Stop throwing away your hard-earned cash this year. With just five simple switches you can save almost $3000 in 2019. We explain how it’s done.
There’s nothing that banks, insurers and phone companies love more than consumer apathy.
When you ‘set and forget’ your home loan or automatically renew your car insurance, they can get away with charging you higher prices.
Australia has so many different companies out there that if you make a new year’s resolution to shop around, you’ll almost certainly find a better deal.
Here are five things you could do in 2019 to save a grand total of $2,810 over the course of a year.
#1 Refinance your home loan
The expense where many Australians will be able to make the biggest saving is with their mortgage.
Imagine you’ve got 25 years left on a $350,000 home loan. Let’s assume your interest rate is 4.30 per cent, which is the average rate for all the principal-and-interest owner-occupier mortgages listed on RateCity.com.au.
If you refinanced to Reduce Home Loans’ Rate Smashers Variable Home Loan, which is priced at 3.44 per cent (comparison rate also 3.44 per cent), your annual repayments would fall from $22,871 to $20,891.
That’s a saving of almost $2,000 per year – or about $50,000 over 25 years.
Annual saving: up to $1,980
|Loan||Interest rate||Annual repayments|
|Average P&I owner-occupied, loan listed on RateCity.com.au||4.30%||$22,871|
|Reduce Home Loans – Rate Lovers Variable Home Loan||3.44%||$20,891|
#2 Change credit cards
You could significantly reduce your credit card interest payments if you switched from the ‘average’ standard credit card to a low-rate alternative.
Let’s say you typically owe around $3,000 on your credit card, which is the average balance accruing interest, according to the Productivity Commission.
The average cardholder is charged an interest rate of 17.04 per cent and an annual fee of $126 according to RateCity.com.au. However, if you switched to the American Express Low Rate Credit Card, you’d pay 8.99 per cent and $0, respectively.
Over 12 months, you’d be charged $511 interest on the higher-rate card but only $270 on the lower-rate card.
Annual saving: up to $367
|Credit card||Annual fee||Interest rate||Annual interest|
|Average credit card||$126||17.04%||$511|
|American Express Low Rate Card||$0||8.99%||$270|
#3 Move your car insurance
Car insurance can be a tricky product to compare, given that it depends on many variables involving both the driver and the vehicle.
But whatever the variables, you’ll often find a big discrepancy between the provider with the highest quote and the one with the lowest.
Take compulsory third party insurance, for example. Everyone with a car has to have it, but when we looked at the difference between providers, using my own details, NRMA was $211 more expensive, for exactly the same product.
The moral to the story is that if you shop around when your car insurance is due, instead of automatically renewing with the same provider, you could save a lot of money.
Annual saving: up to $211
|CTP insurance||Annual price|
#4 Switch Bank Accounts
You can save a lot of money by shopping around for a new bank account with no fees or ATM charges.
For example, the ME Bank’s Buck card account has no monthly fees and lets customers use any ATM in Australia for free.
If you compare this account to an average bank account where fees are charged, you’ll quickly see the difference.
Let’s say you use another provider’s ATM once a week at $2.50 a time, that adds up to $130 for the year. The average monthly fee of $5.20 also quickly adds up, after 12 months you’ll be slugged $62.40.
So, all up switching your bank account can save you up to $192.40 a year.
Annual saving: up to $192
|Bank||Monthy fee||Non-bank ATM fee|
|Average bank account||$5.20||Approx. $2.50 per withdrawal|
|ME Bank Buck Card||$0||$0|
#5 Switch phone plans
Another way to save money in 2019 is to switch from a phone plan with a big brand to a similar plan with a lesser-known company.
Let’s say you want a plan with data as well unlimited calls and texts.
The Optus $45 SIM only month-to-month plan is $5 more expensive than the Dodo $40 plan. Switching between these plans would not only save you $5 a month, but also give you 15GB more data each month.
Annual saving: up to $60
|Phone plan||Data||Calls & texts||Monthly price|
|Optus – $45 SIM only month-to-month||3GB||Unlimited||$45|
|Dodo – $40 month-to-month||18GB||Unlimited||$40|