With rising inflation, the skyrocketing cost of energy and fuel, and interest rates steadily on the up, it’s never been as important to save money around the home.
And doing so can be much easier than you think.
A great place to start is with your largest household expense – your home loan, since the interest you pay each month usually far exceeds what you pay for petrol, electricity or insurance.
“There’s no point in being loyal to your lender, as they won’t be loyal to you,” says Kareene Koh, Domain Home Loans chief executive. “Particularly in the current climate, I encourage anyone who’s paying money out of the household budget to think about refinancing and to shop around to see what other options are out there.
“You might get a better rate or at least be able to refresh the features of your account, like perhaps having an offset account where any savings will count towards repayments and help you to get down the balance of your loan faster. Even an extra $20 a month will make a difference.
“It’s a good idea to start looking around as much as eight weeks out from the expiry of your fixed-rate loan to avoid your bank automatically moving you to a variable loan that could well be higher than the rest of the market offers.”
By clinching a lower rate that is often offered to new customers, Australians with an average home loan size of $500,000 could potentially save $2000 a year on their home loan, or roughly $50,000 over the typical 25-year life of their loan.
Just like with your home loan, don’t get stung on loyalty tax for your insurance, phone and energy bills, says Gerry Incollingo, the managing partner of financial advisors LCI Partners.
Ask for a better deal; again, the kind these companies give to new customers. You might be surprised how much they want to keep your business.
“And be mindful of your energy usage, too,” he says. “Turn out the lights as you exit the room, turn off appliances at the wall and wait until your dishwasher is full before you turn it on. Little things like this add up and can make a dent in your bill.”
Also, instead of turning the heating on every time the temperature dips, put on an extra jumper or an Oodie, or keep a blanket handy to put around your shoulders. In summer, use fans rather than air-conditioning.
Issues like leaks, cracks in the wall or mould seem to pop out of nowhere and can be very irritating. “But it’s important not to procrastinate when it comes to addressing such issues, as leaving them for too long can result in much bigger, and much costlier, problems in the future,” says Prashant Rajkhowa, founder of cryptocurrency platform Chillur.
“To further cut costs, not every renovation or home improvement job requires the help of a specialist or tradesman. Try your hand at DIY for tasks like painting or removing carpet to save on unnecessary labour costs.”
Don’t avoid friends just because you want to save money. Instead, invite them to your home and ask them each to bring a dish for a communal dinner, or go for a walk together rather than meeting for lunch, cocktails or coffee.
You’ll all spend less and have fun in a relaxed environment.
If you have a garden or a balcony, consider growing vegetables or fruit, and herbs can be grown inside anywhere with access to sunlight. Also, avoid buying bottled water. If you don’t like the taste of tap water, invest in a water filter.
Draw up a shopping list, too, before you leave home. That way, you won’t be tempted to spend more than you should on things you mightn’t really need.
Then, shop around for the best prices for food, including fresh food in season or those products that haven’t been affected by flooding. Australian-grown sprouts, for instance, are much cheaper than lettuce and can easily be substituted for it, Incollingo says.
Do you really need to use delivery apps like Uber Eats quite so often? Cutting back even to one to two nights a week can lead to big savings.
Instead, try to plan your meals and shop for them in advance, and maybe have a big cook on a Sunday and freeze portions for the rest of the week for your evening meals and for lunches if you’re back at work. Also, make up your own snacks rather than buying them, and smash your own avocados for breakfast instead of going out to eat.
Keep your eyes open for money-off coupons and special deals that can lead to substantial savings on regular buys.
You can even save on laundry by washing clothes in cold water rather than warm, which is better for them and for your hip pocket. Try to hang them up to dry rather than using the drier. And avoid buying clothes that can only be dry-cleaned, which can prove extremely expensive.
Check your credit card statement thoroughly every few months to see if there are any subscriptions on there – to streaming services, magazines or gyms you don’t actually get around to attending – that you may have forgotten about.
That’s also a good way to see where all of your money is going and to work out if there’s a way you can reduce that spending, Incollingo says.
The allure of new appliances, furniture or electronics can sometimes be overwhelming, Rajkhowa says. “But while it is necessary to upgrade these things from time to time, take the time to consider whether you’re doing so out of necessity or impulse.
“And importantly, if upgrading appliances – look for more energy-efficient models to try and cut down on your electricity bills.”
It can also be easy to borrow some appliances you won’t need often from friends, like a steamer for linen shirts, a carpet shampooer or a whipper snipper. Doubtless you’ll have something they’d like to use too!
Recycling is fashionable as well as a great way to save money. Recycled furniture, in particular, can be very inexpensive as well as full of character, and cuts out the long wait for new items to arrive due to supply chain disruptions.
At the same time, selling items you no longer need can be profitable as well as freeing more space, while retro is always in style.
Start a side hustle, suggests Incollingo. “If you have a useful skill, why not put it to use and make some money out of it?” he asks. “Handy on the tools? Try signing up to AirTasker. Good at writing or design? Sign up to Upwork.
“There are so many skills websites around now that are very popular, so why not make some extra dollars in your spare time?”