My EOFY expenses audit that could save you $10,288
Save articles for later
Add articles to your saved list and come back to them any time.
The only money game in town right now is cutting costs. And a new financial year is the perfect time to reboot for a better bottom line.
Here is a fast financial year audit that saves the average Australian $10,288 – from slashing your “inflated” interest bill all the way through to avoiding new July 1 rules that could further hurt your hip pocket.
With costs up everywhere, this financial year, complacency will really cost you.Credit: Fairfax Media
Home loan savings: As property values fell (although it looks short-lived) in 2023, so too did the average loan size – from $609,785 to $585,101, says the ABS.
But even just the rate rises this year have added a full percentage point to the best-in-market, quality mortgage price.
Though the big four were getting competitive to steal market share for a while there, the big discounts for ditching customers are disappearing.
On the positive, both Westpac and CBA have relaxed their lending requirements, and you can expect smaller outfits to follow suit. That means, where the chances were slim, it is possible that today you would get approved.
The saving from refinancing from even the average big four discounted rate to the best comparable rate today (Mozo says this is, respectively, 7.06 per cent and 5.39 per cent, with the latter from Police Credit Union) is $603 a month – or $180,929 over the life of the loan.
Just note that if there is any way you can keep your repayments at their current level, you’d save $138,753 getting mortgage-free. You would also get out of debt six years early, and you’d have a financial year saving of $7236.
Personal loan savings: You could drive a car through the current difference between the best and worst personal loan rates.
Mozo says you could be paying as little as 5.15 per cent from the cheapest lender Cashify (note this is a credit-score-dependent starting rate) or an average 7.69 per cent with Australia’s biggest banks.
The annual boost from moving a loan balance of $30,000? A financial year saving of $432.
Credit card savings: As the cost of living bites, spending on personal credit cards was up more than 7 per cent in the year to April to $282.5 million, the highest since the RBA’s records began in January 2002.
And in the dirty little secret of the banking world, many Aussies are still paying an outrageous 18 per cent on their rolled-over debt.
They could instead be paying nothing. For real.
More than a dozen providers will let you transfer an accrued balance and pay nothing on it for a period of up to 36 months – Mozo says you can get this long with Citi’s Clear card.
And how much would you save in interest in 2022-23 if you have an average $1460 ongoing debt, versus paying it off over three years at 18 per cent? Effectively $620 over the financial year.
Health insurance savings: If you are one of the lucky ones in line for a pay rise, this year you may be caught by the Medicare Levy Surcharge of up to 1.5 per cent.
At the end of the financial year, this weekend the income thresholds went up to (a fairly typical) $93,000 for singles and $186,000 for couples but at $100,000, you will lose $1000 unless you get private health.
That amount goes a long way towards covering the cost of cover. And, if you are already covered, chances are you could be paying far less.
As Aussies seek to save and drop cover, policy pricing has become sharp, and you could instead save $2000 a year, as revealed by a search on an independent comparison website privatehealth.gov.au.
Don’t forget if you delay any day after turning age 31 now, you will pay 2 per cent extra for each year, for 10 years. But if you are younger than this, there are also new age-based discounts. Acting on this could save you $2000 per year.
With costs up everywhere, this financial year, complacency will really cost you.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me. Follow Nicole on Facebook, Twitter or Instagram.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up here for our Real Money newsletter.
Most Viewed in Money
From our partners
Source: Read Full Article