May 16th 2024.
The federal budget has placed a heavy focus on household spending and the rising cost of living, which has been a major concern for many Aussie families. In an effort to alleviate some of the financial burden, 9news.com.au has teamed up with finance expert Joel Gibson to provide helpful tips for budget-conscious families.
Even if your budget is stretched thin, there are often opportunities to save money. Gibson, who is well-versed in finding hidden savings in weekly bills, recently put his skills to the test for a family of four. Erin*, a 35-year-old mother living in Sydney with her husband and two young daughters, works hard to provide for her family. However, their average weekly spending of $2521 is taking a toll on their finances. A large portion of this amount is dedicated to mortgage repayments, and the couple also spends a significant amount on daycare to allow them to work full-time.
After carefully examining Erin's bills, Gibson discovered that loyalty could work in her favor. He recommended shopping around for insurance policies, energy plans, and telco plans, as remaining with the same company for years could mean missing out on potential savings. If switching to a different brand is not an option, Gibson suggests using the threat of switching as leverage to negotiate better deals, especially for their mortgage.
Gibson has taken a closer look at the family's weekly bills and provided some useful tips for reducing costs. Their mortgage costs $5777 per month, which amounts to $1375.50 per week. They also pay $2100 per annum for rates, $40.40 per week for electricity, $450 per quarter for water, and $80 per month for internet. In addition, they have various insurance premiums, including home insurance for $1875 per annum, contents insurance for $666 per annum, and car insurance for $1829 per annum. They also pay $318 per month for health insurance, $300 for groceries, and $58 per month for their phone plan. On top of that, they have a few other expenses such as car registration, daycare, petrol, gym membership, swimming lessons, and tolls.
Erin's total weekly bills add up to $2521, which is a considerable amount. However, Gibson has identified several areas where the family can save money. For starters, they can potentially save thousands of dollars on their car and home insurance by switching to a different provider. Gibson explains that insurance companies often increase premiums for loyal customers, which is known as "price walking." By shopping around and comparing quotes from different brands, the family may be able to negotiate better deals and potentially save up to 54% on their car insurance, as Gibson did for another client.
Energy is another area where the family can cut expenses. Despite receiving a $300 energy rebate from the government, Gibson believes there are still significant savings to be had. He suggests checking the "better offer message" on their power bill, which informs customers of cheaper plans based on their past usage. By switching back to their previous plan, the family could save up to $391 per year. However, they could save even more by switching providers, with some retailers offering solar plans that are over $500 cheaper per year.
When it comes to their telco plan, the family is currently paying $29 per month for 25GB of data with Aldi Mobile. While this is one of the cheapest plans on the Telstra network, Gibson believes they could potentially save over $200 by switching to providers on the Optus or Vodafone networks. Additionally, switching to a cheaper NBN plan or exploring other options such as 5G home internet could also result in significant savings.
Gibson also suggests checking if their health insurance policy includes coverage for swimming lessons, as some providers offer rebates of up to $200 per year. Furthermore, eligible motorists in NSW can claim a toll rebate of up to 40% or $802 in the 2023-24 financial year, which could result in savings of up to $800 per year.
Lastly, Gibson advises Erin to contact her lender and see if they can match the lower interest rates offered by other banks. He recommends negotiating with the lender by informing them of lower rates and requesting the best deal possible before considering switching to a different mortgage provider.
In conclusion, Gibson's expert advice has identified several areas where the family can potentially save thousands of dollars per year. By being proactive and exploring different options, Erin and her family can ease the financial burden and have more wiggle room in their budget. As Gibson always says, "easy money is just money you didn't know you had."
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