It’s often referred to as ‘the lazy tax’ but reviewing your expenses and shopping around can save you a lot of cash is the long run and we spoke to two financial experts to get their fast, hot tips.
Women face extra challenges when it comes to putting money aside for a rainy day. This includes lower pay, more time out of the workforce to little ones, and costs of running a single-parent household.
We even live longer than men which is another reason why that nest egg is needed.
New research released in April by Rice Warner shows men aged between 30 and 60 have retirement savings worth 42 per cent more than women the same age.
Finance guru Natasha Janssens saved $18,000 over one year when she did it herself and says it’s not (too) hard to do the same.
1. Review your regular bills
Between private health insurance, home and contents insurance, phone bills and energy bills, Janssens was able to save over $6,000. She took some time to analyse what she was actually using, what she needed and what competitors were offering. Some simple calling around resulted in big savings.
Janssens dropped the health cover on extras she wasn’t using and found better deals with reputable companies for her home and contents insurance, phone bill and energy bill.
“The home and contents insurance floored me the most. When we first joined our insurance provider, for a long time they were by far the most competitive around, and this meant that we got a little complacent with comparing quotes for a couple of years,” she said.
You can imagine my shock after I rang an equally reputable company to find our monthly home and contents premiums dropping from $192 to $77 a month for the exact same cover.
2. Renegotiate your mortgage
A simple call to the bank got Janssens’ home loan interest rate from 4.2 per cent to 3.79 per cent. It saved her $1500 off her mortgage repayments for the year.
3. Reduce how many cars you have (if possible)
Janssens and her husband had two cars but by selling one and giving each other lifts instead, they were able to save $4000 a year when factoring in parking, insurance, registration and maintenance.
If you really feel you can’t do without the second car, try taking a look at what your cars cost to run. Often by switching to a smaller and more economical car, you can stand to save just as much.
4. Plan your meals instead of buying food out
We all know buying food out is far more convenient that meal prepping and it’s often one of the biggest struggles. Yet by shopping more often at Aldi, making better use of the slow cooker, cooking in bulk and buying one less takeaway dinner a week, Janssens was able to save $5200.
Foodwise Australia estimated the average household throws out a good $1000 a year worth of food so it’s also worth trying to use up what you have in your fridge instead of chucking it out.
5. Declutter all of the things you don’t need
If you have children, you will know all too well that clutter comes along with them. Janssens sold all of the items they no longer use, such as pre-baby work clothes and baby item that her children had outgrown. She also got rid of a large outdoor entertainment setting, a dining table, gadgets and old phones. Doing this got her $1600.
Aside from looking at where you can save and taking advantage of it, there are other changes you can make to ensure you’re making the most of your money according to Paridhi Jain, founder of the money school for adults, SkilledSmart.
6. Track your expenses so you know where your money is going
Jain said if you have no idea where your money goes each month, tracking your expenses is one of the best things you can do to improve your finances.
“Without knowing where your money is going, there is no way to know where you have opportunities to improve,” she said.
It can be confronting at first, but taking the time to track your expenses will give you transparency and a sense of control.
7. Prioritise paying off your credit card debt and have a specific time-frame for achieving that goal
Sometimes, credit card debt can become like dirty laundry: something you keep putting off and avoiding dealing with. Yet unfortunately, this has very expensive consequences, with debts piling up until they’re unmanageable.
“A great way to pay down credit card debt is to set yourself a specific time-frame that you want to become debt-free in. Setting a specific (but realistic) time-frame around your goal can be great for motivation,” Jain said.
“Once you’ve set the goal and the time-frame, start making a list of everything you can do to make your goal your number one financial priority. Remember, this isn’t forever! It’s just until you hit your goal within your designated time-frame.”
8. When you save some money, put it aside in a separate account
For example; if you stopped yourself from buying something for $50, or you got a tax refund of $500, or you worked an extra shift and made an extra $100.
You haven’t actually saved that money until you’ve put it in your savings account. If you don’t physically put that money away, it will probably just get spent on something else and at the end of the year you won’t see your savings grow.
Make a habit of putting extra change or money into a separate savings account that you cannot spend easily.