Thanks for your great response to Plug Your Money Leaks: Ideas that Really Work. We’ve got five more tips to share with this follow-up article.
We know how easy it is to let money drain from your wallet without even noticing. Let’s dive into some practical strategies for plugging those pesky leaks.
1. The purchases you make for convenience
Buying from a convenience store or petrol station might save you time, but it doesn’t save you money.
Unlike supermarkets, convenience stores aren’t in the business of selling high volumes at low prices. They’re more likely to make money on their margins, which means price mark-ups can be pretty hefty. Of course, this depends on the store location and products you buy.
If making purchases for convenience has become a regular habit, you’re not alone. The convenience industry in Australia is worth more than $8.3 billion. It’s growing at a faster rate than the pharmacy, liquor and grocery industries. Takeaway coffee, cigarettes and ‘on the go’ foods such as sandwiches and pies are among the biggest sellers.
Unless you have a photographic memory of supermarket prices, it can be hard to know how much extra you’re paying when you shop at a convenience store. Help jog your memory by storing photos on your phone that show supermarket prices. When you’re at a convenience store or petrol station and about to make a purchase, pull out these photos. Compare prices to see how much you’ll be out of pocket.
2. The monthly mobile plan you exceed
Each year Australian smartphone users hand over around $300 million in fees to Telcos for excess monthly data use. The number of us who stream and watch live TV on our smartphones has tripled since last year, according to Deloitte’s 2017 Mobile Consumer Survey.
Paying for a plan and then going over it is an expensive way to use data. To get on top of how much you’re entitled to use each month, sign up for alerts that notify you when you've almost run out. When you’re close to your limit, turn on ‘data saver’ mode which restricts the background use of data when not on wifi. Also, go to settings and check that your phone is set to wifi when updating apps or backing up photos.
Before you head out for the day, ensure you’ve downloaded your favourite podcasts, TV shows or music albums from a streaming service for offline access. Even Google Maps and Apple Maps allows you to download maps for offline use.
3. The bank fees you could avoid
Losing money to credit card interest charges and bank and ATM fees is a common money-waster.
Credit card interest is one of the most expensive forms of debt, costing Australian cardholders around $700 per year.
While banks are beginning to abolish ATM fees, there are a host of other fees to be aware of. These include monthly account keeping, foreign transaction, over-the-counter withdrawal, dishonour, late payment, overdrawing approval and credit card over-limit fees.
Avoid this unnecessary money drain by keeping your finances organised or using a fee-free bank account.
4. The items you never return
How many times have you bought something based on the thinking ‘if I don’t like it when I get home, I’ll return it’?
Now, how many times have you returned any of these purchases?
Not returning items because you are too busy, or you forget is a common money waster. By the time you remember, it’s usually too late to get a refund.
Your chances of returning an unwanted item plunge if you’re shopping out of your local area. For this reason, it pays to resist the temptation to buy unless you’re confident that:
a) it’s an item you need
b) the location is convenient should you have to return it.
5. The gift cards you let expire
Every time you allow a gift card to expire you’re donating money back to the retailers. Expired gift cards are such a problem that consumer groups have long called for changes to their terms and conditions.
Reforms in NSW have already taken effect (as of 31 March 2018) forcing retailers to extend gift card validity to a minimum of three years. Post-purchase administrative fees that reduce the balance on gift cards are now banned.
To help keep your gift card front of mind, be sure to store it in your wallet for easy access rather than forgotten in a drawer at home. It helps to make a note of the expiry date so that you can set several calendar reminders in the lead-up.
If you’ve received a gift card you don’t want, sell it for cash or swap it for a card you like better at an online exchange marketplace. While you’ll never make back the full amount, it means less money down the drain.