12 bad money habits that could cost you $15,759 a year

Editor-at-Large · 22 February 2021
Are you guilty of any of these bad money habits? You might be more careful when you see how much they could potentially cost you each year.

When you think of bad habits things such as gambling or smoking probably come to mind. And while these may cost you money there are plenty of other more innocuous bad habits that could be hurting your hip pocket.

I have identified 12 bad habits that many of us might be making. Some examples include letting your insurance renew automatically, mindless spending and using the dryer instead of hanging your washing out on the line.

Plus, I have crunched the numbers and found these bad habits could be costing you $15,759 a year! It’s important to note that the numbers are based on hypothetical scenarios (and the costs may be higher or lower for your situation) but you can certainly get an idea of how quickly things can add up.

1. Letting your insurance renew automatically

Many of us get complacent and don’t shop around for a better deal when our insurance is up for renewal. This is especially the case if you are paying by the month because the payments keep coming out of your account and you know you are still covered. You might say you’ll get around to it but before you know it another year has passed…

It can definitely pay to shop around. Canstar crunched the numbers and found that the average car insurance premium for a 30-49 year old in NSW is $1,250 but the lowest is $677. That means you could potentially save $573 a year by switching. The table below also shows the potential savings for hospital cover ($616) and home and contents insurance ($639). The total cost of letting your insurance renew automatically in this case could be $1,828 a year. Just make sure that you are comparing like for like and that you are still getting the same level of cover before switching to a cheaper product.

Potential Annual Savings – Switching from Average to Lowest Insurance Premium

Average Lowest Difference
Car Insurance
30-49 year old in NSW
$1,250 $677 $573
Gold Hospital Insurance
NSW Single
$2,145 $1,529 $616
Home & Contents Insurance
$1,428 $789 $639

Source: www.canstar.com.au. Prepared on 10/02/2021. Car Insurance: based on comprehensive car insurance policies rated in the Canstar 2020 Car Insurance Star Ratings. Premiums are based on a 30-49 year old in NSW and include quotes for both new and used cars for a range of scenarios, with a target excess of $700.. Hospital Insurance: based on Gold Hospital policies available for a single in NSW, with all excess options considered. The Australian Government Private Health Insurance Rebate, Base Tier for under 65s, of 25.059% has been applied to premiums. Home & Contents: based on quotes obtained for the Canstar 2020 Home & Contents Insurance Star Ratings. Premiums based on sum insured values of $550,000 for building and $50,000 for contents, with a target excess of $500.

Potential cost: $1,828 a year

Unlock your savings potential and sign up for your Budget Makeover with Effie Zahos

2. Setting and forgetting your home loan

You may have scored a good deal when you took out your mortgage but it’s important you don’t assume that is still the case. It’s a good idea to check your home loan at least once a year to make sure it is still competitive. Think about making a note in your calendar each year to remind you.

As the table below shows the average home loan rate on Canstar’s database is 3.29%pa while the lowest is 1.99% (comparison rate 2.05%). That’s quite a big difference and the savings that could come from switching are significant. On a $400,000 loan, for example, switching to the lowest-rate product could save you $274 a month in repayments – equal to $3,288 a year. Plus you’d save close to $100,000 in interest over the life of the loan. Make sure you consider what it would cost you to refinance before you go ahead.

Monthly Repayment & Interest Costs – Average vs Lowest Variable Rate

Rate Monthly Repayment Total Interest Costs
Average rate 3.29% $1,750 $229,863
Lowest rate 1.99% $1,476 $131,532
Difference 1.30% $274 $98,331

Source: www.canstar.com.au – 10/02/2021. Average and lowest rate based on owner occupier variable loans on Canstar’s database, available for a loan amount of $400,000, 80% LVR and principal & interest repayments; excluding introductory and first home buyer only loans. Monthly repayment and interest calculations assume a loan amount of $400,000, repaid over 30 years using principal & interest repayments.

Potential cost: $3,288 a year

3. Mindless spending

It might not feel like a big deal to spend $5 on a doughnut and coffee when out and about or to throw a $7 magazine into your trolley at the supermarket, but these types of impulse buys can really add up. Even spending $5 a day adds up to $1,825 a year. Now I’m not saying you can’t buy any small luxuries – just make sure they are factored into your budget so they don’t interfere with your financial goals.

Potential cost: $1,825 a year

4. Not paying yourself first

One of the best things you can do with your money is pay yourself first. This basically means that once you work out how much you can save from each pay you arrange to have it automatically transferred to a separate savings account before you can get your hands on it. Ideally, it’s a good idea to aim to save at least 10% from your pay.

Let’s say you earn the average wage in Australia, which according to the Australian Bureau of Statistics is $1,713.90. This works out to be $1,305 after tax. Not putting away that 10% each pay could cost you $6,786 over the year.

Potential cost $6,786 a year


Young Woman Hanging Washing
Image source: Ira Shpiller (Shutterstock.com)

5. Using the dryer rather than hanging the washing out

Using the clothes dryer may feel like a more convenient option than hanging your washing out on the line, but it can cost you more in electricity. Canstar crunched the numbers and found that, assuming you put six loads of washing each week in the dryer, it would cost you $305 a year. Is the convenience worth that extra expense?

Cost of Using a Dryer Instead of Hanging Clothes Out

Average annual energy consumption
(assuming 6 loads per week)
1,236 kWh
Average electricity usage cost 24.7 c/kWh
Annual cost $305

Source: www.canstar.com.au – 10/02/2021. Average energy consumption figures based on 5-10kg condensor clothes dryers listed in the Commonwealth of Australia E3 Program’s Registration database. Average usage cost based on single-rate products on Canstar’s database, available for an annual usage of 4,200 kWh.

Potential cost: $305 a year

6. Washing in warm water

If you use warm water to wash every time you do a load of laundry, you might want to think again. Each time you wash using hot water, it will cost extra to heat up the water, whereas cold water doesn’t require any heating. Canstar’s analysis found that, assuming you do seven loads of laundry a week, using warm water instead of cold could potentially cost you an extra $75 a year.

There will be times it may be better to wash in warm water – for example, if the items are very dirty or are stained – but using cold water most of the time can save you money.

Cost of Using a Warm Wash Cycle on a Washing Machine

Warm Wash Cold Wash Difference
Average annual energy consumption
(assuming 7 loads per week)
447 141 306
Average electricity usage cost 24.7 c/kWh 24.7 c/kWh
Annual cost $110 $35 $75

Source: www.canstar.com.au – 10/02/2021. Average energy consumption figures based on 5-10kg washing machines listed in the Commonwealth of Australia E3 Program’s Registration database; only includes products that have both warm and cold wash cycle energy consumption data available. Average usage cost based on single-rate products on Canstar’s database, available for an annual usage of 4,200 kWh.

Potential cost $75 a year

7. Not sticking to your shopping list at the supermarket

You know what it’s like – you’re at the supermarket and a new brand of biscuits catches your eye. It may not have been on your list but you think there’s no harm done. Then you think to yourself you could do with some tea to have with those biscuits so you add tea bags to your trolley as well.

A 2015 Journal of Marketing study found that you’re more likely to spend money on unplanned splurges as your shopping trip progresses. “Buying one thing you weren’t planning on getting makes you remember all of the other things you might have needed but didn’t put on your list, so that first impulse item you pick up opens the floodgates,” explained an article on the Time website about the study.

That’s why it’s important to stick to your list. It’s also a good idea to limit your supermarket visits to once a week rather than going every few days. The more often you go the more likely you are to be tempted to make an impulse purchase – or two.

Let’s say you aim to spend $140 at the supermarket each week. If you spend an extra 10% on impulse purchases that would cost you an extra $728 a year.

Potential cost: $728 a year

8. Waiting for your petrol tank to be empty before filling up

If you wait until your fuel tank is empty before you fill up you are at the mercy of the petrol price cycle and you could potentially end up paying much more. The ACCC, which tracks petrol price cycles, explains that petrol prices move up and down in regular patterns or cycles. “The cheapest and most expensive days to buy petrol can change from cycle to cycle. Use price cycles to help you decide when to buy petrol,” says the website. Prices can vary as much as 35 cents per litre in a matter of days.

If you paid, on average, 10 cents a litre more each time you filled up a 50-litre tank the cost would come to $130 a year. This assumes you fill up once a fortnight. So it is a good idea to keep an eye on the cycle in your capital city.

Potential cost: $130 a year

Person with reusable water bottle
Image source: Jess Clark Creative (Shutterstock.com)

9. Buying water when you’re out rather than taking your own bottle

We have all done it at one point or another – forgotten to take a water bottle with us when out and about and resorted to buying a bottle. Not only is this bad for the environment but it can put a bit of a dent in your wallet. Even if you did this once every two weeks it would cost you $91 a year – that’s assuming you paid $3.50 for a bottle of water each time. It may not seem like a lot but remember every little bit counts.

Potential cost: $91 a year

10. Paying for subscriptions you don’t use

It might be a free trial that you didn’t end up cancelling or a gym membership that you are no longer using, but the cost of unused subscriptions can really add up. According to research by REST, 62% of Aussies are paying for services or subscriptions they don’t use or have forgotten about. The research discovered Aussies were pouring $3.9 billion down the drain on paid apps, services and memberships they weren’t using.

Let’s assume you have a subscription costing you $10 a month that you aren’t using – that comes to $120 a year.

Take a good look at your bank account statements and put together a list of any subscriptions you are paying for. Think carefully about whether you are making good use of them. If not, consider giving them the flick.

Potential cost: $120

11. Not comparing prices

If you have seen something you want to buy then it pays to take the time to shop around to find the best price. I have even googled prices at the actual store before handing over any money. Some stores may match – or even beat – the price if you can prove you are able to get it cheaper elsewhere.

I looked at three items that you might buy in a year to see what savings could potentially be made by shopping around.

The first was a Samsung 656L Family Hub fridge. At the time of writing the price ranged from $2,998 to $3,299 – a difference of $301.

Next I went on the hunt for a pair of Levi’s Mile High Super Skinny Jeans. The RRP is $99.95, and this was the price at most stores, but at the time of writing The Iconic had them for 30% off  – a saving of $29.99.

Finally, I wanted to find the best price on a pair of Adidas Stan Smith’s. Prices ranged from $71.50 to $140 – a difference of $68.50.

Adding the savings of all three together comes to $399.50.

Potential cost: $399.50

12. Procrastinating when it comes to investing

If you are always thinking about investing but don’t get around to it, then you could be missing out on greater returns. Let’s say you invested $500 every six months starting in January 2019 and had invested $2,000 all up by July 2020 – you would have potentially made $296 on your investment by February. If, on the other hand, you had waited and invested that $2,000 all at once in July you would have made just $112 – missing out on $184. This is because of the power of compounding returns. So it can pay to get started – even if it is with a small amount. The key is to also add to your investment regularly.

Investing in Shares

By the end of 2020 the investment looks like…
Total Invested Investment Balance Total Earnings
In January 2019, you begin investing $500 every 6 months $2,000 $2,296 $296
In July 2020, you invest $2,000 $2,000 $2,112 $112
Difference $184
Average Annual Return 11.51%

Source: www.canstar.com.au. Prepared on 10/02/2021. Average return based on the average annual 5 year return of the S&P/ASX 200 Total Return Index up to 9 Feb 2021. Assumes earnings are reinvested, and ignores any transaction costs or taxes that may apply. Average return figures are for indicative purposes only. Actual returns will vary by investment product. The value of your investment will rise and fall over time. Past performance is not a reliable indicator of future performance.

Potential cost $184


Cover image source: Michael Leslie (Shutterstock.com)

This article was reviewed by Editorial Campaigns Manager Maria Bekiaris before it was published as part of our fact-checking process.


The comparison table below shows some of the savings accounts on Canstar’s database for a regular saver in NSW. The results shown are based on an investment of $100,000 in a personal savings account and are sorted by Star Rating (highest to lowest), then provider name (alphabetically). For more information and to confirm whether a particular product will be suitable for you, check upfront with your provider and read the Product Disclosure Statement or other terms and conditions before making a decision.

Effie ZahosAbout Effie Zahos

Canstar’s Editor-at-Large, Effie Zahos, has more than two decades of experience helping Aussies make the most of their money. Prior to joining Canstar, Effie was the editor of Money Magazine, having helped establish it in 1999. She is an author and one of Australia’s leading personal finance commentators, appearing regularly on TV and radio.



Follow Canstar on Facebook and Twitter for regular financial updates.


Thanks for visiting Canstar, Australia’s biggest financial comparison site*

→ Looking to find a better deal? Compare car insurance, car loans, health insurance, credit cards, life insurance and home loans with Canstar. You can also check your credit score for free.

Share this article