $305 per week more than our apartment. Not $305 per week. $305 per week more than ours is. I cannot get over that. Sure it's new and modern-looking, but that's a lot of money. It's an extra $15,860 per year above what we pay. 2. Transport The Australian Automobile Association lists the costs of owning and running a car. It includes many often-overlooked c...

Colour me happy

One of the great things about reducing possessions is thing called 'helper's high' . It's that fuzzy feeling you get from helping someone else out. I got one recently by helping an old man lift heavy groceries into his car boot when he was struggling. But this is not about that. I was about to put some watercolour paints online for anyone who wanted them. Then I remembered a local community group where people do art therapy. I gave the paints to a contact who passed them on to the group. The next day my contact called me to say how much they were appreciated. One of the participants wanted to do some watercolour painting, but couldn't afford the paints. When my contact walked in with free paints the participant was overjoyed to be able to do her art. As far as 'helper's highs' go, this was a slightly removed one - I never met the actual person I helped. But still it was a buzz.

The real cost of owning a car

It's been about 10 years since I've owned a car. My wife doesn't own one either. "You must save a lot in petrol" That's one of the frequent reactions when someone discovers we don't own a car. "Of course, but it's just the tip of the iceberg" is the usual theme of my reply. Many people I've talked to just aren't fully aware of the real cost of owning a car. Or even that there are six different costs of owning a car. Six? Really? Yes. Occasionally a work colleague or friend will boast their car only costs $X per week. Of course it turns out only some factors have been counted. Sometimes it's just petrol alone. To some people, that feels like the only cost they pay each week. Why does this matter? You might be questioning the need for a second car in the household (or even having one at all). Or you might just be choosing which car to get next. Either way, to make an informed decision we need proper information. So let's look at...

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