You may think you are being meticulous with your finances. But chances are, many of us are still letting several hundred dollars slip through our fingers every year.
The good news is that identifying where the money is slipping away is the first step towards stemming the tide of wasted dollars.
Below are a few areas of potential leaks – and what you can do to plug them up.
1) Avoiding Refinancing
Qualifying for your home loan in the first place may have been a daunting process. So, it’s no surprise that many homeowners avoid the idea of refinancing like the plague.
But with a little leg work, and yes, a lot of paperwork, obtaining a better interest rate has myriad benefits – especially if your credit situation or interest rates are much improved since you bought your home. In addition to reducing your overall mortgage total and the monthly repayment, refinancing can provide the perfect opportunity to access your home’s equity or to consolidate other outstanding debt, such as credit cards and auto loans, into one more manageable monthly payment.
To get the ball rolling, speak to your current lender, who may be able willing to offer you a better deal to retain your business. Or, you might consider seeking out the services of a qualified mortgage broker. Just stop putting it off!
2) Throwing Away Grocery Dollars
Australians let approximately 20 percent of their groceries go to waste. With the average household spending about $242.25 per week on groceries, that could mean $2,500 of your annual budget is going directly in the dust bin.
The best way to save groceries from going bad is to plan weekly meals and snacks for your household and avoid buying perishables that are not part of the planned menu. Be mindful of all expiration dates, keep fruits and vegetables where you can see them, and freeze meats and cooked foods that won’t be consumed before spoiling. It really isn’t hard at all once you get in the habit.
3) Missing Monthly Charges
Magazines, Spotify, Netflix, that extra phone line or long-forgotten gym membership… We’ve all been guilty of letting small recurring monthly charges tick away at our bank balance long after they’ve gone out of favour. And those $10, $20 and even $50 monthly fees can add up to a mountain of wasted money each year.
So, be scrupulous about reviewing your bank and credit card statements each month, and be honest with yourself about whether you are really going to ever make your way to the gym. Then get ruthless about canceling!
4) Letting Money Run Down the Drain
Utilities, including water, gas and electricity, can be a major portion of your monthly household budget and a considerable source of wasted dollars.
Obviously, these are household essentials. But what is not essential is waste, or paying too much unnecessarily.
In addition to making smart choices around the house — unplugging electronics not in use, being mindful of heating and cooling, fixing plumbing leaks — shopping for the best rates for electricity and gas is crucial. Tools like the Australian Government’s Energy Made Easy website help simplify the process of comparing providers and getting the best deal.
5) Holding Too Much Debt
Aside from the balances themselves, every dollar you owe in the form of a loan, credit card, or line of credit is accruing interest — every minute of every day.
This one may seem obvious, but is so incredibly important. Pay balances in full each month, whenever possible, and make sure you’re receiving the best possible interest rate, potentially by consolidating balances into a lower rate credit card.
And if your debt levels have become overwhelming, reach out to a qualified debt counsellor sooner rather than later. The not-for-profit National Debt Helpline is a good place to start.
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Katrina Haskew is Managing Director of Leading Advice.