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For most of the families or couples I know, live on a budget and it is often paycheck to paycheck. I know this is the case for my husband and I aswell.
It wasn't until my husband lost his job in 2012 (when his employer went into administration) and at the same time my hours had been reduced from 24 contracted hours weekly to 4 (unless I picked up extra shifts), so I had to learn quick smart a) how to budget, b) how to make the money we have from each pay count and c) how can we manage when there is more money going out than coming in.
Up until this point, I had never created a budget. But once I had, I saw how much EASIER it made managing the bills, and three years on I am still finding the success it has helped us to better manage our finances.
I wrote a list (table) of all the money that we had coming in, and all of the money that needs to go out on bills and also allowing for food. Because of how tight things were I didn't allow for things like shopping, movies, going out for dinner or date nights as these were 'luxury expenses'.
My expense list looked something like this: (NB: this is an example only)
Then there were the yearly bills like car registration and CTP Greenslip (so roughly $1000 annually) which I put $20 a week away into a seperate savings account so that we had the money there when we needed to register the car.
Up until the last month, I have been paying the same amount in bills as I had done 3 years ago. But it got me thinking that IF I reviewed my current bills what potential savings could I find?
Reviewing the mobile phone plans:
The first thing I reviewed was my current mobile plan. I thought years ago (when I worked at a local Telstra Business Centre) that the best plans for value were the ones for business customers, so the last however many years I have been paying a lot when I was barely getting any value. And being in the country, I needed to have the best mobile coverage so it kept me loyal to telstra.
Turns out, if I went back to being on a consumer only plan I can be paying less a month with unlimited calls, unlimited SMS and a whopping 6 GB of data (considering I went over my previous 1GB allocation each month, this was exciting). I also was given 25GB as bonus data during my first month and I could also get an iPhone 6 for less than I was paying previously!
With this new plan, it also meant that if my husband transferred his phone account into my name, and if it were on the same bill as mine he could drop down to a $50 a month plan with 2.5GB of data (when added to my data we now have 8.5GB to use each month) and he gets $1000 in call allowance too.
We saved $50 a month in my husband's plan alone, and $60 a month in mine so $110 a month in total!
Reviewing your bank accounts:
I have found before from my own personal experience and from working in a bank, that it is good practice to review your loans and bank accounts at least annually, as circumstances change it is important to ensure that the loan and products are still working the best that they can for you especially as the interest rates are always changing.
I recently reviewed our Personal Loan we took out when we purchased our car, and found that the current interest rate we have is almost 3% lower than the current rate offered.
However, while we haven't saved any money from reviewing the loan we are in the process of hoping to buy our first house and have plans to incorporate that loan into our mortgage, which will mean we save $135 each week.
It is also important to give your loans a health check to make sure that you are still covered with the protection side of things, not only does it offer peace of mind if you were to become sick, to lose your job or pass away, that if you're eligible for the protection it is worthwhile having. I know I had to use the insurance side of my loan and credit card when my husband lost his job and the payments were covered for 3 months. Going off of our loan, that was a saving of $135 a week or $1620 in total that was then able to be used towards other bills.
Credit Cards and Balance transfers:
I know how hard it can be to fall into the trap of having a large credit card debt, and no matter how much you're paying in repayments each month it still feels like you're being killed by the bank's interest rates!
I have learnt over the years how to save money on your credit card, and more importantly how to make your credit card work for the best for you. (keeping in mind that advice is general based on my own experience and you should always consult financial advice and read the Product disclosure statements)
With the Credit cards, sometimes it can feel like you can never get in front of the repayments, and when times have been tough I had a balance transfer of our credit card and it helped us save so much money! The benefit of the balance transfers is usually the banks offer a promotional period say 12 months where they won't charge you interest on balance transfers during that period.
We did this on our bankwest credit card for $5000, and we were able to budget and pay it off in a whole year! We set a minimum of $50 a week payment and if there were weeks where we had the $100, we would pay that amount.
By doing a bank transfer we were able to save ourselves paying 19% interest p.a on the credit card, and it means that we now saved ourselves approx. $915 p.a in interest!
Reviewing our Home insurance:
A few months back, I was speaking to a friend about "adult things" which included talking about insurances and stuff. She told me that she was paying almost HALF of what I am paying, and she was the same age just different suburbs.
I always put down the fact that our insurances cost more than my friends was that it apparantly "floods" and a "high crime area", so I never thought anything more of it.
So I started to shop around and get quotes, and while I found a few that were happy to offer a cheaper rate it came at the risk of "due to the known risk of flooding, we will insure your property excluding flood". Knowing my luck (since I am not THE MOST LUCKIEST person that it would flood).
So I went back to our existing insurer whom we were currently paying $3000 a year in premiums, and said we were looking at going elsewhere unless they could help us with a better quote.
They came back and said as we were only renting we could have just contents insurance. Imagine my surprise when it came in at only $612 a year! That was less than $60 a month and less than $15 a week! We were paying $250 a month before or $60 a week!
So we saved ourselves over $2300 a year!!
Reviewing our Private Health Insurance:
I know in the past when things have been a little tight, my private health insurance (along with my car and home insurance) were some of the expenditures I was willing to let go. Not because I felt I didn't NEED them, because I did but because it was an expense I couldn't justify between meaning if we have insurance for this week or if we ate food this week.
There was no doubt the struggle was (and for many) real, and I know how important it is for your money to be spent in the best way possible for yourself and your family.
One thing I recently learnt, was that I needed to review my Private Health Insurance more regularly than every 5 years!
I have been with my current provider for going on 5 years, and I thought I was happy with the cover being top hospital and no extra's and that I thought at $70 a fortnight I was getting a great deal.. I was happy until a couple of recent circumstances where 1) they would only cover my chemotherapy IF the drug was on the PBS, and 2) they no longer cover aneasthetics and I had a $1000 bill from the aneathetists for putting in my port. After speaking with the aneathetists secretary she explained that my health fund WAS the only fund they have to charge to the client.
So I was on a mission and enquired through Health Insurance comparison with the type of cover I have now and what I pay, and wanted to find out if there were comparative policies that:
1. covered aneathetiscs
2. was top hospital cover and covered surgeries
3. Had a partnership with the hospitals I frequent
4. Included ambulance cover
The consultant was SO helpful and talked me through my existing policy and comparing policies that were better.
He came back with a plan through AHM that was $3 less a fortnight, included extras like optical/dental/chiro/physio/remedial massage. Or if I wanted just the extras for my husband it was only an extra $10 a fortnight of what I am paying now!
Not only has Health Insurance Comparison helped me to save a lot of money such as $1000 aneathetists bill for 1 hour for admissions I needed it... and if it were based on my surgeries this year it could be over $20,000 a year it helps me to save! PLUS the rebates with extras like dental and optical too!
Hot tip: If you are done having children and no longer require having pregnancy or birth related inclusions, remove these from your policy and you will already be saving!
Thank you Health Insurance Comparison for such a seamless process to help compare the right health insurances for myself, and for helping me to save money on future surgeries. Don't forget to compare, save and go in the draw to win a year's health insurance for free!
So while you might feel loyalty to a particular company, you also need to feel loyal to your wallets and if you can shop around and find a better deal on other areas of your financial spending (power/gas/phone/internet/loans) you can afford to go on that nice holiday, or better yet buy that pair of shoes you WANT but probably really don't need...
or better yet... do what I am doing and using all of the savings and money you would otherwise have spent on bills towards purchasing your first home!
Thank you for reading my 5 top things to review when you're living on a budget to help save yourself a lot of moolah!