Trying to save money or pay off debt can often seem like a huge challenge but there are easy ways to find extra cash without even noticing it. These are five money mistakes that most people are making and that are costing you thousands of dollars.
What could you do with an extra $500, $1000, $3000? Correct these simple mistakes and you could have that extra cash in your bank account without even trying!
Money Mistake One: Having the wrong home loan
If you’ve got a mortgage of $450,000 (the average Australian mortgage) then a 1.5% drop in your interest rate could save you $6750 a year. Yes, you read that correctly! Even changing to a mortgage that gives you a 0.5% better interest rate could save you $2250.
Have an even bigger mortgage (thank you Sydney)? What about a saving of $10,000 a year? Umm, yes please!
Money Mistake Two: Not getting the best deal on insurances
Insurance prices change every year. If you’ve just been renewing for the last few years, without comparing your options, then chances are you are paying too much.
On average I manage to save $20-$30 per month per insurance each year by shopping around (compared to the new quote I’m given by my current insurer). Often you can take a quote you’ve been given by a competitor back to your insurer and get them to match it.
If you save $20 a month on three different polices (home, car, health etc) then that could add up to more than $700 a year. If it has been a while since you compared then my guess would be you’ll be able to save more than $1000!
Money Mistake Three: Shopping without a list
If you head to the supermarket without a list each week then you can be guaranteed to buy stuff you don’t need (and forget stuff you do)! You will also spend more. Much more!
Meal plan and then shop with a list. You can find my families meal plans here and sign up to receive the newsletter for a new one each week.
Estimated saving: $50+ a week ($2600 a year)!
Money Mistake Four: Buying lunch every day
$10 a day on lunch, five days a week, adds up to $2600 a year. Even if you only make lunch three days a week, and buy two days, you’ll still save over $1500 in a year. We just booked return flights to Fiji for four of us for less than that!
Money Mistake Five: Not paying your bills on time
Many utility companies offer a discount of up to 10% for paying your bill early or on time and most companies add a late fee or interest for paying late. The same applied to credit cards where missing you payment deadline can result in additional interest or late fees.
Avoid additional charges and take advantage of discounts by paying bills automatically or as soon as they arrive or by setting a reminder on your phone or computer a few days before a bill is due. Also be aware of overdraft fees changed for allowing your accounts to get overdrawn.
$50 a month in saved late fees, overdraft fees or discounts for paying early adds up to $600. Not a bad effort for pretty minimal work.
What areas do you find it easy to make mistakes and waste money? Do you have any helpful ideas to add? I’d love to hear from you! Comment below.
meal plans save you heaps. Less wastage of food and money.
I pay the bills and debts twice a month, when I receive the paychecks. I use 2 credit cards to autopay most of bills, to earn points and miles. First week of the month, I pay for the bills and credit card debt that are due between 5th and 20th. Third week of the month, I pay for the bills & credit card debt that are due between 21st and 4th. No missed payments.
I just recently changed over all my insurance after having the same carrier for years. I did save a lot of money, which I will be paying back out to them now that my son just got his learner’s permit (sigh), but at least I got a savings for a few months. But it was quite a process. They play little games by increasing the homeowners rate on one while over here they have a higher auto rate, and a higher RV rate over there. I’m a financial analyst and I finally had to construct a spreadsheet to figure out which one of the five companies I had contacted was the better overall deal. But for a $100/month savings, it was definitely worth the time and effort. For my bills, I have a double-minimum strategy that avoids late payments – I pay the minimum amount on each bi-weekly pay day. Then I get them paid down twice as fast and they can never hit me with a late fee because I keep a steady stream of payments coming at them.
I actually have our insurances with a number of different companies. We have two cars, both with different companies then our home insurance with another company again and same with our health insurance. The same company isn’t always best for all I’ve found.