Crush the cost of living: Cutting personal finance costs
Five cost of living changes you can make that could save thousands in the year ahead
6 April 2022
- Comparing services and switching could save you $5,451 on average in next 12 months
- $3,000 could be saved on average by switching to a more competitive home loan rate
- $1,017 could be saved on average by switching to a more competitive NBN provider
- $567 could be saved on average by switching to a low rate credit card
As the cost of living continues to climb, Mozo has crunched the numbers and come up with five changes you can make today that could save you thousands in the next 12 months.
“While there’s not a lot you can do about higher petrol and food prices, there is something you can do about reducing your home loan, insurance and other personal finance costs,” says Mozo spokesperson Tom Godfrey.
Typically, people tend to set and forget their personal finance products but spending a little time comparing what’s on offer and switching to a more competitive offer could see you bank savings across a range of existing services:
Banking a more competitive home loan could save up to $3,000 on average
Although there’s speculation about when interest rates will increase this year, the fact is the cash rate is still at an historic low of 0.1 per cent and variable home loan rates are cheap as chips. So taking the time to compare home loan rates could save you $3,000 a year based on an average $400,000 loan paying principal and interest over 25 years. Mozo found the average variable interest rate for an owner occupier was 3.04% compared to just 1.79% if you switched the leading rate.
Logging onto a more competitive NBN plan could save you $1,017 a year
It’s easy to set and forget your home Internet plan but with more than 100 NBN providers offering services in Australia comparing the services on offer and switching you could save $1,017 on an NBN 100 plan. So while you might not have heard of the likes of Tangerine Telecom, Mate, Belong, you’ll want to hear about the prices they’re offering.
Switching to a low rate credit card could save you up to $567 on average
With wages growth struggling to keep pace with the rising cost of everyday life, if you’ve been on a spending spree it’s easy to end up in a position where you’re carrying a balance forward on your credit card that you’ll need to pay back over time. Mozo found by switching to a low rate credit card could save you $567 in the next 12 months on an average balance of $4,000 at 7.49% compared to a 20% interest rate credit card.
Tapping into a high savings rate of up to 1.35% could earn you $564
With household savings at record highs, banking the leading at-call savings rate in Mozo’s database of 1.35% instead of the average big four bonus savings rate of 0.23% on a $50,000 balance over 12 months you could earn $564 in additional interest.
Revving up a more competitive deal on your car insurance can save you $303
Analysis of quote data from 35 car insurers across 9,503 customer scenarios for the Mozo Experts Choice Awards found huge price variances in what insurers can offer. If you’re looking to save, Mozo found an average price difference of $303 a year between quotes for comparable cover.
“Crushing your cost of living is a few clicks away. By spending a few minutes seeking out a more competitive home loan, internet and credit card providers the chances are you’ll have a little more money in the household budget to help cover rising costs of other products and services,” Godfrey says.
Notes: Home loan saving based on the mozo database owner occupier home loan average variable rate of 3.04% compared against the leading 1.79% offer, over 25 years on a $400,000 balance, fees and charges not included in calculations. Savings on NBN plans were determined by comparing the most expensive plan with the cheapest plan for similar products with the same download speed from the judging criteria of the Mozo Experts Choice Awards NBN Plans 2021.