We’re all feeling the pinch, so we went straight to three experts who live, eat and breathe finance.
The result? Some very smart tips from industry leaders to help us all save cash across those ‘big ticket’ costs – think health insurance, energy, and power bills, that little thing called the world wide web (or internet, for those born after 1990), car insurance, home loans and home and contents insurance.
The first tip? Don’t be loyal to your insurer, bank, or utility company.
“It’s called the lazy tax,” explains Adrian Bennett, General Manager – General Insurance, Life & Loans at iSelect. Basically, what happens is your retailer bumps up your premiums automatically each year, issues you a renewal notice and then you, often unsuspectingly, just pay it – not realising you could get a better deal elsewhere. “It really pays to shop around, because many insurers offer new customers a better rate than their existing policy holders.”
Here, some other wise words for wallet wisdom and fast ways to save cash…
How to save money on health insurance
Be honest. Do you know what your health insurance actually covers you for? And are you getting the most out of it? According to the Australian Government, Department of Health and Aged Care, more than half the Australian population – about 13.6 million people – have private health insurance, but many people don’t fully understand what they are getting for their money and what they are covered for. It’s no surprise, really. Health insurance can be one of the trickiest (but necessary, as we enter our golden years) expenses to navigate.
There are various types of hospital and extras cover, all with different waiting periods and out-of-pocket expenses. The first step to hopefully saving some cash is to weigh up what services you actually need, and what you might be able to go without.
“It’s important to review your health insurance policy regularly, particularly if your health needs or life stage have changed,” advises Andres Gutierrez, iSelect’s General Manager – Health Insurance. “Make sure you aren’t paying more for things you don’t need, such as pregnancy cover. Also, opting for a higher excess can bring down your premiums. Don’t be afraid to switch providers as hospital waiting periods you’ve already served are protected by law if you swap to an equal or lower level of cover. Shopping around means you can take advantage of discounts and freebies on offer like weeks free or waived waiting periods on some extras.”
And that’s a nice little extra for you.
How to save money on utility bills
Power, electricity, energy, gas… so many grand titles! And often, a grand or more to pay every quarter for many families. The forecast looks dim, too, with estimated price increases of 19.5 per cent to 23.7 per cent next year for residential customers on standard retail plans in NSW, SA & SE QLD, depending on the region and control load, according to the Australian Energy Regulator.
The good news? “There are a bunch of easy ways to use less energy to help lower your bills,” says Julia Paszka, iSelect’s General Manager – Utilities & Credit Cards. “Think switching off light switches and appliances, washing with cold water, using draught stoppers, and setting your heating to between 18-20 degrees in winter (just one degree higher can add an extra 5-10% to you bill).”
But Julia adds, the real cash saver is choosing the best value energy supplier for your needs. “Changing how much you actually pay for your energy will likely have a bigger impact on your next bill. Energy discounts often expire after a year or two. If you’ve been on the same plan for a while, you could be paying too much. Take the time to shop around for a more competitive deal.”
How to save money on your Internet plan
If surfing the sales, banking and social media are costing you a pretty penny, Julia has a cost-effective insight. “Gone are the days of worrying about your data allowance – these days, most home internet plans have unlimited data,” she says. “Instead, weigh up speed versus price because generally the faster the speed, the more expensive the plan. You might not need as much speed as you think! For example, 15Mbps is often fine for general browsing and email. For most families, a 60Mbps plan is generally enough for streaming and multiple devices. You’ll likely only need a faster plan for online gaming or home businesses.”
How to save money on your car insurance
You’re a great driver, impeccable record but… your car insurance is guzzling more and more each year? It could be that ‘lazy tax’ again. “Auto-renewing can cost you, as insurers often increase premiums each year,” explains iSelect’s Adrian Bennett. “Receiving your premium renewal notice should be your prompt to compare your options with different insurers.”
Shop around. And play with extras. Adrian says the easiest way to reduce your premiums is to opt for a higher excess. “Other ways to save include cutting back on optional extras such as roadside assistance or rental cars, restricting drivers to over a certain age (i.e., over 25), paying your premiums online and paying annually instead of monthly.”
How to save money on your home and contents insurance
According to Adrian, when it comes to home and contents insurance, one of the biggest mistakes customers can make is underestimating the cost to repair, rebuild or replace. “It can be tempting to underinsure to bring down your premiums, but this could end up costing you a lot more should you need to make a claim,” he says. “Look for other ways to reduce your premium, like increasing your excess or installing security features.”
How to save money on your home loan
With the official cash rate higher than it’s been in more than a decade, even a slight reduction to your interest rate can make a significant discount to your monthly repayments, not to mention what you’ll pay over the lifetime of your loan.
For those feeling the pain after rolling off a low fixed mortgage, don’t automatically stick with your current provider. The extra effort of refinancing with a new lender could be well worth it for a lower variable rate.
Visit iSelect to help you compare options from its range of policies and providers.*
*iSelect does not compare all products in the market. The availability of products iSelect compare may change from time to time. Not all products made available from iSelect’s providers are compared by iSelect and due to commercial arrangements, area or availability, not all products compared by iSelect will be available to all customers. Some products and special offers may only be available from iSelect’s call centre or website. Click here to view iSelect’s range of providers.