It is important to use the best financial products and services for your personal situation. But given that our personal situations have probably changed considerably over the past couple of years, how can you be sure that your previous choices are still up to date?
In general, it’s important to compare the cost you’ll pay for a financial product or service to the value it offers. If you could pay less, enjoy more benefits, or both, it might be worth getting off the ship rather than paying the âloyalty taxâ. Just keep in mind that there could also be fees or charges that could make the switch less profitable.
The dawn of a new year is as good a time as any to compare financial options, such as:
What is the interest rate on your home loan? You may be able to refinance your mortgage and switch to a home loan with a lower interest rate, which will allow you to pay off your property faster and save money on your loan.
Of course, if you are currently on a fixed interest rate, you may not be able to switch lenders yet; at least not without paying for significant break costs.
Remember that a home loan is not limited to its interest rate. You may also want to consider switching to a new mortgage lender if you want access to the features and benefits of mortgage lending that might better suit your new situation, or if you are unhappy with your current lender’s customer service.
A mortgage broker can also help you find the best options for your needs and guide you through the change process.
Personal loans and auto loans
Do you have an outstanding personal loan or auto loan that is burning a hole in your finances? If you’re struggling to manage those repayments, refinancing a personal loan is an option.
Refinancing an auto loan can be an opportunity to upgrade your vehicle to a new model, depending on your financial situation. This could include switching from a gasoline car to a hybrid or electric (EV) vehicle, which could potentially help lower your future ongoing costs. Of course, the higher cost of these cars could mean borrowing more money and going into debt for longer, thus increasing the amount of interest you will pay in the long run, although there are green car loans to consider.
If you have multiple unpaid debts, such as smaller personal loans or credit cards, you may be able to refinance into a personal debt consolidation loan, combining several smaller debts into one repayment, which simplifies the process. things and allows you to progress steadily towards compensation. your debt.
Another potential debt consolidation option could be to add your current personal loans or credit cards to your home loan. While this may allow you to pay less interest on those debts, paying off your mortgage could take longer, costing you more in the long run.
It’s all too easy to rack up impressive credit card debt while on vacation. And with credit card interest rates generally high compared to other financial products, you could face significant interest charges if you don’t resolve your balance during the card’s interest-free period.
If it looks like your credit card interest charges may start to rise faster than you can afford to pay off your balance, there are balance transfer credit cards available that may charge 0% off. interest for a limited time (eg 12 months), during which time you can work on paying off your debt without worrying about the added interest charges.
Even if your credit card debt is under control, a New Year can be a good time to ask yourself if your credit card still matches your spending habits. If you are a big spender who regularly clears your balance, you can benefit from a rewards card that allows you to earn points for your spending. But if you often have bad money on your credit card, a low-rate, no-frills option might be a more affordable choice because it will offer a lower interest rate than many other options.
If you’ve delayed reviewing your super, the New Year might be the time to rethink that. If you’ve ever consolidated your Super into one account, it may be worth looking at its past performance and investment options, and consider whether it still meets your needs at your current stage of life. APRA’s list of worst performing funds could be a useful indicator of whether your retirement plans could be overhauled.
Even if you don’t want to spend super funds, it may be worth checking to see if your current super provider has different investment options that could potentially meet your needs better. For example, a Growth investment option could potentially help increase your balance faster, while a Conservative investment option can take less risk, helping to protect the balance you have accumulated so far. Keep in mind that a superannuation is a long-term investment and it may take some time before you start to see results from any changes you make.
Savings accounts, term deposits and current bank accounts
It’s no secret that the past few years have been tough for Australian savers, with interest rates falling. These rates are likely to continue to languish at these low points until the Reserve Bank of Australia (RBA) raises the national treasury rate, which is unlikely to happen until at least 2023.
Until then, if you want to earn more than a token amount of interest on your savings, you may need to shop around and compare your options for savings accounts and term deposits. Remember, you should also consider whether there are any additional fees or costs that could affect the overall value of a savings product.
You can also consider investing your wealth elsewhere, such as stocks or cryptocurrencies. While you can enjoy higher returns, these assets are also riskier and are not guaranteed by the government like savings in an Authorized Depository Institution (ADI).
Whether it’s home insurance, auto insurance, or health insurance, it’s always worth comparing policies and providers to make sure you’re getting the best deal for your situation. You may be able to enjoy service levels, features, and other similar benefits while paying less in premiums if you look beyond your current insurance provider.
Remember, insurance isn’t just about the cost. While it can be tempting to lower your face amount to lower your premiums, it might not be worth the risk of finding yourself underinsured when you really need it. In addition, some insurers may offer access to exclusive services and other benefits that could significantly increase the value of their policies for you.
With many Australians spending more time at home over the past two years, our energy use has changed. Depending on your living situation, you may find that another electricity or gas retailer can offer you a more affordable offer, for example by bundling your services.
Keep in mind that there may be fees and charges involved if you choose to change your energy supplier, such as having a fixed-term energy contract. It may be worth considering whether these additional costs might affect the value you might receive.
If you’re in the market to make your home green by adding solar panels, batteries, or other innovations, it could potentially help lower your home’s electricity costs. A green personal loan can help you manage the upfront costs of purchasing and installing these green technologies.
Telephone and internet
Just like the energy in your home, the way you use your phone and internet services may have changed dramatically over the past couple of years. If you are paying for features, benefits, and services that you no longer use, or are looking for new phone and / or internet services, there may be other options available.
You may have to pay cancellation fees and other costs when you change your telecommunications provider, for example when you break a fixed contract. That said, introductory offers from some vendors can help offset some of these costs.