saving money on a piggy-bank on the grass isolated on a white background
Want to make $9,000 by doing a couple of hours work?

Here, we show you how an ordinary household shaved almost $9,000 per year off their household expenses…. …without giving up a single thing! And the best thing is, once you’ve spent a couple of hours researching and organising, it’s done – no ongoing time commitment!

Sound too good to be true? Well, it isn’t! Have a look at the steps below.

  1. Make a list of all debts, repayments, direct debits – anything you regularly have to pay or that comes out of your bank account automatically. You list could look something like this:
  • Private health insurance
  • Credit Card repayment
  • Car loan
  • Gym membership
  • Charitable donations
  • Life Insurance
  • Car insurance
  • Home and Contents insurance
  • Telephone
  • Internet
  • Foxtel
  • Netflix

 

  1. Next, strike through expenses you can’t eliminate (such as your car loan) and expenses you use, but know you can’t reduce (for example, Netflix…who can live without Netflix?)

Your list now might look like this:

  • Private health insurance
  • Credit Card repayment
  • Car loan
  • Gym membership
  • Charitable donations
  • Life Insurance
  • Car insurance
  • Home and Contents insurance
  • Telephone
  • Internet
  • Foxtel
  • Netflix

 

  1. Now, it’s the fun part…

You might be surprised at some or all of the items on the list being expenses you can reduce, but believe me – it’s possible (and the below example will show you how)!

 Private Health Insurance

If you have hospital and extras cover, you can save a substantial amount of money here.

Login online or call your provider and ask them the amount they paid out for your extras cover last year (now is a great time to do it because your limits all reset on 1 January each year). Then, ask them how much you paid for extras cover that year… it’s likely that the amount they paid out compared to the amount you paid them is firmly in their favour.  If that’s the case – cancel your extras cover and just pay for services like optical and chiro when you need them. Otherwise, you may be able to select a cheaper extras package where you can select 4 services to be covered instead of the whole range…if you have comprehensive extras cover, you’re most likely paying for a whole lot of things you’ll never use (for us, it’s things like natural therapies and pharmacy).

You can also save some extra money by increasing the excess on your hospital cover – there’s a big difference in premium between a $250 and a $500 excess, so you’re better off choosing the higher excess and paying when/if you need to rather than paying additional premiums each month for something you may never use.

If you’re gone through this exercise, you’ve probably saved quite a bit of money here. You can choose to either stay with your current provider on the reduced rate and take the money and run OR if you’re really keen, you can go one step further and look for another provider to see if they can beat your current deal.

Here, our example family saved $66 per month which works out to be $792 per year just by increasing their excess and switching to a nominated 4 extras instead of a full extras package!

Home, Contents, Car insurance

Essentially, you can do the same as the above with your home and contents insurance – look at what you’re paying for that don’t use.

For example, accidental breakage is something that most people don’t use because the thing that breaks isn’t worth much more than the excess…so why pay for it ‘just in case’? With all the money you’ll be saving, you can just pay to replace a tv or iphone it if/when it breaks rather than by paying for the extra premium each year.

Here, our family saved $58 per month on home and contents insurance by switching to another provider and choosing a policy without ‘accidental damage’ cover.

Car insurance – same deal, don’t pay for extras like hire car cover and extra windscreens…lower your premium and pay for those items only  if and when you need them. In all my years of driving I’ve only ever needed to replace one windscreen and from memory it cost me about $250…

By switching insurers to a ‘no frills’ policy, our example family saved $50 per month on car insurance for two cars…which is a saving of $600 per year. Not bad for less than an hour’s worth of telephone calls and emails…

So, annually, by switching home and contents and car insurance, our family saved which is a saving of $1,296 per year. Not bad for about half an hour’s worth of telephone calls and emails…

Telephone, Internet, Gym Memberships

You can apply the same principles as above to your telephone, internet, gym memberships and Foxtel. Go forth and save some cash…you’re welcome.

With the Foxtel and gym membership – really ask yourself if you use it and get benefit out of it. For me, I cancelled my gym membership because, to be honest, I hardly ever used it and prefer to do some different exercise. Be honest with yourself and if you don’t use it, don’t pay for it (just don’t spend the extra money you’ve saved on cake and icecream).

 

Credit Cards

Do you have low rate credit cards? Ditch the rewards points and go for the lowest rate possible.

Do some research online and see if your credit card provider has a card with a lower rate than the one you’re on. If you’re carrying some credit card debt, you really need to pay that off…so call your provider and ask them if they can switch the debt to a lower rate card. Our example family did this, and saved $230 per month on the minimum repayment of a reasonably hefty credit card debt. That’s a saving of $2,760 a year extra that they can pay directly off the debt of the credit card per year without contributing one extra cent to their current repay,e

If your provider won’t do that, have a look around for a 0% balance transfer but MAKE SURE YOU PAY IT OFF IN THE TIME PERIOD or you’ll be stung with extra interest.

Mortgage interest rate

Did you know you can call your current home loan provider and ask them if they have a better deal for you? Our family did this and saved $54 per month.

If you want to get an even better deal, you could think about switching banks altogether, there’s often great introductory deals for new customers, and with current low interest rates, there are some great deals which could save you thousands in extra interest each year.

Charitable Donations

I’ll start this by saying that it is great to donate to charities we care about – and charities do a lot of good in our community. BUT if you’ve signed up to a monthly direct debit for charity (or three) and you have debt you’re trying to pay off…you should consider cancelling it just for now.

By all means, donate to charity, but consider making your donations in cash when you know you have the money spare and not as an automatic monthly commitment.

Our family was donating almost $1,000 per year through direct debit donations in addition to extra cash donations while they were carrying a huge credit card debt…by cancelling the direct debit donations they reduced their monthly expenses and can divert that money to paying off their credit card debt.

 

Your list

Your list might look the same or a bit different to this one – but we highly recommend you go through the exercise. The start of a year is a great time to go through this process and see where and how you can save some money and improve your financial position. Think about what you could do with the extra money – like going on a family holiday or paying out some debts, all with just a couple of hours of work!

We’d love to hear about your results after you go through this process, so please leave a comment below.

 

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