One year ago, we reassessed all our bills. Could we get a better deal? Was it possible to reduce our expenses? Did we really need a particular service?
Were our finances sustainable?
After all, we had discovered that companies don’t reward you for being a loyal customer. They offer discounts to new customers.
Here’s a summary of what we saved through optimising our expenses during the last 12 months:
|ATM free bank account||$77|
|Netflix and Stan||$239|
|TOTAL SAVINGS for the YEAR||$2,846|
We were able to save almost three thousand dollars on our bills by looking for the best deal.
What this chart doesn’t show is the money saved on the mortgage when we re-contracted with another bank with a much lower interest rate. Over the life of the loan we saved an estimated $50,000 in interest payments.
Now it’s one year on, it’s time for us to reassess our bills.
ATM Free Bank Account
This one surprised me. I knew we were getting slugged $2.50 each time we used certain ATM machines but hadn’t realised how it added up.
Small expenses such as $2.50 really do add up.
We changed over to ING on recommendation of the Barefoot Investor and have been very happy with their service, website and mobile App.
Now when we use an ATM and get the warning that we’ll be charged $2.50 if we continue with the transaction – we don’t care. Because ING instantly puts the $2.50 back in our account.
The same deal applies to international ATM fees when you are overseas and for international transaction fees when shopping online.
We’ll be sticking with our zero ATM fee bank account as you can’t get a better deal than free.
Let me count thee ways a mobile phone contract rips you off.
First, you’ll be overcharged for a phone service contract.
Then you’ll be locked into a contract you can’t get out of without paying excessive fees.
Plus you’ll pay above market price for the privilege of having the latest phone supplied with a contract.
Mobile phone contracts irk me so much that I even have a blog post specially dedicated to them: Telco Rip Off: Are You Getting Screwed.
Mr Hack saved $240 on his bills for the year by changing over to an Aldi pre-paid deal.
My phone contract expires in July. Yay! I’ll be saving an extra $40 per month by changing over to the same deal as Mr Hack. Over the next 12 months the savings will come to a huge $480.
We also have a tablet with it’s own sim card and internet. Whilst it has been handy on the long hospital trips and appointments, we’ve decided to ditch the plan which expires in a week. At $35 per month, it will be another savings of $420 for the year.
If we really need to use the tablet away from home our plan is to hotspot our phone, or take advantage of free wifi.
Our extra mobile savings for the upcoming 12 months will total $900.
Unfortunately, too many Australians pay too much money in fees to their superannuation fund. These fees eat away at the precious retirement nest egg.
My previous super fund was charging me management fees of 0.97% plus account keeping fees of $78.21. This doesn’t seem like much. However, using a $50,000 investment example, it comes to an annual total in fees of $563.21.
My new super fund has management fees of 0.07% which I can tell you is a massive difference from 0.97%. Using the $50,000 example from above, 0.07% equals just $35 for the year in management fees, having a yearly savings of $528.21 (based on the $50K example).
For more information read about the 4 Common Superannuation Errors.
Based on current information, I believe my super fund with 0.07% in management fees is the best deal. I’ll be staying with the fund for the next 12 months, at least until it’s time to reassess our bills again.
Mr Hack’s superannuation fund, whilst not as low as mine, still has reasonable management fees. After re-visiting how his money is invested, he’s decided to change from a balanced investment to an indexed diversified investment within the same fund.
This will drop the superannuation fees from 0.66% down to .16% with an annual savings of $950. It’s also a safe change (as safe as the stock market can be) as the money will be invested in Vanguard index fund shares.
My previous superannuation woes didn’t end there. I found out I was paying for income protection insurance, total and permanent disability insurance, and life insurance through my superannuation that I wasn’t entitled to claim.
I’ve since changed over to a non-superannuation company for my personal insurance purposes where the policies are underwritten (guaranteed).
It was a hassle to get three quotes and compare what they offered. Then I had to complete an extensive 45 minute health questionnaire by phone, some more questions, then waiting. It was not a quick process but I’m glad I persevered as it gives me peace of mind that my family will be financially protected if I pass away while we have debt.
I’ve decided to stay with my personal insurance policy for now due to complexities of changing to a new policy.
Thankfully, Mr Hack’s superannuation includes insurance policies that he is entitled to claim. Although, it did take some research and a phone call to reach this conclusion.
Electricity and Gas
These two companies are some of the worst offenders for not looking after their loyal customers.
If you’re not locked into a contract, do an energy provider comparison now and get into a cheaper deal.
In Victoria, go to the government Energy Compare website. You’ll get a cheque for $50 posted to you just for using the website – no joke!
Not only did we pocket the $50 we also saved an estimated $1330 for the year.
For detailed instructions on how to get a better deal go to Reduce Your Power Bill: Find Out How.
We’ve used the Energy Compare website again now it’s been 12 months. What we’ve found is we are still on the best deal for our region.
We’ll stay with what we’ve got for the next 12 months.
Reducing this bill was a simple matter of shopping around – and extended phone calls with insurance providers.
One trick we learnt from reading the Barefoot Investor is to up your excess.
The excess is the amount of money you have to pay in the event of needing to claim your insurance.
The beauty of upping your excess is that it reduces your premium – the annual amount payable to the insurance company.
You know you’ll need to pay the premium every year so it makes sense to get that cost reduced. However, you may never need to pay the excess.
In the event that you do need to pay the excess, then your emergency fund or MOJO will have it covered.
If you’re not familiar with the bucket system and the MOJO account read Barefoot Budgeting: Understanding The Buckets.
I really didn’t think we could save any more on our home insurance. The first two quotes to reassess our policy came at $208 p/m and 199.91 p/m. We are currently paying $82.29 p/m.
Then came the biggest surprise – a quote for just $58.51 per month as it included a new customer 15% discount. This gives us another saving of $285.36 for the year.
Car insurance savings can be made in much the same way as house insurance.
- Get three quotes and compare offers
- Up the excess to reduce the yearly premium
- Pay annually rather than by the month
It’s important to ensure your details are up to date. Changes in circumstances such as paying off a car loan or moving to another area may decrease your premium.
Mr Hack recently re-assessed his car insurance. As his car is getting older, he made the decision to no longer pay for comprehensive insurance. This change resulted in a much cheaper car insurance bill, saving us another $159 for the year.
For reassessing my car insurance, I did a web search for Canstar car insurance to streamline my choices to their recommended top three car insurance agencies.
Currently I’m with AAMI at $37.24 per month (as they were the cheapest when optimising our bills 12 months ago). Our goal is to pay annually rather than monthly as it’s cheaper, however annual payments will need to wait until tax time. (After then we’ll be able to put aside a weekly amount to cover the next round of annual bills.)
Collecting three online quotes was very easy and fairly quick. Here’s the results:
- $44.04 p/m Virgin Money
- $42.47 p/m Budget Direct
- $33.09 p/m Woolworths Insurance
It turns out that car insurance through Woolworths is $4.15 per month cheaper than my current policy with AAMI.
I then rang AAMI to see if they could match the Woolworths Insurance quote and they agreed to drop my premium to $33.97 p/m. Saving $39.24 for the year without having to change policies.
Netflix and Stan
Have we missed this?
Not one bit.
If we do want to watch something on the TV we still have the Fetch box which is free with our home wifi. Every day there is a new movie loaded into the Movie Box. There is also catch up TV (where we find most of our viewing) and YouTube (where the kids do their viewing). For a while, our local library also had free online streamed movies.
Our teenager (about to be an adult) now has her own personal Stan account and that’s her choice to make.
Would I subscribe to Netflix or Stan again – no. Definitely not interested in those bills.
Our Projected 2019/2020 Savings
Over the next 12 months, we project we will save another $2,333 by optimising our bills.
This is on top of savings already in place such as having ATM fee free banking, lower superannuation fees, reduced electricity and gas bills, and by not subscribing to Netflix or Stan.
|TOTAL PROJECTED SAVINGS for 2019/2020||$2,333|
What Can You Do?
It’s likely you too will be able to save money on your bills. Have a read through the list and see if there are any areas you can change to save money.
- Do you reassess your bills on a regular basis to ensure you are getting the best deal?
- Are you being charged for ATM fees or international transaction fees?
- Have you looked around for the best mobile phone deal?
- Is your superannuation fund overcharging you in fees?
- Can you get a better deal on your personal insurance?
- Have you compared electricity and gas provider prices?
- Did you get three quotes to compare for your car and house insurance?
- Is it an option for you to increase the excess to reduce the premium on your car and house insurance?
- Do you really need paid subscriptions to things like Netflix or Stan?
It’s well worth your financial sustainability to optimise your bills. By reducing your daily living expenses you’ll have more money for the things that really matter in life.