Stuff to know?
Hey again RO,
Wasn't too sure where to post this so feel free to move it.
So I'm 15 and turning 16 next April.
I've applied for 2 jobs already but my phone has been broken for the last month.. so eh.
Anyway, I'll be moving out and renting a place as soon as I turn 17. According to mum anyway.
well being 15, I should probably get to know these things sooner.
I'd like to know what each of these terms mean. I hear them pretty often and they sound important.
> Morgatage. I think that's something to do with buying a house.
> Loan. How does a loan work?
> The heck does a realestate agent do? I see ads and stuff all around town but got no idea what they do.
> Insurance. I've never 100% understood life insurance and stuff like that.
> Finance. Got no idea what that is. Also sounds important though.
> Exchange rate. ?
> Penalty rates.
Thanks in advance if anyone can get back to me on this <3
I'll be in town later today to drop off my phone. So I wont be on until probably around 6
Re: Stuff to know?
WOW, thats so much to think about! Sounds like your really starting to plan ahead
I really want to jump in and give my 2 cents but im interested in other peoples experiences on this. What does everyone else think?
Re: Stuff to know?
I hope your phone gets sorted out quickly.
It sounds pretty tough to be expected to move out at 17 - how are you feeling about that?
Good work trying to get informed about all the weird house/money stuff though. It's never to early to start finding stuff out about them, and I certainly wish I knew more about it before jumping out into independent living.
I can give you a basic rundown on some of this stuff since I'm dealing with a lot of it right now... But I'm definitely not an expert so make sure you check with someone who's qualified to give proper advice if you want advice.
- Mortgage - Yep you're right it's usually about buying a house/apartment. When someone borrows money to buy their new home, the bank (or other lender) will want some form of "security" in case the person can't pay them back. In this case, the "security" is the house - if the person can't pay back the lender to the agreed terms, then the lender is legally able to take the home to recover their money. But they'll usually only want to do that as a last option, so as soon as the person realises that they can't make their repayments they should get in contact with the lender to work out a new arrangement.
- Loan - If you need to borrow money for something, you can approach a bank or another lender and ask them for a loan. The terms of the loan will include how much you're borrowing, and over what period of time you have to pay it back. The interest rate that the bank tells you determines how much extra you'll have to pay back (which is called the "interest"), and there's extra stuff like how frequently the interest is calculated which also has an effect. For more info on that I'd suggest googling "how is interest calculated" - I think I did it in year 10 or 11 maths. Depending on what you're borrowing for, you might need a mortgage as above.
- Real estate agents - These are the people you'll need to deal with if you want to rent a place, buy a place, sell a place, or have a place that you're putting up for rent. For renting purposes, you check out what "listings" they have (i.e. what places are available to rent), then you pick one you want to look at and do an "inspection" - either attend an "open house" for that place which has already been arranged, or you can call/email the agent and ask if you can see it at a different time. When you attend the inspection, you'll meet the agent and they'll probably collect your name/phone#/email, and you can look at the property and see if you want to live there. If you do, there's a form you fill out called a "rental application" and you usually need some evidence of stuff like payslips, a personal reference, ID. All the info goes to the owner via. the agent, and the agent will let you know if your application is successful or not. If you're successful, you'll pay a certain amount straight up (deposit) and collect the keys from the agent. Plus you'll have to do a "condition report" where you go around the place and note down anything that's already wrong with it before you moved in (like is the paint scuffed, is a tile broken) so that they don't blame you for it when you leave. The agent will also arrange to visit the place at certain points of time to make sure you're keeping it clean/undamaged, and there are minimum periods of warning that they have to give before they come in. You don't actually have to be there when they come to inspect since they still have a copy of the keys. And when you leave the place, you have to do another "condition report" to say if there's any extra damage and give that back to the agent and see if they agree with what you've written. If everyone agrees, then you'll get the deposit back.
Aaaand I won't go into what happens if you're buying because I've already written a small novel.
Re: Stuff to know?
- Insurance - This one I'm not very experienced with, but there's different types of insurance depending on what you're trying to insure. For example a basic description of "health insurance" is where you pay some money regularly, so that if you need to have certain medical treatments then they won't cost you the full amount - if the health insurance plan says you're "covered" up to $200 for routine dental stuff in one year but it cost you $250, then they pay $200 and you pay $50. So it's really dependent upon the terms of the plan. Another example is "contents insurance" where you pay some money regularly in case the things inside your home get stolen/damaged by some mechanism that's covered under the terms of the insurance plan... And you pay to get covered up to a certain amount that you think you'll need to replace your stuff. Tbh I've never looked into life insurance so I dunno about that one
- Finance - do you mean in general, or in terms of making a big purchase (house/car/boat/?)? If it's in terms of making a big purchase, I think it's basically "the means with which to complete the purchase, either by having cash or having arranged a loan."
- Exchange rate - Different currencies around the world all vary with respect to each other. Sometimes $1 in Australian currency will be equivalent to $0.70 in America, sometimes it'll be more like $0.60 or whatever - it's changing all the time. Same with other currencies internationally. The exchange rate is that comparison between the currencies - if you wanted to exchange your Aussie $1.00 for an equivalent amount of USA currency, the exchange rate right now tells me you'd get $0.75 US. The trick is, that different banks/exchangers can use slightly different exchange rates when they do it - so you want to pick the one that gives you the best rate if you can. This matters if you're going overseas, transferring money to someone overseas, trying to buy something online that's in another currency etc.
- Penalty rates - I don't know much about this one cause it's been too long since I paid any attention to it. And I'm assuming this is in the context of what you get paid at work... So if it's not to do with that then this will be completely irrelevant... But... When you start working, you might be paid $x/hr for standard hours. But if your contract/agreement includes penalty rates it'd mean getting a higher pay for overtime or working on the weekend (depending on what the government requires and what's in the employment contract).
Alright. So I hope some of that was useful. If anyone else has more stuff or better explanations or wants to correct something then definitely jump in
Re: Stuff to know?
Isn't it weird that you learn all these stuff in school that you'll probably never use again, but hardly anything about important life skills like how to rent a house or do a tax return.
Insurance is like a safety net in case something bad happens. You can get it for all sorts of things, and there are different levels so it can get pretty confusing. Basically, if you take out an insurance policy it means you have agreed to pay an insurance company a small amount of money each month (a "premium") but if something bad does happen, the insurance company will give you enough money back to fix it.
Some of the common ones are:
- Home and Contents Insurance to cover anythig bad happening to your house, like a flood or someone stealing all your stuff.
- Car Insurance, in case you crash and need to fix your car or pay someone else to fix theirs.
- Health Insurance will cover any operations or medical appointments at private hospitals.
- Life Insurance is usually for people with families, so if they die unexpectedly ther family will get some money to help them out.
You don't get the money back if nothing bad happens and you never need to "claim" a payment. Think of it like a communal pool of money. So 50 people pay $20 each month to an insurance company in cas their house burns down. But in ten years, only one of those people has their house burn down. All the money people have paid each month goes to that person so they can build a new house. Not everyone has insurance, some people like to take the risk that they will have lots of good luck and not experience anything bad. Or they might earn enough money that if their house did burn down, they have enough savings to fix it themselves. Does that make sense?
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