Ways to avoid being a money waster during lockdown

From impulse purchases online to continuing to pay for a service you no longer use, opportunities to throw your hard earned dollars away are everywhere. 

Some are pretty obvious and practically come with warning signs attached, while others are a little sneakier. 

We’ve narrowed the long list of possible finance offences down to five.

1. Buying unnecessary things online

It may start with some fairly harmless online window shopping, but before you know it you could have ten items in your virtual basket and be convincing yourself that you actually need them.

The thing is, lockdown won’t last forever and you could find yourself stuck with a load of things you don’t need or use. So before you grab your bank card, why not do some soul searching and ask yourself, ‘do I really need this new pair of trainers?’ If the answer is no, then do yourself and your wallet a favour and exit out of that window.

2. Throwing food in the bin

According to Rabobank’s 2019 Food Waste Report, Aussies threw away a shocking $10 billion worth of food last year. The report showed that the average Aussie household tosses away 13% of its weekly food shop.

Now of course, things have changed considerably in the past five months. What with pandemic-panic-buying and food shortages, we’ve most likely all had to think a little bit more about where our food comes from and how much we buy. 

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So, whether you’ve bought too much of something or you can’t get hold of an essential ingredient, the key is to plan ahead. Write down the ingredients for a recipe before you make the trip to the shops, that way you won’t be grabbing things you won’t use. You might even want to have a back-up recipe under your belt. Or, you could get creative and simply substitute one type of potato for another. It pays to not be too precious about your cooking.

3. Keeping unused subscriptions

Continuing to pay for subscriptions that you no longer use is the perfect way to put a strain on your finances during lockdown. 

Maybe you were too busy to review such things before, but why not use this time wisely to banish those pesky direct debits moving money out of your account each month.

You might even have subscription services you’ve forgotten about and if that’s the case, scan your bank statements and see if there are any odd little payments going out. It’s a good exercise not only for your wallet’s sake but also for the sake of your own peace of mind.

4. Not reviewing your household expenses

We get it ‘procrasti-baking’ is a thing and honestly if you learnt how to make bread in the past few weeks that’s great! However, if you’re not using this time to review your household expenses then you’re seriously missing a trick.

Now is the time to think about things like how much you’re paying for your internet, if you could be getting a better mobile phone plan or whether or not you should be switching energy providers to bag a lower rate. It might not seem like the most glamorous way to spend your time, but once you get into the mindset of wanting to save money, you’ll be searching high and low for more and more ways to keep your bank account looking healthy.

You might even want to get into the habit of reviewing expenses, such as insurance costs, home loan repayments and credit card bills once every 12 months.

5. Leaving your rainy day fund in the same low-interest savings account

With comparison websites just a Google search away, it’s easier than ever before to compare what interest rate you’re earning on your hard earned dosh with what else is out there. 

According to information available in the Mozo database, the average ongoing savings rate is a significant 1.25% less than the most competitive savings rate on offer. That’s an average of 0.75% p.a., in comparison to a considerably higher 2.00% p.a. (available with BOQ’s Fast Track Saver Account)*.

Of course with that particular account, you will have to deposit at least $1,000 each month to earn the full interest rate. That said, even if you were to opt for a savings account with a slightly lower no-strings-attached rate, you could still find a rate well above the average.

Let’s look at a quick example. If you were to put $5,000 in a savings account and deposit approximately $200 each month:

• With the most competitive no-strings-attached rate (1.65% p.a. with Volt Bank’s Savings Account), in one year you would earn around $101 worth of interest.
• With the average ongoing savings rate of 0.75% p.a., you would earn a much smaller $46 interest in the same amount of time.

So, rather than leaving your money to languish in a low-interest rate savings account, why not take a look at the options. You could start by heading to our compare high interest savings accounts page or simply by having a look at what savings accounts are on offer below.

*Average interest rate and most competitive rates taken from information available in the Mozo database, correct as of Friday 1st May 2020.