Start the New Year with more money in your pocket by making some simple changes to your budget in 2021.
With JobKeeper and JobSeeker cuts about to kick in, millions of Australians will be starting 2021 on the back foot.
However, there are steps you can take to get your finances in the best shape possible, potentially saving as much as $4,098.
Potential annual household savings:
- Home loan – negotiate and save up to $3,412.
- Credit card – switch and save up to $416.
- Phone plan – change providers and save up to $270.
1. HOME LOAN – haggle and save up to $3,412
One of the biggest expenses in the family budget is the mortgage. It’s also one of the areas where you can save the most, just by calling your bank.
Savings on the average $400K owner-occupier loan
|Average rate||Savings after 1 yr|
|Existing owner occupier|
|New customer variable rate|
|New fixed rate (1 – 3 years)|
Notes: based on an owner occupier paying principal and interest, haggling 5 years into a 30-year loan with a $400,000 loan balance. Does not include fees. Average rates are from the RBA.
RateCity.com.au research director Sally Tindall said: “Check what your bank is offering new customers for both fixed and variable loans, then pick up the phone and haggle.
“While most banks’ lowest rates right now are fixed ones, locking in your rate isn’t for everyone. If you’re planning on getting ahead on your mortgage, or selling in the next few years, you might be better off sticking with a variable rate as they’re typically more flexible,” she said.
2. CREDIT CARD – switch and save up to $416
If you have a rewards credit card from a big four bank, it could be burning a hole in your pocket through high fees and / or rates.
“Make 2021 the year you review your credit card. Work out if it’s sending you backwards and look for alternatives that can save you money,” said Tindall.
“You might find you’re better off switching to a low-rate card, opting for a no-fee card, or going without one altogether.
Possible savings (based on a revolving $2K debt accruing interest)
|Average annual fee||Average rate||Potential savings|
|Big four bank rewards card|
|No annual fee credit card|
|Low rate credit card|
Notes: Calculations are estimates only. Exact savings are dependent on debt accruing interest, fees and rewards provided. Cards with a purchase rate under 10% are considered low rate.
LOW RATE OPTIONS - there are 15 providers offering credit cards under 10%.
|G&C Mutual Bank Low Rate Visa||7.49%||$50|
|Auswide Low Rate Visa||8.05%||$50|
|American Express Low Rate Card||8.99%||$0|
LOW FEE OPTIONS - there are over 30 cards with no annual fee, several of which offer rewards points.
|Coles No Annual Fee Mastercard||$0||19.99%||Flybuys points, insurances|
|HSBC Premier World Mastercard||$0||19.99%||HSBC rewards points, insurances|
|AMEX Essentials||$0||14.99%||AMEX rewards points, insurances|
3. PHONE PLAN – switch and save up to $270
Phone plans are one of the few bills that have dropped in recent years, however, shopping around is still worthwhile – even supermarkets are getting in on the action. You might not even have to sacrifice on coverage as many of the smaller providers run off the Telstra or Optus networks, often at a fraction of the price.
“If you haven’t reviewed your phone plan for a while, it’s probably time to do a health check. A drop of $10 or $15 each month might not seem like a lot, but the savings can really add up, especially if you’ve got a few phones in your household,” she said.
Phone plan examples:
|Data||Calls & texts||Cost /mth||Av. days in mth||Approx annual cost|
|Telstra mobile plan||40GB||Unlimited|
Note: the above plans are SIM only or pre-paid plans. Cost is based on an average daily rate over a 365 day year but actual cost over 2021 will be based on contract start date and billing dates. Only a selection of providers are displayed to be used as examples only. Customers should do a full comparison based on their needs.