Teaching Youth About Money | Part 3
This financial wellbeing presentation covers the costs of owning pets and cars, and the difference in pre-paid and vs contract mobile phone plans.
How much does it cost to own a pet?
Australia is officially a nation of pet lovers. With one of the highest rates of pet ownership in the world, we have around 25 million pets living in almost 63% of all Australian homes. That’s 2 million more pets than people in our population!
The majority of all pets are cats (29%) and dogs (39%).
Discussion Points
What kind of pets do you have?
-
Answer = $25,000
-
Answer = $15,000
Things you have to pay for:
Food
Vet expenses
Vaccinations
Flea, tick and worming medications
Accessories
Council registration
Pet insurance
Toys and treats
Watch this video about the cost of owning a pet:
Additional Activity
How much does it cost to own a car?
Buying a car maybe the first big purchase you make. Owning a car brings freedom, but it also comes with responsibilities. The costs involved with buying a car are more than just the purchase cost.
Before getting a car you need to know how much you can pay. Doing a budget is a good start to see if you can afford to buy a car and keep it running.
It is estimated that running and maintaining a car can cost around $7,000 per year. Setting aside money each month can help you budget for these ongoing and annual expenses.
One off car expenses can include:
Purchase price
Stamp duty
Transfer of registration fee (if the car is already registered you must pay to have this transferred into your name)
Annual and ongoing car expenses:
Motor vehicle registration
Compulsory insurance
Optional car insurance
Loan repayments (if applicable)
Fuel
Parking and toll road costs
Car maintenance
Car servicing and tyre costs
Road side assistance
Activity
Use this worksheet to identify hidden costs.
Work out which car is for you
Are you licensed to drive a manual or will you need an automatic? Manual cars are often cheaper than automatic cars, and can cost less to repair.
A small car can make sense if you are mainly driving in town and are cheaper on fuel. Larger cars have higher costs of registration, servicing, tyres and petrol.
Buying a car
Save hard
Do your research and decide what type of car you want
Visit dealers, look in papers, and go online to compare prices
Decide on a maximum cost
Car Loans
A car loan is a personal loan for the specific purpose of buying a new or used car. The amount borrowed must be repaid to the credit provider within a period of time (the term) usually between 12 months and 5 years.
Car Insurance
Car insurance can cover the cost of your car if you damage it, it is stolen or anyone is injured. There are many different types of insurance when you buy your car:
Compulsory Third Party (CTP) Insurance
This insurance is compulsory and is a requirement when registering your vehicle in Australia. It is attached to the registration of your vehicle. It covers damage caused by your car to other people’s property, as well as your own legal costs.
Third Party Property
Covers damage to other people’s property and legal costs.
Third Party Property Fire and Theft
Covers damage caused by your car as well as loss or damage caused to your car due to theft or fire damage.
Comprehensive Car Insurance
Gives you the most cover but is also the most expensive type. Covers damage to your car and damage to other people’s property if your car is in an accident including fire and theft of your vehicle.
A car insurance claim may still cost money if there is an excess to pay included in the cover. An excess is how much you must pay when making an insurance claim.
Watch this video about how to avoid some of the mistakes first car buyers make:
Mobile Phones: Prepaid vs Contract
Before you get a mobile phone it is important to know how much you can afford for your phone now, and for the length of your mobile phone plan.
A good start is to do a budget. A budget is important as you need to work out if you can afford a mobile phone.
Once you sign up for a mobile phone deal it is a legally binding contract. It is therefore important if you don’t understand your phone contract you ask for help from a family member, friend or co-worker.
If you sign up for a mobile phone plan and lose your phone, or it gets damaged, your phone contract will still continue.
Contract Mobile Phone Plans
PROS:
Lower call rates per minute than a prepaid mobile phone
You get a brand new phone device every 2 years
CONS:
Signing a contract may get you your phone cheaper up front, but the actual monthly costs are much higher than prepaid.
Less freedom. Signing a phone contract locks you into the service provider for up to 2 years.
You might end up with a huge phone bill at the end of the month.
Prepaid Mobile Phones
PROS:
Less monthly phone expenditure.
You own the phone outright. It is your phone.
You won’t end up with a high unexpected phone bill.
CONS:
You have to pay the full price upfront for the mobile phone you wish to use.
Higher call rates per minute than contract plans.
Watch this video about tips for buying a new phone:
Additional Activity
You can download this presentation here.
