It can be hard enough just staying on top of the household schedule sometimes, let alone keeping up to date with what the Government has been up. But, there have been some recent reforms around money matters, and if you haven’t been paying close attention you could find that you’re hurting yourself financially.
And because we know that you’d much rather be spending those extra few minutes you’ve got each day doing something you enjoy, not reading Government policy, we’ve pulled together a summary of three reforms we think you should know about, and act on if you haven’t already.
#1. Health Insurance price hikes
The largest health insurance price hike in 9 years came into effect at the start of April. According to the Health Department, private health insurance premiums are expected to rise by an average of 6.2% which equates to an average price hike of $250 a year.
If you have private health insurance, it is a great time to review your policy and make some changes if you’re not getting the best value. It’s important though, not to just ‘dump and run’ for the cheapest policy, find a policy that fits best with your needs at a price you can afford.
Some tips for keeping your insurance costs down:
stop paying for things you don’t need. If you’re young, it’s unlikely a hip replacement is in the near future so scale back your cover to suit your lifestage
take advantage of discounts. You can get up to a 4% discount with some insurers if you make an annual or direct debit payments.
ask for a refund. If you choose to switch, be sure to ask for a refund for any payments you made in advance.
be sure to claim. If you aren’t claiming then you are not getting value out of your policy. Either strip back the cover to the things you’ll use and put the savings towards something you will use or book an appointment with the masseuse.
be wary of promotions. Promotional offers can be a great way to save money, but only if they have the right cover for you. Don’t switch to save $100 then find you will be out $500 in extra excess.
#2. Comprehensive credit reporting
Recent changes to the Privacy Amendment Act mean that banks and other financial institutions now have the ability to review positive as well as negative data when making a decision to grant credit.
While this is generally a positive move as it means that your good behaviour such as making on-time payments can now be taken into consideration when you are apply for credit such as a home loan, credit card or personal loan, it also means that the odd late payment will also be recorded, so it is now more important than ever to pay your bills on time.
Changes to the act mean that extra data collected on your credit report will now include: account opening and closing dates, account type (credit card, mortgage, etc), credit limit and 24 month repayment history.
How to keep your credit report in shipshape:
automate your bill payments. Set up a direct debit with your provider or use internet banking to schedule your payments on the due date.
keep your credit card balances low. Its a good rule of thumb to keep your balances within 30% of your credit limit. Providers now have the ability to see what your credit limits are and how repayment history to see how well you manage your debt.
close unused accounts. All opened accounts are considered to be potential debt so close accounts you don’t use.
shop around before applying. Every credit enquiry is noted in your credit report so it is better to do your shopping around on Mozo before making applications so that your credit report remains as clean as possible.
check your credit report. While it might be a nerve wracking exercise to see what’s in your report, it is important to review the report to make sure all the information is correct. Check for outdated information, unfamiliar enquiries and any billing or payment issues that have been rectified but not cleared up on your file.
# 3 Account Sweeping
While many Aussie couples have admitted to keeping secret money stashes as a safety-net, it’s worth knowing that if you choose to keep a rainy day account you could find when you go to use it, your money is no longer there.
Last year the Government dropped the threshold for inactive bank accounts from 7 years down to just 3 years. If you don’t make a deposit or withdrawal every three years the account will be swept by ASIC. There is around $1billion in unclaimed money currently so it would be wise to do a quick check to see if there isn’t more than one stash you’ve been hiding away.
If your account is swept, you will be paid minimal interest on the balance but that’s no substitute when you could be earning at least 4% on your money. Check out all the best savings rates on Mozo here.