Private health insurance, power bills and school fees are just some of those household costs that keep going up and up, and yet many of us keep do nothing about it.
Note to self: It’s time to take action!
Compared to the latest overall inflation figure of 1.9 per cent for the year, electricity prices have gone up roughly 12 per cent, while secondary education is up about 4 per cent, according to the Australian Bureau of Statistics. Private health insurance is also expected to go up by about 4 per cent this year.
At the same time wages growth is at a record low, which means that most households aren’t getting in a lot of extra income from their day jobs to pay for these price pressures.
From all the money experts we interview at Financy the one common sense approach that we can all take to manage what’s happening is to shop around for the best deal.
Problem is that it all takes work, and that involves a lot of research, time, patience, time and sheer tenacity to sit on the other end of a phone line or internet connection as you try to negotiate a better deal without losing your marbles.
But the painful fact of the matter is, that if you really want to improve your household cashflow position, then you have to get engaged with your money and know what you are paying and if you’re not happy, start shopping for the best deal and then switch to it.
In short, the best tips we’ve found for getting your household cashflow issues in order involve just three simple steps.
Make time – allocate at least half of your day to doing the leg work and that involves; research and making calls. If you can’t do this, start shooting off emails or taking small bite size steps towards getting the best deal.
Negotiate hard or walk – Be prepared to ask for a better deal, and if you don’t get it, be prepared to walk. But just make sure you actually have a better deal out there before you cut off energy or insurances. Also a good complaint letter can go a long way.
Think twice about direct debit – Automatic payments can be fantastic for the busy person, but often they make us less engaged with our money. Try to treat all paper and electronic payments the same and actually review what you are spending and whether it is what you signed up to spend. If there’s an overpayment, do something about it.
According to comparison site Mozo.com.au the biggest financial mistake costing most Australians make is sticking with the same provider, regardless of whether they’re on the best deal or not. Mozo calculates the cost of failing to shop around for a better mortgage deal is $2,016 each year for the average home borrower.
Here’s a list of the other mistakes we commonly make.
Top financial mistakes costing Australians every year
|Cost per year|
|Not shopping around for a better mortgage deal||$2,016|
|Carry a balance on a credit card||$702|
|Not shopping around for a better energy plan||$643|
|Paying unnecessary bank fees||$477|
|Settling for an average savings account||$296|