Save thousands of dollars by making some savvy switches

Bill shock is hitting Australians hard, but there are plenty of ways you can slash your annual spending by thousands of dollars.

Balancing household budgets is hard, so it pays to shop around. Picture: iStock

Household bills are being hammered and no everyday expense has escaped the pressure of surging living costs.

Experts say the best deals often go to new customers rather than loyal ones, and switching providers can save people thousands of dollars a year across key bills.

Compare Club head of research Kate Browne says she has seen more people switch energy and insurance bills this year, but has noticed a fall in home loan refinancing amid mortgage serviceability issues.

“It is surprising how many people have held on to beliefs around switching that are no longer accurate – from concerns around having to reserve waiting periods with health insurance, an issue that was removed back in 2007, to the idea that being on an old offer or deal might be far better value than new offers,” she says.

“The other misapprehension is that switching takes a lot of effort or time.”

Canstar Data Insights director Sally Tindall. Picture: Supplied

Compare Club head of research Kate Browne. Picture: Supplied

Canstar insights director Sally Tindall says people wanting to “inject real, ongoing relief” into their budget should write a list of every expense they pay.

“Then, make a note of which ones are negotiable,” she says.

“That’s your treasure map to finding budget relief. Rearrange this list in order of size so the biggest recurring expense is at the top and work down from this point.”

Here are 10 savvy switches that could save almost $15,000 a year combined, and we won’t even suggest you cut out daily takeaway coffees and switch to making your own (even though that potentially saves another $2000).

1 HOME LOAN

Compare Club’s analysis has found people can save $5167 a year on mortgage repayments, up from $4680 last year, by switching to a lower-rate home loan – which can deliver average interest savings of 0.84 per cent on a $615,000 mortgage.

“Fewer Australians have refinanced their home loans this year, and it’s not surprising as loan serviceability is challenging at the moment and many people who could refinance have done so,” Browne says.

2 HEALTH INSURANCE

Compare Club says families can save an average $328 annually by switching health funds, while singles can save $197.

Sometimes just taking out health insurance can save money, as Australians on average wages or higher can be penalised more in tax than they pay in premiums.

3 CAR LOAN

People with vehicle finance can save $924 each year on an average loan of $31,700, by refinancing from the average rate to the best market rate of 6.59 per cent, Compare Club says.

4 PETROL

Petrol prices move in cycles in most capital cities, and often varies by 35c per litre.

A two-car household spending a typical $100 per week on fuel can save $20 each week – or $1040 annually – by switching their fuel purchase timing.

5 CAR INSURANCE

Research this month by Mozo.com.au found car insurance premiums have climbed 16 per cent in a year, and someone who switches to its best-value car insurer, Budget Direct, can save $463 a year on average.

“Brand loyalty is understandable, but when it comes to car insurance, familiarity can cost you,” says Mozo spokeswoman Rachel Wastell.

6 HOME INSURANCE

Canstar research in September revealed that home and contents insurance premiums have climbed 13 per cent annually to an average annual bill of $1646. It analysed 20,000 policies from 49 providers and found the average saving from switching can be $819.

“It’s worth doing a health check on your premium when you next find a spare hour or two,” Tindall says.

7 ENERGY

Compare Club says energy bill savings vary by state, and some residents save $300 a year by switching providers. Canstar says switching from a default plan to the lowest-price offer can potentially save $460 a year.

8 CREDIT CARDS

Average credit card interest rates are near 20 per cent, so aim to pay it off within the interest-free period. For a sticky credit card debt, Compare Club says a cardholder could save $908 in a year by switching a typical card to a balance transfer card.

Are your finances in a squeeze. Remember that loyalty doesn’t pay. Picture: iStock

9 LIFE INSURANCE

Compare Club says switching life insurance providers can save nonsmokers up to $240 annually, and smokers up to $974.

10 GROCERIES

Canstar’s Tindall says its research has found people can save a potential $84 off an average weekly grocery shop of $216 “just by switching to cheaper brands without having to switch supermarkets”. That’s nearly $4400 a year.

“As the second biggest expense for many families, it’s one well worth fighting,” she says.

“If you’re determined to knock your grocery bill down further, engage in at least a couple of additional strategies such as shopping across two or more supermarkets, buying in bulk to take advantage of half-price specials and meal planning to help reduce your food waste.”

Originally published as Save thousands of dollars by making some savvy switches