Australian families squeezed by significant increases in fuel and energy costs among other rising household expenses, can still make cuts to their outgoings without feeling the pinch, says Abigail Koch at comparison website comparethemarket.com.au.
“Australia’s everyday cost of living has increased significantly over the past 12 months and we expect it will continue to rise, putting further pressure on household budgets. Australians can take back control, by making the most of savings tactics that can relieve the pinch and potentially save around $3500 a year.
“Now is the time to get your ducks in a row. A financial spring clean will help put you in the right mindset, form a routine and gain momentum for some significant savings before the New Year,” said Abigail.
To help Australians curb unnecessary outgoings, Abigail lists 10 hidden expenses that consumers can start cutting out of their day-to-day spending now.
1. Filling the tank at random. Instead, keep an eye on the petrol price cycle and fill up when it’s low. Petrol stations in most cities follow a cycle of 10-22 days, offering low prices for two-to-three consecutive days within those cycles. Follow these cycles online and learn the trends to be a winner at the bowser. Also, don’t forget to hold onto shopper dockets. Coles offers fuel savings of up to 14c per litre if you bundle ordinary store dockets with those from Coles Express stores.
Potential annual saving: $218 (based on filling a 60 litre tank fortnightly at 150c per litre)
2. Using card to pay your cab fare. Even though new payWave and PayPass methods make it easier than ever to pay that Saturday night cab fare, a 10 per cent surcharge applies. Instead, plan ahead and place your estimated cab fare in a separate compartment of your wallet to avoid spending throughout the night. Note that there is also a tap-and-go charge in stores such as Aldi who charge 0.5% for this form of payment.
Potential annual saving: $208 (Based on 2 x $20 cab fares per week)
3. Staying with an energy supplier who hasn’t reduced prices since the carbon tax repeal. Not all energy suppliers have passed on savings since the repeal of the carbon tax. If your supplier has decreased costs, then they are likely to have notified you already. If not, you may be paying around 9% more for energy than your neighbours! Compare online which suppliers have introduced decreases – six suppliers on comparethemarket.com.au have already reduced prices since July. Some suppliers also offer an additional 10 per cent discount for paying on time by direct debit.
Potential annual saving: $380 (based on a 19 per cent saving on a $500 quarterly gas and electricity bill)
4. Spending airline reward points on upgrades. While we would all love to travel more comfortably, is that extra legroom really worth it on a two-hour domestic flight? Why not trade your points for more practical solutions such as supermarket vouchers. For instance, 4000 Qantas Frequent Flyer points are worth a $25 Woolworths Gift Card.
Potential saving: $25 at the supermarket
5. Continuing a gym membership despite never going. It seemed a good idea to waive that joining fee in exchange for an 18 month membership – but now you have six months left on a contract that you’re not using. Argh! Some clubs now allow you to sell your contract to a friend at no cost. Your friend avoids joining fees and takes up the remaining payments.
Potential annual saving: $900 (based on six months at $150 per month)
6. Paying for home loan features you don’t need. When comparing home loans, list out any additional features on offer, such as offset accounts and redraw facilities, and consider the likelihood of requiring these. Getting rid of the features that you don’t need could save you a huge sum of money over the 30 years life of the loan.
Potential annual saving: For a homeowner with a $300,000 mortgage and a 6 per cent interest rate, an average $7.81 offset account monthly fee could result in the borrower missing out on more than $3000 over 30 years.
7. Grocery shopping online. Selecting food items from the comfort of your home can actually save money as you resist in-store temptations. However, with delivery fees of up to $13.99 you could be spending an additional $700 per year. Instead opt for Click and Collect. Choose everything you want online and simply collect from the store checkout free of charge. If you have to opt for delivery, try choosing an off-peak delivery time for a cheaper fee.
Potential annual saving: $727 (based on a $13.99 weekly delivery fee)
8. Paying for health insurance extras that don’t meet your needs. While you may have ticked the box for dental, what exactly are you covered for? A common mistake is overlooking the limitations when choosing extras. For example, a family of four may have chosen eye care but, when it comes to buying new glasses, realise that there’s a $400 family limit. If three members of that family require glasses totalling $800, the policy may only cover half. Save by prioritising your requirements and communicating these to the private health insurance specialist when choosing a policy.
Potential annual saving: $400 (based on $800 for three sets of glasses)
9. Paying full price on date night. Sure it’s fun to do something special with your partner every week. However, you could be spending $100 a pop, which could be better spent towards something rewarding, like an end-of-year holiday. If you love to head out midweek, try sourcing a phone or energy supplier that offers rewards such as discounted cinema tickets. Telstra currently offers $10 movie tickets to its customers plus 10 friends.
Potential annual saving: $260 (based on $10 savings on cinema tickets for two every 4 weeks)
10. Not comparing your suppliers. Reviewing suppliers – energy, insurance, telcos and credit cards – at least every 12 months will allow you to select the most cost effective and appropriate plans to meet your individual needs. In doing so you could potentially save hundreds of dollars every year. Australian Bureau of Statistics: Quarterly Living Cost Index June 2014  http://www.news.com.au/finance/real-estate/offset-accounts-may-cause-an-upset/story-e6frfmd0-1226599716342