Nearly three quarters of Australians are worried about their financial situation, according to new figures from Finder, with the coronavirus pandemic sending 1 million into unemployment and triggering pay cuts for others.
This makes the case for cutting unnecessary expenses even more pertinent, author of personal finance book Kill Bills! Joel Gibson told Yahoo Finance.
Gibson saved over $3,000 on his household bills in one year with six phone calls, and is now on a mission to encourage other Australians to reassess their bills through the One Big Switch consumer network.
“If there’s one positive thing that will come out of this year, it’s that a lot of people will become a lot more disciplined about where their money is going and I have no doubt people will form really positive habits out of this pandemic that will last possibly for the rest of their lives,” Gibson said.
Okay, tell me where I can save
The key is to start with the bills that are the simplest to switch and save on, then build up to the bigger expenses like rent or mortgage repayments, Gibson said.
The simplest bill to switch is your mobile phone bill – you’ll take your mobile phone number with you and there’s no cost of switching. He said it’s “madness” to pay more than you need to for mobile.
“I think people would be surprised that sometimes you can even save hundreds or even $1,000 by switching from one mobile plan to another.”
“If you’re looking for a plan that offers 60GB of pre-paid data a month, you have the potential to save more than $1000 a year by choosing a cut-price carrier like amaysim rather than a big legacy brand like Telstra,” he said. Gibson is currently in a partnership with amaysim, encouraging Australians to shop around.
The key is to realise that you could be paying hundreds of dollars more over the course of the year, even for a 30GB plan, and then switch.
“That’s a really easy way to save possibly a couple of hundred bucks in a matter of minutes.”
The next bill to consider is your energy bill. The Australian Energy Regulator noted that a customer moving from the median standing offer to the best market offer in their zone could save as much as 20 per cent, or $300 to $400 in annual savings, as of January 2020.
And in switching states – NSW, Victoria, South Australia and south-east Queensland – billpayers can spend five minutes filling out an online form to switch.
“There’s some fantastic government websites that pretty much do it all for you, you just punch your numbers in and they’ll tell you what the cheap ones are.”
Next, consider things like entertainment and streaming services.
“When I see anybody who’s still paying $100 or $150 a month to get Foxtel down the cable into their home, I want to shake them by the shoulders and say ‘Haven’t you heard there’s been this revolution in streaming services?’”
Viewers can get nearly all of the same content streamed for a fraction of the price. Gibson said this is another area where Australians can save “hundreds of dollars at the click of a switch”.
“If you’re paying for old fashioned pay TV, there’s a massive savings opportunity right there.”
Big bill blitz
Gibson said savers should set aside half a day a year for a “big bill blitz” where they look at their household budget and consider where they can get a better deal.
Doing this will save thousands of dollars over time, he said, noting that deals will gradually deteriorate over time, until what was once a great offer is now the worst in the market.
“Your energy provider once a year will put the rates up and they might also cut the discount. With mobile they won’t necessarily put the price up, but the rest of the market might get more competitive and you’re missing out on better deals that are in the market right now.”
Then there are the major expenses like your mortgage, where your lender may not pass on the full interest rate cut from the Reserve Bank of Australia.
“That is often where businesses make money out of their customers, in what they call the back book.
“They’ll five you a honeymoon deal in the first year to come on board and then they basically try… to slowly turn the heat up on us, and before you know it, you’re toast.”