Spring is slowly but surely starting to roll around, and what better time to assess your finances and see where you can make changes. You might be surprised at how much money you can save if you take the time to sit down and work out where you could be getting a better deal.
Here are 6 ways to spring clean your finances:
If you have private health insurance, it’s a good idea to review it this spring and see if it is still the most competitive and suitable option for you. Private health insurance providers constantly change and update their types of cover and regularly promote offers for joining, so there’s a chance that you could get a better deal if you look for one.
There’s also a chance that your circumstances have changed and you would like to extend your insurance to cover extras that weren’t previously covered. It is especially important to renew your health cover as you age and go through new life phases.
For example, if you are planning a pregnancy, you might like to alter your cover to include pregnancy and birth cover. This will usually mean that you can go to in a private hospital and choose your obstetrician who will be with you throughout your pregnancy.
Or, you may be getting to a stage in your life where your eyesight is declining and you might like to get eye and optical cover.
If you’d like to compare policies, you can do so through the Federal Government’s Private Health search function.
As with your health insurance, it’s a good idea to ensure your home loan suits your current circumstances. New products flood the market each year so there’s a good chance that the home loan you received 10 years ago is no longer the right one for you.
You may be earning more than you were when you first got your loan and can afford to pay it off a little more aggressively, or your credit score may have significantly improved. In this case, you may want to consider switching to a home loan with a lower variable interest rate and additional features such as an offset account (if you aren’t already on one).
Most variable rate home loans allow you to make uncapped additional repayments on your loan and ultimately help you pay off your home loan faster.
Fixed interest rate loans can be great for stability and budgeting, but they generally do not allow for uncapped extra repayments without charging you fees.
It’s also worth keeping an eye on the interest rates offered by different lenders. While a low interest rate shouldn’t be the only reason you refinance to a new loan, it can help you save a lot of money over time.
Find out how much you could save each month.
In 2019, it’s fair to say that we are mad on subscriptions. Gone are the days of relying on free-to-air TV, CDs and radio to stay entertained ― entertainment subscriptions are in.
It’s not just a case of simply having a Spotify and Netflix account, many people are subscribing to multiple music and video streaming services at once.
And, don't forget about gym memberships. If you're regularly using it, great, but if you are barely getting to the gym once a week, it may be time to reconsider your membership. Even if you are a gym-lover, check if you can save by switching to a different membership or a different gym altogether.
If you want to save money and reduce your expenses, you might need to think about the subscriptions and memberships you actually use and which are worth keeping.
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For those who are serious about saving money and becoming a smarter spender, it’s a good idea to create a budget. While it might be tedious at first, creating a budget can help you organise your income and expenses and identify places where you could make changes.
To make your budget, there are a number of online budget generators and templates you can use. ASIC’s Moneysmart Budget planner is a free tool to help you better manage your money.
Creating a budget can help you understand where your money is going. It can be quite confronting to look at your expenses laid out in front of you and you might be surprised at where your money goes.
There are a few methods you can adopt to keep track of your expenses and make sure you are sticking with your budget. You can opt for a traditional budget journal method where you write down every single expense (yep, every coffee).
Or, you could use a free app like Pocketbook which you can sync with your bank accounts, credit cards and loans to automatically enter card expenses and assist you with budgeting. It can sort and categorise your expenses so you can easily see how much you are spending on things like food, clothes and car expenses. You could also use Spendee Basic which has a free package and is easier to use around the world and across multiple currencies.
Most credit cards and smaller loans (e.g. car loans, personal loans) have high interest rates that can lead to you paying a lot more in the long run. If you have accumulated credit card debt or have existing high-interest loans, it’s a good idea to focus your efforts on paying them off.
A good way to do this is by creating a solid debt repayment plan. Start by listing your debts and figuring out which debts you need to prioritise paying off.
It might be less overwhelming to start by paying off the smallest debts first. You could also choose to focus on paying off the debt with the highest interest rate.
Often once you pay off one form of debt, you gain a bit of momentum and a stronger desire to pay off the rest. Another thing to do when trying to pay off debt is to stop adding to it. If you already have debt on a credit card, don’t keep using it for everyday expenses.
When making repayments on your small personal loans, try to pay more than just the minimum amount to speed up the process and avoid paying more interest than you have to.
If you have multiple forms of debt, you might want to consider debt consolidation. Debt consolidation can mean that you streamline all your debts (e.g. credit cards, personal loans, car loans) into your single home loan.
This can help you save money and budget better by only having to make one debt repayment per month. Interest rates for home loans will usually be much lower than your other debt so you could save on interest over time.
By spring cleaning your finances, you can alleviate a lot of stress. A little bit of tidying now could help you save a lot of money and frustration over time. Get a handle on your finances today!
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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.
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