Is it just me or has this year just melted away? We’re nine months in and there have even been reports of Christmas plum puddings appearing on supermarket shelves. I’m not ready! If you’ve made it to this point without achieving what you wanted to financially, it’s not too late to make some progress before the end of the year.
Spring’s not only a good time to tidy up the home – it’s a great time to get the family budget into order as well.
Here are some quick ‘spring financial cleaning’ tips:
Refresh your home loan
With the frost coming off property markets, spring is the peak season for lenders chasing new customers.
It’s a competitive loan market and good deals are popping up like daisies.
But you don’t need to be in the market for a new home to take advantage of better offers if you have a home loan. If your rate doesn’t have a five in front, it’s time to shop around.
Right now, there are two-year fixed rates as low as 4.79 per cent on Compare the Market’s home loan panel. Competitive variable rates for 70- 80 per cent LVR start around 5.34 per cent. That’s 0.46 per cent below the average variable rate reported by the Reserve Bank – meaning, a lot of homeowners could create a decent rate cut on their own.
For someone with an average loan of $678,000, switching to that lower rate could represent a reduction of $196 a month.
Polish your home cover
If the rising mercury makes you feel motivated to do a big deep clean, take the opportunity to do an audit of your stuff. Most people let their home and contents cover auto-renew without checking to make sure it fits their current household inventory.
But if you’ve made some upgrades, and haven’t adjusted your sum insured, you could find that your cover falls short of your needs. On the other hand, if you have cleared out the wardrobe, or removed some furnishings, you could find you are now overinsured!
Recent Compare the Market research found that as many as 39 per cent of Australians were unsure about how much their policy covered them for. Understanding your cover could save you stress in the event you need to claim.
Get ahead of storm season
Now is really a great time to check insurance before storm season kicks in. Because when disaster strikes, insurers usually put the sale of new policies on hiatus. Embargoes usually come into effect when warnings are issued for fires, floods and storms. Insurers may also impose a no-claims period on new policies.
The idea is to prevent people buying cover only when there is a much higher risk, without ever having any previous plans to be insured.
So, let’s say, for example, if someone had no flood cover – and a warning came into place overnight – it would likely be too late for them to purchase a new policy. The best way to beat an embargo is to make sure you purchase adequate cover well ahead of time.
The Bureau of Meteorology is tipping above-average rainfall across eastern Australia from September to November. Securing cover early gives you peace of mind before the big wet.
Cool your energy bills
You can’t control the weather, but you can control how you keep cool. With many Australians now working from home part of the week, our cooling systems get quite a workout.
Every degree of extra cooling in summer can increase your energy use between 5- 10 per cent, according to Energy.gov.
Setting your thermostat at a nice moderate point, between 24-26 degrees, can help. Ceiling fans are a cheaper alternative but mightn’t cut the mustard on those really boiling days.
Switching energy plans is another quick win. Around 80 per cent of households in the National Electricity Network could be on a cheaper plan if they shopped around according to the ACCC.
My challenge to you is to run a quick comparison now and see if you can reduce some household bills.
