Fix your finances in 2020 and save over $3,000

Start the new year with more money in your pocket by making four simple changes to your finances – it may save you over $3,000 in 2020.

1.HOME LOAN – switch and save $2,683

If you have 25 years left on your $400,000 home loan and are paying the average rate of 3.75 per cent and switched to the lowest rate on the market, you’d save $224 a month and $2,683 a year.

Savings when refinancing from average to lowest rate – owner-occupier (P&I)

Notes: Based on an owner occupier paying principal and interest (P&I) switching 5 years in to a 30-year loan using the average rate on RateCity.com.au. Does not factor in fees. Average rate based on average owner-occupier P&I variable rate on RateCity data base. Data accurate as at 14 January. 

Consider looking for a home loan with:

• A rate below 3.20%
• $0 annual fee

Keep in mind that there are typically costs associated with refinancing your mortgage. For more information, please read our Refinancing Guide.

2.CREDIT CARD – switch and save $305

You may significantly reduce your credit card interest payments if you switch to a low-rate and no fee alternative.

The latest RBA statistics show the average credit card account has $1,980 outstanding at the end of the month.

The average credit card interest rate on RateCity’s database is 16.66 per cent, while the annual fee is $131.

However, if for example you switched to NICU credit card, you’d pay 8.99 per cent and $0 respectively.

If you made minimum repayments (2 per cent) on a balance of $1,980 debt over 12 months, you’d be charged $341 interest on the higher-rate card but only $167 on the lower-rate card.

Differences between credit cards

Notes: Figures based on a balance of $1,980 over 12 months. Annual interest repayments assume minimum monthly repayments of 2 per cent and factors in annual fee. Interest calculated monthly. Data accurate as at 14 January. 

Consider looking for a credit card with

• No annual fees
• No ATM charges
• No foreign exchange and ATM fees

3.TRANSACTION ACCOUNT – switch and save $63

You can save a lot of money by shopping around for a no-fee bank account. There are now a growing number of banks that offer accounts with no monthly fees, as well as perks like no overseas exchange fees and ATM charges.

On RateCity’s database, the average monthly fees on a transaction account is $5.25 a month. That’s $63 a year.

However, 72 per cent of transaction accounts have no monthly fees, so it’s easy to find a fee-free option if you do your research.

Differences between bank accounts

Note: Data accurate as at 14 January. 

Consider looking for a transaction account with:

• No monthly fees
• No ATM charges
• No foreign exchange and ATM fees

4.PHONE PLAN: switch and save $240

Another way to save money in 2020 is to switch from a phone plan with a big brand to a similar plan with a lesser-known company.

Let’s say you own your own phone and want at least 15GB of data per month, unlimited calls and texts and access to a high-speed 4G network.

Telstra’s Small plan offers all that for $50 per month, whereas Amaysim offers these features as well as 25GB more data for $20 less as well as the bonus of unlimited international calls to 10 countries.

Differences between phone plans

Note: Data accurate as at 14 January. 

How to begin your $3,000 savings journey

One of the easiest ways to find more competitive bank accounts, credit cards or home loans is to use comparison tools, such as tables and calculators.

• Comparison tables are a helpful way to compare apples with apples. You’ll filter down and view a range of options side by side, so you can clearly see their interest rates, potential repayment amounts, fees and any features.
• Calculators can allow you to see if you can afford one or more options you’ve compared. This is done by showing you your potential monthly/fortnightly/weekly repayment amounts.

Comparison tools can be helpful for budgeting or judging which options will cost more over time due to interest rates or fees.

Keep in mind that switching financial products can incur fees, such as upfront fees. Make sure you do your research and read the Product Disclosure Statement of your new product before you commit to anything.

By making the switch to more affordable loans, credit cards, or bank accounts, you could kick some financial goals early in 2020.

Compare bank accounts