How Australian can save serious money in tough times
Australia might be in a recession, but there’s an easy way consumers can get instant discounts on everything from their mortgage repayments to utility bills.
SmartDaily
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There is a critical skill that Aussies should be using to make cuts on their most important household expenses: negotiation.
And even in a recession, there is still opportunity to bargain and save while being mindful of businesses doing it tough.
Financial services firm Canstar’s Effie Zahos said “information is power” when negotiating.
“These days just about everything is up for negotiation, but the discounts won’t come automatically,” she said.
“Come to the conversation equipped with research that will help you make your case.”
Other monthly costs such as energy and mobile phone bills should also be reviewed and those in the market to buy a car should negotiate.
MORTGAGE/RENT
Radd Peters, 38, and his wife Indiana Franke, 34, recently switched lenders after seeing banking advertisements offering much cheaper mortgage interest rates.
The couple suffered income hits to their own physio and pilates business during the pandemic, putting them under financial pressure to pay off a $750,000 mortgage on their five-bedroom home at Currumbin Valley on the Gold Coast.
They were paying a rate of 3.4 per cent with Macquarie Bank and switched to ANZ on a rate of 2.74 per cent.
On a 30-year loan this will save them $97,000 over the loan term and reduce their repayments by $268 per month to $3058.
“We saw changing interest rates and wanted to get a better deal,” Mr Peters says.
“We’re going to put the extra money into our loan so we can do improvements around the house.”
The pair also received $4000 cashback by switching and have also negotiated better deals on their utility and phone costs.
Mortgage Choice broker James Hasselle says borrowers should be “going in really strong and negotiating their interest rate”.
“Look at the interest rate and cashback deals but don’t let the money back control your decision,” he says.
“We can negotiate directly for a customer and we can play lenders off from one another to get the best deal.”
Struggling tenants should also see if rental assistance is available if they have been hit during the pandemic, or whether their landlord is willing to negotiate on rent.
A good time to chat about rental discounts is when a lease term expires.
UTILITIES
Some of the other hefty expenses hitting households each month include energy and telco bills.
Financial research firm Canstar Blue’s spokesman Simon Downes says for states where you can negotiate energy costs, you should.
“Try not to get too distracted by offers of reward points or other bonuses – get yourself on a plan that actually brings low usage and supply rates,” he says.
“The incentives are the icing on the cake if you can get them.”
While for telco and home broadband costs Mr Downes says competition in this space remains fierce.
“With mobile plans it’s a bit easier to determine where the best value can be found, especially if data is your main consideration,” he says.
BUYING A CAR
JBS Financial Strategists chief executive officer Jenny Brown says whenever negotiating the costs of financial products including car loans “always be prepared to walk away”.
“You need to look at annual fees, understand the interest rate and what the repayments are, beware of the hidden fees and charges,” she says.
“If you’re in a strong financial position there’s great deals to be had, you just have to ask.
“It’s amazing the amount of times clients have told us they got a discount on a loan just by asking.”
If you are buying direct from a car dealer don’t just pay the advertised price, see if there’s better deals elsewhere to see if they come to the party or even offer a price drop.
HOW TO NEGOTIATE A BETTER DEAL
• Know what fees and charges you are paying now.
• Do comparisons online to see what other deals are available.
• Contact your provider and ask for a better deal.
• Reel off some of the better offers available.
• Be prepared to walk away or switch providers if they don’t come to the party.