Christmas is around the corner which means that it’s a great time to find some smart ways to save extra cash (because you really don’t want to end up with a big credit card bill in February!)
Saving money doesn’t have to mean cutting back on coffee or smashed avocado or movies though. There are plenty of other – almost invisible – ways to keep more of your coin in your own account, and it’s all about giving your financial products a money health check .
Let’s break those different saving suggestions down, bit by bit.
Get your credit score
Why do you need to know what your credit score is? Because it can save you money! If you have a great credit score, that puts you in a good negotiating position when it comes to getting a better deal on financial products. That’s because lenders use your credit score to determine how much they’re willing to lend you and what your interest rate will be.
Health check your superannuation
Okay, so it’s not going to put more money in your pocket for Christmas spending, but it’s just something that we don’t get around to doing. So while you’re on a financial health check roll, check your superannuation as well.There are far more superannuation accounts in Australia than there are workers, which indicates that some of us have two, three or more super accounts open. There is also approximately $12 billion in lost superannuation sitting in an ATO holding account. Some of that could be yours…We have some great tips on how to find your lost superannuation as well as guidance on what fees superannuation funds charge.Even doing just some of the above stuff could free up some money for Christmas and beyond. And even better, you haven’t had to cut out any of the fun stuff!
Check your savings account
Your deposit accounts – both transaction and savings – are another place you can potentially save money, particularly in our low (low, low, low) interest-rate environment.
We make plenty of transactions. According to the Reserve Bank, in August alone this year Australians made the following types of transactions:
|Credit Cards||219 million transactions, $26.7 billion of value|
|Debit Cards||427 million transactions, $22 billion value|
|Cheques||8.6 million cheques drawn, $47 billion value|
|Cash ATM withdrawals||55.2 million ATM cash withdrawals, $11.6 billion value|
Unfortunately all these transactions can cost of money if you don’t have an account that suits our spending habits. Canstar’s research has found that possible types of fees that consumers might be charged on various transaction accounts include:
|Can range up to…|
|Account keeping fees||$10 per month|
|ATM Fee (for using you own bank’s ATM network)||$2 per transaction|
|Branch fee (for a cash withdrawal using branch facilities)||$5 per transaction|
|EFTPOST fee||$2 per transaction|
Based on products listed on Canstar database September 2016
Avoid them if you can!
And then we have savings accounts. When you’re choosing a savings account, some questions to ask are:
|What’s the interest rate?|
|What are the fees?|
|Is the money accessible?|
|Any free transactions and fee rebates?|
|Any other features?|
Consider a credit card balance transfer
If you have an ongoing credit card debt then you’re probably well aware of the painfully high credit card interest rates that some cards charge. Currently on Canstar’s database, minimum, maximum and average ongoing credit card interest rates are:
|Non-Rewards Credit Cards|
|Rewards Credit Cards|
|Source: Canstar. Based on products listed on Canstar database at 10/11/16|
One potential strategy to save money on credit card interest is to take advantage of a balance transfer. And there is plenty of competition in that area: in 2013, there was just one credit card on Canstar’s database offering a 0% balance transfer deal for 12 months or more; in 2015, there were 23; currently there are 77!
But if you’re going to use a balance transfer, do it properly. While they can be an effective debt management tool, they can also be just another thing keeping you on the credit card roundabout, which obviously isn’t any good for you or your finances. We have plenty of tips and tricks here.
Find a better home loan
Even in our low official cash rate environment, there’s a more than 2% difference between the highest and lowest advertised home loan rates on Canstar’s database.
Canstar recently researched and rated 1,198 home loans from 98 lenders. For someone with a $400,000 mortgage over 25 years, even a half a percent difference in home loan interest rates could potentially save more than $100 per month. The bigger your debt, the greater the potential monthly savings when you reduce your home loan interest rate!
|Total Cost over 25 years||$1,000,498||$917,124||$833,749||$750,374||$666,999||$583,624||$500,249|
|Possible Monthly Difference||$168||$154||$140||$126||$112||$98||$84|
Source: Canstar. Illustrative calculation only. Does not take into account fees or other charges.
Compare your insurance policies
You can insure your pet, your income, your stuff: it seems like we insure just about every part of our life (including our life) nowadays. For the purpose of pre-Christmas saving, though, let’s talk about three common types of insurance policy: health insurance, home & contents insurance and car insurance.
Save on Health Insurance
There are potentially enormous cost savings to be made in the area of health insurance. Each year Canstar does a comparison of health insurers around the country; our most recent health insurance ratings compares 628 insurance products from 24 health insurers and ranks them against 287 consumer profiles.
The cheapest health insurance isn’t likely to be the best health insurance for your needs, so it’s not about cutting corners – that doesn’t mean that you shouldn’t compare your options though. The cost of health insurance increases each year and being smart about what cover you have can help you save. Think about likely types of claims at your age, at your stage of life, and based on your family history. Then start comparing.
Save on home & contents insurance
Are you paying too much for home insurance? Only 1 in 3 (30%) of home insurance customers surveyed this year by Canstar Blue said that they have shopped around and compared home & contents insurance policies in the past 3 years. That means that more than two-thirds of us could probably be getting a better deal.
Canstar research has found that online discounts for new customers are very common in general insurance, with premium discounts of up to 30% for new customers. That’s potentially a few hundred dollars a year in your pocket!
Canstar recently compared 141 home and contents insurance policies from 49 insurers across the country to determine which providers are offering outstanding value for money.
Save on car insurance
Car insurance is vitally important – and the good news for customers is that it seems to be even more competitive than health or home insurance, with some very healthy online discounts available for new customers.
Not that discounts are everything: you need to make sure the policy you have is outstanding value for your needs (which is why Canstar has researched and rated 63 car insurance policies from 53 providers).
What does car insurance cost anyway? Canstar has calculated the average premium in 2016 for drivers with a new car as follows:
|Average premium per year for drivers (categorised by age) with a new car|
|45+ years old||$868||$579||$759||$608||$568||$606|
|30-44 years old||$1,007||$648||$845||$687||$634||$677|
|Under 25 Female||$2,310||$1,469||$2,082||$1,670||$1,511||$1,555|
|Under 25 Male||$2,607||$1,646||$2,305||$1,876||$1,704||$1,741|
|Source: Canstar, May 2016. Premiums rounded down to nearest dollar|
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