Five ways to give your budget a fitness test
Who doesn’t want a bit of extra money in their pockets? There are lots of sneaky ways that many of us are spending more than we need to every day – and they can add up to significant sums.
If you need to plug a hole in your leaky bucket of a bank account, here are a few things to think about.
Broadband
If you haven’t looked at your broadband settings lately, it’s a good idea to check what sort of plan you’re on.
Find out what your data allowance is, particularly if you’ve recently developed a streaming habit, or have kids who are playing more online games. Typically, you might use about a gigabyte (GB) of data for every hour of standard streaming, and three times that for high-definition video.
You can usually get unlimited broadband for about $80 a month, depending on the services you need, although there are often cheaper specials.
Plans are cheaper if you’re willing to stick to a limit. But if you regularly go over that, it can add up.
Vodafone, for example, charges $2 per GB or part of one over an account’s set amount. Spark charges in data blocks of 5GB each for $5 up to a maximum of $50.
That means you could end up spending the $10 or $20 you saved by not having unlimited data to begin with.
Power
The recent electricity price review highlighted that many households are missing out because they don’t ‘‘shop around’’ for the best deal on their power. It’s been estimated that people who are loyal to their power company have been paying a combined $400 million in ‘‘loyalty tax’’ because power companies waited to offer their best deals to new customers and those who showed signs of leaving.
It’s easy to check whether you’re getting a good deal, by visiting sites such as Powerswitch.
If you are happy with your existing provider, you can also check you’re making the most of any discounts available to you, and are on the right plan for your consumption.
Credit cards
There are a lot more credit card options than there used to be – top-of-the-line ones with lots of features and rewards, low-interest options or bare-bones cheap cards.
Compare how you’re using your credit card to the fee structure.
If you use it a lot but pay it off in full each month, a card with a generous rewards programme might suit best. Consumer NZ rates ANZ’s Cashback Visa, Warehouse Money Purple Visa and American Express Airpoints as good options for someone spending $25,000 on a credit card a year.
But if you don’t use your card a lot, or you sometimes carry a balance from one month to the next, a low-rate, low-interest card such as ASB’s Visa Light might suit.
If you have a big balance you’re struggling to clear, consider a balance transfer offer. You can sometimes get a zero interest rate for a fixed period.
Subscriptions
More and more things are being offered on subscription. There’s the gym and magazines, of course – but what about websites, TV, toothbrushes, makeup, drinks . . .
If you’ve signed up to subscriptions you’ve forgotten about, or which you only remember when another package arrives in the mail, you’re probably wasting money.
Run through your bank statements to check.
Opportunities to pay upfront
Sometimes it takes money to save money. You can often save money if you’re willing to make a bigger payment initially. Paying your insurance upfront for a year rather than in instalments, for example, or buying a six-month gym subscription instead of paying weekly.
If there’s anything you’re likely to keep spending money on, see if you can arrange a discount for a lump sum payment.