Save money you’re now wasting

1 BANK FEES: Too many people have old-style, high-fee accounts, and could switch to free alternatives. Paper-based statements is an obvious one to shed given internet banking allows you to download your transaction history in a number of formats. The cost of the paper statement is often $3.50 a month.

Racking up penalty fees for missed payments is a common drain on people’s resources, as are costly overdrafts, especially unauthorised ones which result in both fees and high interest. ‘‘Fees for missed payments are not small, and only a few mishaps can result in more than $100 lost,’’ Wahlstrom says. 2 PAYING TOO MUCH FOR BILLS: Many people are lazy consumers of services like gas, electricity, and telecommunications. Review what your suppliers are charging by using services like whatsmynumber.co.nz and consumertellme.co.nz. Many people also allow their use of things like power and water to escalate without realising the cost, and they are often due discounts they are not given. 3 SHOP ONCE: Every time you enter a shop, you are surrounded by temptation. Shopping weekly to a plan and staying out of the supermarket in between cuts down the likelihood that you’ll succumb to temptation and make impulse purchases. ‘‘These places are geared up to make us buy more,’’ Wahlstrom says. ‘‘It is very common for people to pop back to the supermarket two or three times a week, which is one of the easiest ways to spend unnecessarily.’’

Blowing $10 to $15 a week this way is easily done, he says. 4 ONLINE SUBSCRIPTIONS: These are a growing drain on people’s budgets. Signing up to monthly fees to download the likes of movies and music may sound like a great deal, but they can turn into recurring money wasters. Often those who have subscribed don’t use them as much as they thought they would. ‘‘ Because they tick quietly away in the background, they are easily forgotten – $10.95 here, $12 there, $14.95 – without running a tally you can easily lose track of the total,’’ Wahlstrom says. 5 STOP WASTING FUEL DOCKETS: Many of us just end up throwing out the fuel dockets we get after supermarket shopping, instead of paying less for our petrol. Remember, every little bit counts. 6 PAY UPFRONT: Taking annual and early payment discounts on things like rates, power, insurance and memberships at places like the gym saves a packet. For some memberships paying annually as opposed to monthly can save a quarter of the price. 7 AVOID ‘‘INTEREST-FREE’’ DEBT: Taking on consumer debt is always likely to reduce your future wealth, and there’s a good chance of that happening even if a zero interest rate is offered. Traditionally consumers would use hire purchase when borrowing in store to buy items such as a new bed or lounge suite, which meant it was repaid over a set period of time. Nowadays, hire purchase has all but vanished, replaced with revolving lines of credit where the temptation to keep using the debt on offer as it continues indefinitely. Wahlstrom frequently sees people who fully intended paying off the ‘‘interest free’’ debts they incurred, long after the interest-free period is over. 8 LOSE THE LOOSE CHANGE: The ‘‘brown envelope’’ strategy of paying yourself some cash each week is a popular way of keeping personal spending in check. The theory goes that when the money is gone, it is gone. Wahlstrom doesn’t like the system, though acknowledges many do. ‘‘Handing over cash is a more transparent experience than handing over plastic, but it’s not transparent when it comes to tracking where that money went,’’ he says. ‘‘It is easy to misplace $10 a week, either by ‘using up’ loose change, or losing it. That’s $520 a year gone.’’ Using debit cards provides a clearer view of where the money is going. 9 INSURANCE REVIEW: Too many people make their insurance a ‘‘set and forget’’ purchase, doing it once and forgetting it. Yet when prompted to get fresh quotes, people often find they are overpaying. ‘‘In New Zealand, you see a massive variance in insurance premiums,’’ Wahlstrom says. If there are savings to be had from switching to another insurer, they can be banked, put towards the mortgage, or used to buy more insurance if they are under-insured. Insurance is about balance – having enough, but not so much you can’t get ahead, Wahlstrom says. 10 SETTING GOALS: Setting goals and working out how to achieve them provides a ‘‘money map’’ to travel by which should lead to greater riches. If you do just one thing, reset the term you’re repaying your mortgage off by – most simply accept the term the bank suggests, which usually works in the bank’s favour.