One easy way to save money is to conduct a bill audit. Many people and businesses stay with their current service providers, either out of loyalty, or due to the time and effort involved in searching for a new one. We often sign up to providers because they are well known, or offering a great ‘honeymoon’ deal – where you get added benefits for the first year. However, after the first year, that initial deal which has been used to draw you in as a customer, is removed. The price or interest rate goes up, or the inclusions become less, and yet we stay. So how much money can you save by either conducting your own or hiring someone to complete a bill audit? Last year I completed a bill audit for someone, and the list of cheaper providers which I gave her had the ability to save a huge $900 per month. $900 – that’s an extra $10,800 a year which could have been saved just by auditing and changing providers.
When conducting my own bill audit, I break my bills down into two groups – those that have a renewal notice, and those that don’t. The providers that send out renewal notices, such as car insurance, home and contents insurance, road side assistance, etc. are audited when that renewal notice comes through. The first step is to call my provider and check if I am eligible for any type of loyalty discount or if there are ways to reduce the premium. For example, with car insurance one year I received a discount while on maternity leave because I was always home and the car wasn’t being used. Recently, due to the Victorian lockdowns, I had my premium reduced by moving to a Pay As You Drive system. This brought my insurance premium down by $155.
After speaking with my current provider, I shop around. It is a bit of work, but I run comparisons on different providers, and see who is cheaper or offers more for my money (such as sign-up bonuses like gift cards, movie tickets, etc.), and if my provider is no longer the best – I change. It’s nothing personal, I just want to ensure I am receiving the best possible deal. An important thing to remember is that the best possible deal is only on a service that meets your requirements, so compare apples with apples. Changing from a high-speed internet service to one that is as slow as dial up, but is cheaper, isn’t going to make you happy in the long run – unless you wanted a slower speed. It’s important to compare the features and inclusions of the products in addition to the price.
The other group is providers who do not provide renewal notices. These providers often become forgotten, and we remain with them for significant periods because the only reminder that they exist is the actual periodic bills themselves. To make it worse, now that direct debit is often used as a payment method, sometimes the bills aren’t even looked at so these providers remain forgotten. These providers include gas, electricity, home/car/personal loans, telephone, internet, private health insurance, etc. I should be auditing these on a more regular basis, but at this stage, it’s usually every 2 years. Some of these providers are harder to compare than others, but it is still worth doing and can save you significantly – much of the potential $10,800 saving I mentioned earlier related to providers in this category.
So the next time you receive a renewal notice or a bill, make sure to call around – it always pays to do your homework. It just could pay for your next family holiday!
Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.