This is part three of our budgeting series, showing you step by step how to take control of your money and get on track for a stress free retirement. If you missed them, links to Part 1 and 2 are below.
Thanks Mike and Helen for allowing me to share how you saved more than $15,000 per annum, using our "9 Pro Tips". Mike and Helen are super determined to build some new habits now so they can remain living the good life well in to retirement.
They are showing us all how to get it done!!
Compare and switch mortgage providers
Do not think that Banks reward loyalty. In fact, the opposite is true. If you have not reviewed your mortgage in the last 3 years, chances are you are paying too much. Rates can vary by as much as 1.5% between lenders.
Mike and Helen saved 0.66% on their $400,000 loan, so savings of $2,640 per annum.
(So, you rent, I hear you say. Do you really need all the bedrooms you have or would a smaller place work? Even if you cannot rent cheaper, could moving closer to work save on transport costs. Reducing rent by $40 per week is $2,000 per year).
Compare health insurance
Mike and Helen used the hospital options a bit, but they didn’t use the extras much. They did a comparison, changed their plan to incorporate only what they need and are saving the difference. They also changed the excess from $250 to $500.
Total savings from now on will be $2,340 per year and Helen tells me it took less than 10 minutes to compare, switch and save money!
House and car insurance
Mike and Helen did a complete audit of their property and car insurances. They did some shopping around and decided to stay with their existing insurer.
By adjusting their existing policies however, they saved $640 and feel they still have all the coverage they need.
Helen admitted that a lot of the groceries she bought didn’t get used and ended up in the bin. She sourced an amazingly simple menu plan online, only buys what she needs for the plan and now gets out of Coles as quickly as she can.
Estimated savings, $100 per week, $5,200 per year.
Great going Helen!!
Phone and internet provider
They have always been with the same, large provider. They were able to get a similar contract for 2/3rds the price. They also got rid of the home phone, because they couldn’t remember the last time they used it. Because they owned their mobile phones, they were able to switch to another provider with no hassle.
Savings - $1,260 per annum.
Know and claim work expenses
They began tracking work and investment related expenses. Things like laundry, courses, travel, computers, phones and some meals could be claimed, because of their jobs and investment portfolio.
Savings: Estimate $960 per annum tax back.
Mike and Helen had a lot of subscriptions (Stan, Netflix, Audible etc). They logged in to PayPal and cancelled everything they didn’t think they would use much over the next year.
Savings $650 per annum
Other bits and pieces
Here are a few other things that Mike and Helen did, each for modest savings.
Savings in total here of say $2,000 per annum.
Implement the anti-budget
With their new found riches, Helen and Mike immediately implemented the anti-budget. They increased loan payments to ensure their mortgage was on track to be done and dusted before retirement, and with the remainder, made tax deductible top-up contributions to super.
I expect this will add a bit over $200,000 to their bottom line over the next 11 years to retirement.
An extra bonus here is that with their new found habits, their retirement nest egg will go so much further.