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Unseen charges like hidden fees, unnoticed subscriptions, or convenience costs can quietly pile up, leaving your budget stretched thin. Research from a 2023 Savings.com.au survey revealed Australians waste an average of $1,261 annually on unused subscriptions and forgotten payment!
Spotting these costs might help reduce unpredictability in your finances, so you can feel more in control of your monthly budget, and score some extra savings along the way!
Let’s take a look at some common hidden expenses, red flags to look out for, and actionable strategies to manage them.
Hidden subscription costs can drain many budgets, often without people knowing!
Services like streaming platforms, gym memberships, or mobile apps often operate on auto-renew. As automatic payments, these can be easy to overlook. In fact, Australians reportedly waste nearly $4 billion annually on unused subscription services!
Auditing your subscriptions regularly can help you track these charges and decide whether you still need the service. See more tips on how to manage your subscription expenses.
Banking and credit-related charges—like monthly account maintenance fees, ATM fees, or credit card interest—can add up quickly. In a 2022 report the Reserve Bank of Australia reported Australians forked out $3.3 billion in bank fees for the year prior!
It’s generally a good idea to check the fee structures of your various financial products and consider switching to a low- or no-fee account. Some banks may also waive fees if you meet specific deposit criteria.
Find out more about other bank fees to look out for.
Checking the details of your energy and utility bills can help uncover whether you’re paying extra for features you rarely use, like unlimited internet data or higher-tier energy plans.
In 2023 the Australian Competition & Consumer Commission found that Australian residents were paying more on their electricity plans when compared with prices available to new customers.
Energy comparison tools like Beforepay’s Compare and Save can help you find potential savings with other utility providers.
These are small but frequent convenience fees that can sneak up on your budget, like food delivery charges or express shipping costs. For example, choosing delivery over pick-up might cost an extra $7 per order. If you multiply that by weekly usage, that’s an extra $364 you could save annually by switching habits.
Try planning ahead to minimise reliance on convenience services, and opt for alternatives like free store pick-up where possible.
Identifying hidden costs requires a keen eye on your spending habits. Here are some steps you can take to identify hidden costs you might be paying and uncover extra opportunities for savings:
Spend one weekend reviewing your bank and credit card statements for the past three months. Categorise expenses into “needs” and “wants” to spot costs you can avoid in the future.
Ask yourself if specific expenses align with your financial priorities. For example, is a premium streaming subscription necessary? Can you opt for a basic plan instead?
Keep an eye out for unfamiliar charges, frequent small amounts (these can add up over time!) and any charges that exceed a certain threshold. It’s also worth checking for changes in your subscription or service rates, which might happen without you noticing.
Whether it’s your internet plan, mobile subscription, or energy provider, negotiating can often lead to discounts. Comparison sites like Finder, iSelect or Compare and Save make it easy to find the best rates and deals suited for you.
Create rules for discretionary spending, like limiting takeaway meals to once a week. This small habit could save hundreds over time.
Unlocked extra savings by finding hidden costs you were able to cut? Redirect these funds into a savings account to help build your emergency funds over time. Doing this also helps create a psychological incentive for you to spend mindfully.
Hidden costs can derail even the best-laid budgets, but with awareness and proactive steps, you can manage them!
Start by auditing your spending, spotting red flags, and taking practical actions like switching providers or using budgeting tools. These changes might free up extra cash for savings or unexpected needs, helping you stay on track.
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