During a cost of living crisis, many of us look for obvious ways to cut expenses, like cancelling streaming services, dining out less, and skipping extras in our shopping baskets.
But what about the less obvious ways?
Sneaky fees and charges can increase our day-to-day living expenses without us realising it.
Here are some hidden or avoidable costs that could be draining hundreds from your annual household budget.
1. Service Fees
Do you check restaurant bills before paying? You might read over the items, but what about the fine print?
Some restaurants and cafes include an automatic service fee. Not a card payment fee or public holiday surcharge, but additional fee, sometimes up to 12%.
When queried, it may be explained as a discretionary tip to service staff. This means you have a choice – ask to be sure – but remember the business owner is struggling to survive too.
Be aware though, that if the fee is for service staff, then you tip your server on top, you could be paying way more than you should.
Check all charges on your restaurant bill and question anything you don’t understand.
2. Travel Insurance
An absolute necessity for all travellers, but if you haven’t kept up to date with your credit card’s T&Cs (and who does?) you may be doubling up.
Competition among credit providers has resulted in many offering complimentary travel insurance provided you pay for your travel using their credit card.
Read the fine print to ensure you meet the qualifying conditions, the policy is underwritten by a reputable company and covers what you need. Understand the claims process and make sure the company has an emergency contact line easily accessible from overseas locations.
Additionally, many policies cover car-hire excess. This excess can be costly if purchased through the car hire company and unnecessary if it’s already covered in your travel insurance. Double-check your policy!
3. Bonuses That Aren’t
Warrantees on purchases where for a small additional charge you get extra cover, can be unnecessary or over-priced. Take a close look and cancel or downsize if required.
Subscriptions with free trial periods can be traps ready to spring the very second the trial ends.
Ensure you:
- understand the cancellation procedure before signing up,
- set a reminder on your device for a day before the trial ends then cancel if need be.
4. Ad-free Apps
Many apps are free provided you can put up with advertisements. Try free versions first, then if ads become annoying, upgrade to the ad-free version later.
5. Life Insurance
Life insurance is designed to pay your debts and support your dependents if you or your spouse dies, becomes ill, or disabled.
So, if you’ve paid off your home, you’re debt-free and kid-free – or at least they’ve flown the coop – should you still be paying for life insurance?
Your financial adviser can help you answer this question.
6. App Store Audit
Google Play, Amazon Appstore, Apple App Store, are just a few app stores available.
Check your devices for one or more of them. Open the app, navigate to the Payments and Subscriptions menu and open Subscriptions. You may be surprised by the things you’re paying for.
It’s easy to lose track of everything we, or family members, have signed up for. Asking the right questions, checking the fine print and auditing subscriptions and apps, can add up to some serious annual savings.
Similarly, your financial advisor can help you reduce costs by reviewing and consolidating insurance policies, savings and superannuation investments.
It’s tough out there and everyone is seeking ways to increase revenue and reduce running costs. Your household is no different – it’s in your hands and it’s do-able.
| The information provided in this article is general in nature only and does not constitute personal financial advice. |