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6 simple tips to make your dollar go the extra mile

A little housekeeping on personal finances can pay dividends.

When it comes to personal finances, it can be tempting to fall into a ‘set and forget’ mode. From savings to insurance, home loans to superannuation, Australians should review these periodically to ensure they’re getting the best value for their needs.

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Rather than sweep a financial mess under a rug, now is a good time to spring into cleaning mode and dust off those savings plans. Online home loan platform, Lendi, shares six simple yet effective tips to help Australians tidy up their personal finances and maximise their returns:

#1. Use a savings account

Savings accounts can help people reach their financial goals, whether it’s for a vacation or a rainy day, yet it’s often neglected once it’s up and running. Make every dollar stretch and compare current savings accounts against other products in the market.

Look for ongoing high interest rates, low account fees as well as easy access to ATMs and service. Using different banks for savings and day to day accounts may act as a deterrent to moving funds around, as transferring cash between different banks takes at least 24 hours to complete.

Read our guide to offset accounts.

#2. Maximise your superannuation

Maximise superannuation by reviewing the current super provider against other options in the market. Similar to savings, look for a fund with high interest rates and low account fees. Consolidate any lost super into one account, as keeping multiple funds active - each with its own set of fees - can put a significant dent in the total retirement contributions.

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#3. Review your budget

Refresh budgets from time to time. Household income and expenses can shift when there’s big change at home, such as the arrival of a new family member or a new job. With lots of budget management tools available, it’s a matter of finding one that works well for each person. Distinguishing between ‘needs’ and ‘wants’ can also minimise impulse purchases.

#4. Check your credit cards

Credit cards generally come with annual fees and high interest rates, which can add up. Consider whether it’s necessary to have multiple credit cards and cancel ones that aren’t used regularly.

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#5. Consolidate debt

Consolidate high interest debts - like car loans and personal loans - into the mortgage as this can help reduce overall repayments. For more information, read our guide to debt consolidation.

#6. Shop around for a home loan

Reassess the home loan as this can save homeowners thousands of dollars each year. Banks don’t tend to reward customers for loyalty, so it pays to shop around. In fact, new research from Lendi showed that 82 per cent of borrowers who settled their home loans in July 2018 opted for smaller lenders and often for a more competitive rate*.

David Hyman, managing director and co-founder of Lendi, commented:

“The gift-giving, food and festivities during Christmas can leave a substantial impact on your budget. This makes spring a great time to whip personal finances into shape and start making positive, incremental changes to help Australians be well-prepared ahead of the holiday season.

“Negotiating a better interest rate and home loan package could save borrowers over $6,000 by next Christmas**, making this a strong incentive to research and review home loan options.

“For those who are time-poor or prefer negotiating directly with a bank, engaging with a home loan specialist can fast-track the process. Just make sure they’re assessing loan options across the whole market,” continued Hyman.

**Independent data based on a total of 1,273 Australians who settled their home loans using the Lendi platform during July 2018.

*Calculation based on rates from 37 Australian banks and non-bank lenders including the Big Four (as at 23 August 2018). The difference between the highest and lowest interest rates (5.74% vs 3.58%) for the average home loan was then aggregated over the life of a 30-year P&I owner occupier loan. Average home loan size of $396,600 according to ABS, June 2018.

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Tags: standard variable rate, refinance, low interest, big 4 banks

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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