Unlock the secret to saving ‘thousands’ amid cost-of-living pressures
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The continuous rise in Australia’s cost of living has left many feeling the pinch. But fear not! There are several strategies that can help you save thousands of dollars and improve your budget almost instantly.
From auditing your essential expenses to switching service providers, these tips can help you navigate your finances better.
Kate Browne, the Head of Research at Compare Club, shared that the start of a new year is the perfect time to conduct a financial health check. Ms Browne suggested reviewing essential expenses such as insurance and utilities to identify potential savings.
Electricity is a significant expense for most households. A recent report by the Australian Competition and Consumer Commission (ACCC) found that 79 per cent of households are paying more than necessary for their electricity.
‘We’ve found many people could save as much as $600 on their energy bills right now,’ Ms Browne suggested.
‘There’s a huge number of Aussies who are stressing unnecessarily about their bills but could save on average $346 per year—but in some states it’s much more.’
In Victoria, potential savings could be as high as $700 per year.
‘Combine this with potential eligibility for state or federal rebates for Commonwealth Concession Card Holders, low-income earners or families can save some households up to $1000 a year,’ Ms Browne added.
Some electricity providers also offer new customers the opportunity to lock in their rate for six months up to a year, providing financial certainty in these uncertain times.
Meanwhile, Finder Personal Finance Specialist Taylor Blackburn stated that a more ‘sustainable’ way of cutting costs is to look around for a better deal.
‘If you have had the same energy plan for more than a year, you are likely paying more than you need to and not getting the perks offered to new customers,’ he said.
‘Providers really want your business—some are offering $180 in cashback or up to 20,000 Qantas points.’
But the savings don't stop at electricity. There are potential reductions to be made across a range of other utilities, insurance and services.
Broadband is another area where you could be paying more than necessary. With the cost of NBN services recently increasing, many people will be automatically paying more.
Ms Browne suggested asking your current provider for a discount for being a loyal customer. ‘It’s very easy to knock $10 to $20 off a month,’ she claimed.
If they're unwilling to negotiate, consider switching to a new provider.
Sticking with the same provider for long periods without looking for another option is also known as a 'loyalty tax', Blackburn said. According to Finder, Australians collectively paid more than $1.2 billion in loyalty tax to NBN providers.
‘If you haven’t switched providers or negotiated a better deal with your existing provider in the past six to 12 months, you’re probably paying too much,’ Mr Blackburn explained.
Meanwhile, home loans offer the biggest potential reduction in household expenditure, with Compare Club reporting an average saving of $4,680 on offer.
Ms Browne revealed that their brokers can knock an average of 0.8 per cent from people’s interest rates.
‘This is based on an average mortgage of $585,000 with a standard variable interest rate of 6.67 per cent and then considering the compounding interest you’ll avoid by switching,’ she said.
However, this is also based on a ‘helicopter view’ of all home loans across more than 50 lenders and not just the mortgages offered by Australia’s four major banks.
‘A good broker can secure special deals only available to lenders, so it’s worth a call to check if you can get a better deal on your home loan,’ Ms Browne shared.
Mr Blackburn, on the other hand, said that a ‘modest reduction’ in your interest rate could make a lasting impact—with a 50-basis points discount on a $500,000 balance resulting in a $150-a-month savings.
‘You will save…tens of thousands in interest over the course of a 30-year loan,’ he stated.
‘Even with rates higher than they’ve been in recent years, there are still thousands in savings available if you can move to a better deal.’
Health insurance is another area where substantial savings can be made.
By analysing the cost of health insurance premiums and extras on offer, Ms Browne said: ‘On average, families could save about $420 per year, couples could save up to $213 per year, singles could save about $227 per year, and single-parent families could save $370.’
‘Choose a policy that refunds a percentage amount rather than a dollar amount so it can adjust with inflation.’
‘We also found some people on old policies that were getting as little as half the value of their extras compared to similarly priced new policies on the market.’
She was also quick to remind everyone that most health funds reset on 1 January.
‘Check what you have and make sure you get in for a dentist visit or order glasses if you wear them. If you find you aren’t getting through your extras allocation, then ask for a cheaper extras policy or have it tweaked to suit what you are actually using.’
Credit card debt can quickly spiral out of control, especially after the expensive holiday season. But according to Ms Browne, it’s one of the easiest costs to get back under control.
‘There’s a number of exceptionally good fee-free balance transfer cards available on the market that give you time to pay off your balance and avoid getting hit with interest,’ she said.
‘Also, check if your new card has an interest-free period for new purchases, in case you plan on using it.’
According to her, the average Aussie has a credit card balance of $2,296, with a jaw-dropping interest rate of 19.82 per cent.
‘Moving all this debt to a 32-month zero per cent balance transfer credit card could save $843 in debt-accruing interest over 12 months.’
Mr Blackburn also shared that there are some enticing offers in the market to help reduce credit card debt.
‘If you are carrying a balance on your card, a balance transfer is not a silver bullet—you still need to make a plan to pay it off—but it can save you thousands of dollars in interest while you do so.’
Car loans are another area where you can reduce your expenses. According to car finance broker Car Clarity, the average automobile loan interest rate is currently 15.04 per cent.
Compare Club also found the average new loan rate is about 10.02 per cent, meaning the average amount you could save when refinancing is $3,566 per year.
‘Many of us took out our car loan at the dealership, but these loans aren’t good value for money and can add thousands onto your overall repayments,’ Ms Browne admitted.
Other areas where you could be paying more than necessary are car insurance, mobile phone service providers, personal loans, and life insurance.
Finally, consider bundling your services. Combining multiple services with one provider can often result in a discount.
‘Look at bundling your insurance together with one provider to get a discount—car, home and contents, pet, and so on,’ Ms Browne concluded.
‘Bundling energy, broadband and phone is also easy to do, and also often providers will offer a discount for doing so.’
Remember, every dollar saved is a dollar earned. So, start implementing these tips today and watch your savings grow!
What are some of your favourite money-saving tips? We’d love to read them, so share them in the comments below!
From auditing your essential expenses to switching service providers, these tips can help you navigate your finances better.
Kate Browne, the Head of Research at Compare Club, shared that the start of a new year is the perfect time to conduct a financial health check. Ms Browne suggested reviewing essential expenses such as insurance and utilities to identify potential savings.
Electricity is a significant expense for most households. A recent report by the Australian Competition and Consumer Commission (ACCC) found that 79 per cent of households are paying more than necessary for their electricity.
Many are paying higher than the median amount for their energy bills. Credit: Eric Anada/Pexels
‘We’ve found many people could save as much as $600 on their energy bills right now,’ Ms Browne suggested.
‘There’s a huge number of Aussies who are stressing unnecessarily about their bills but could save on average $346 per year—but in some states it’s much more.’
In Victoria, potential savings could be as high as $700 per year.
‘Combine this with potential eligibility for state or federal rebates for Commonwealth Concession Card Holders, low-income earners or families can save some households up to $1000 a year,’ Ms Browne added.
Some electricity providers also offer new customers the opportunity to lock in their rate for six months up to a year, providing financial certainty in these uncertain times.
Meanwhile, Finder Personal Finance Specialist Taylor Blackburn stated that a more ‘sustainable’ way of cutting costs is to look around for a better deal.
‘If you have had the same energy plan for more than a year, you are likely paying more than you need to and not getting the perks offered to new customers,’ he said.
‘Providers really want your business—some are offering $180 in cashback or up to 20,000 Qantas points.’
But the savings don't stop at electricity. There are potential reductions to be made across a range of other utilities, insurance and services.
Broadband is another area where you could be paying more than necessary. With the cost of NBN services recently increasing, many people will be automatically paying more.
Ms Browne suggested asking your current provider for a discount for being a loyal customer. ‘It’s very easy to knock $10 to $20 off a month,’ she claimed.
If they're unwilling to negotiate, consider switching to a new provider.
Sticking with the same provider for long periods without looking for another option is also known as a 'loyalty tax', Blackburn said. According to Finder, Australians collectively paid more than $1.2 billion in loyalty tax to NBN providers.
‘If you haven’t switched providers or negotiated a better deal with your existing provider in the past six to 12 months, you’re probably paying too much,’ Mr Blackburn explained.
Meanwhile, home loans offer the biggest potential reduction in household expenditure, with Compare Club reporting an average saving of $4,680 on offer.
Ms Browne revealed that their brokers can knock an average of 0.8 per cent from people’s interest rates.
‘This is based on an average mortgage of $585,000 with a standard variable interest rate of 6.67 per cent and then considering the compounding interest you’ll avoid by switching,’ she said.
However, this is also based on a ‘helicopter view’ of all home loans across more than 50 lenders and not just the mortgages offered by Australia’s four major banks.
You could be paying more for your mortgage without realising it. Credit: Monstera Production/Pexels
‘A good broker can secure special deals only available to lenders, so it’s worth a call to check if you can get a better deal on your home loan,’ Ms Browne shared.
Mr Blackburn, on the other hand, said that a ‘modest reduction’ in your interest rate could make a lasting impact—with a 50-basis points discount on a $500,000 balance resulting in a $150-a-month savings.
‘You will save…tens of thousands in interest over the course of a 30-year loan,’ he stated.
‘Even with rates higher than they’ve been in recent years, there are still thousands in savings available if you can move to a better deal.’
Health insurance is another area where substantial savings can be made.
By analysing the cost of health insurance premiums and extras on offer, Ms Browne said: ‘On average, families could save about $420 per year, couples could save up to $213 per year, singles could save about $227 per year, and single-parent families could save $370.’
‘Choose a policy that refunds a percentage amount rather than a dollar amount so it can adjust with inflation.’
‘We also found some people on old policies that were getting as little as half the value of their extras compared to similarly priced new policies on the market.’
She was also quick to remind everyone that most health funds reset on 1 January.
‘Check what you have and make sure you get in for a dentist visit or order glasses if you wear them. If you find you aren’t getting through your extras allocation, then ask for a cheaper extras policy or have it tweaked to suit what you are actually using.’
Credit card debt can quickly spiral out of control, especially after the expensive holiday season. But according to Ms Browne, it’s one of the easiest costs to get back under control.
‘There’s a number of exceptionally good fee-free balance transfer cards available on the market that give you time to pay off your balance and avoid getting hit with interest,’ she said.
‘Also, check if your new card has an interest-free period for new purchases, in case you plan on using it.’
According to her, the average Aussie has a credit card balance of $2,296, with a jaw-dropping interest rate of 19.82 per cent.
‘Moving all this debt to a 32-month zero per cent balance transfer credit card could save $843 in debt-accruing interest over 12 months.’
Mr Blackburn also shared that there are some enticing offers in the market to help reduce credit card debt.
‘If you are carrying a balance on your card, a balance transfer is not a silver bullet—you still need to make a plan to pay it off—but it can save you thousands of dollars in interest while you do so.’
Car loans are another area where you can reduce your expenses. According to car finance broker Car Clarity, the average automobile loan interest rate is currently 15.04 per cent.
Compare Club also found the average new loan rate is about 10.02 per cent, meaning the average amount you could save when refinancing is $3,566 per year.
‘Many of us took out our car loan at the dealership, but these loans aren’t good value for money and can add thousands onto your overall repayments,’ Ms Browne admitted.
Other areas where you could be paying more than necessary are car insurance, mobile phone service providers, personal loans, and life insurance.
Finally, consider bundling your services. Combining multiple services with one provider can often result in a discount.
‘Look at bundling your insurance together with one provider to get a discount—car, home and contents, pet, and so on,’ Ms Browne concluded.
‘Bundling energy, broadband and phone is also easy to do, and also often providers will offer a discount for doing so.’
Remember, every dollar saved is a dollar earned. So, start implementing these tips today and watch your savings grow!
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