Spring clean your finances!

Ways to save money nowIt’s Spring! And it’s also Money Week. So right there are two very good reasons to kickstart your motivation and give your money habits a bit of a spring clean. So let’s look at…

The money you earn

Yes we all earn money some way or another – but where do you put it when you receive it?

How many bank accounts do you have? Are they the best value? At CANSTAR we have calculated that fees on typical deposit accounts are as follows:

  • Monthly account keeping fees, the average fee is $2.67 among personal transaction account
  • Branch cash deposit or withdrawal fees, the average fee is $0.53 for deposits and $0.92 for withdrawals
  • ATM withdrawal fee, the average is $0.23
  • Internet BPAY fees, the average is $0.22
  • EFTPOS transaction fee, the average is $0.23

Individually those fees may not sound like much but collectively they can add up to a fair bit over the course of a year. Multiply that over a few accounts and you could be shelling out a fortune, so focus on the cost-effectiveness of your deposit accounts.

The money you spend

A few areas where you could save money include:

Groceries

For the average family with children, groceries are one of the highest weekly costs, topped probably only by the mortgage. There are plenty of ways to cut back though, including:

Write a weekly menu: Simply knowing what you plan on cooking for dinner each night not only relieves stress but helps you to avoid unhealthy (and expensive) takeaway.

Write a shopping list: How often do you come home from the shops only to find that you’ve forgotten an essential ingredient – or that you’ve bought ten items that you didn’t need? Whether you keep a running list on the fridge or use a mobile phone app (I use a free one called “ShopShop”), sticking to a shopping list prevents waste.

Shop around: Whether it’s one supermarket instead of another, or own-label instead of premium brand, changing your shopping habits can save heaps.

Cutting just ten percent from your food bill – and come on, we call all do that – could save you some handy cash.

Credit cards

We collectively owe a few billion – yes, that’s with a “B” – on credit cards at the moment that is accruing interest. Stop giving the bank your hard-earned money! The average credit card interest rate, calculated by CANSTAR, is 19.11%.  So:

Switch to a low-rate card: That simple act of switching from, say a 20% interest rate to a 14% interest rate could save you some useful cash in interest costs each year.

Take advantage of an introductory offer: Some cards offer a low to almost no interest rate for the first twelve months. So taking advantage of an introductory offer and setting up a repayment plan to get your card paid off in full could save even more.

Roll it into your mortgage. If you have a mortgage then transferring your credit card balance into it – and cancelling the cards – can save you interest repayments each year. The trick, though, is to slightly increase your mortgage repayment to cover the additional debt – otherwise it could end up costing more.

Your protection

You can work hard and play hard, but if you fall hard you don’t want to lose it all. Make sure you have the right amount of personal insurance as well as motor vehicle insurance and home and contents if applicable. Some estate planning wouldn’t go astray either.

Finally, spring clean your budget. Write a budget based on your real-life earning and spending habits. Knowing how much you earn and where you spend is vital, especially with around the corner.

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