Australian consumers and households pay out thousands of dollars in unnecessary bank fees, higher bills and by simply being too lazy to change the status quo.
According to RateCity, Aussies paid a whopping $4.33 billion in avoidable bank fees last year. That's a 3% rise – or $121.7 million – compared to 2014. And the total amount could have been avoided, if consumers had switched to products that don't charge ongoing fees or simply avoiding late payment charges.
The banks hauled in $1.5 billion alone from credit cards thanks to cash advance fees, late payment fees and annual fees. But there are plenty of credit cards that don't charge annual fees; consumers could pay their bills on time, or switch to Mastercard and Visa debit cards instead.
Here are 10 simple ways you can save thousands each year…
- Pay your bills on time or earlier. Simply paying your utility bills on time can see consumers get a discount on their total bill too.
- If you own a credit card, and many of us do, focus on paying down the balance and at least the minimum – especially with many credit cards charging around 20% interest rates. According to ASIC's MoneySmart website, Australians have $32 billion owing on credit cards – or around $4,300 per card holder, with the average interest paid each year of $700.
- Don't automatically accept your annual insurance notices and shop around, whether it's for income insurance, home and contents insurance, car insurance or CTP. Many insurers whack up premiums each year, but consumers don't realise because they don't see what the difference is compared to the previous year.
One thing that could help is showing consumers their previous year's premium – something the UK is implementing in the hope that it will force consumers to shop around. - That goes for your mortgage too. The big four banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) typically charge higher rates than other smaller banks and non-bank lenders, but consumers could save thousands by switching their mortgage to a lower rate – or even ringing their bank and asking for a better rate, if they think they are being ripped off.
- Shop around for your utility and power bills as providers can and do offer incentives to switch.
- When it comes to investing, you could save yourself thousands each year if you switch your investments to low fee products such as exchange traded funds from higher fee actively managed funds.
- Your superannuation could also benefit too by switching to a low-cost industry fund from a retail fund, and the better performance should also benefit your future self.
- If you don't have a weekly/monthly budget, start one. The simple act of tracking what you spend your cash on will help most people identify areas of savings whether its overspending on entertainment, personal wants or eating out.
- If you have a Foxtel movies package, consider that you could probably subscribe to both Netflix and Stan for less than the usual monthly price Foxtel will charge you. A Foxtel movies package costs around $20 a month as an add-on. Netflix costs between $8.99 and $14.99.
- Discover the sharing economy. Check out staying at AirBnB instead of hotels if you are going on holidays and using Uber ride-sharing instead of taxi cabs. Both can offer substantial savings over traditional products.
Foolish takeaway
Consumers and households could save themselves hundreds, if not thousands of dollars following the simple tips above – many of which don't require extra expense – but possibly just our time.
