Unused gym membership, super fees: Four things to stop paying for this year
All of us overspend from time to time. After all, nobody's perfect. But ongoing spending habits or ill-suited financial products can be a major drain on your bank account in the long run.
The new year is a great time to review your financial situation and work out where you could be saving. With this in mind, below are four things to stop paying for in 2021.
1. Unused gym memberships
We all start out with the best of intentions when signing up to a gym, but some of us eventually fall off the bandwagon.
Finder research shows that 50% of gym members attend the gym less than once per week, while 20% show up less than once per month. If the average cost of a gym membership is $780 per year, those who go less than once a month are paying the equivalent of $65 per visit - not exactly great value for money.
If you're not making the most of membership, you may be better off terminating your contract. But make sure you're familiar with your gym's cancellation policy first.
Some gyms may charge an exit fee and require you to pay out a portion of your outstanding membership balance if you decide to opt out early. You'll therefore need to work out whether it's cheaper to cut ties or continue - this can differ depending on how far along in your contract you are.
Instead of forking out for costly gym membership fees, consider paying a little bit extra for a casual visit. Make the most of free online workout videos, or focus on simple outdoor exercises like running, cycling or body weights.
2. Superannuation account fees
One of the biggest downsides to having multiple super accounts is that you'll need to pay two (or more) lots of fees, which can cost hundreds of dollars each year.
If you think you may have lost super floating around, investigate as soon as possible. Start by linking your MyGov account to the ATO. The ATO has a free online tool that allows you to search for any lost or unclaimed super. You can then consolidate your existing super accounts into your preferred fund in a few simple steps.
Keep in mind that there may be potential risks to consolidating your super if markets are volatile. You may also risk losing the insurance benefits of one fund that you may not get from another.
Make sure to get the full picture before merging your accounts. Chat to your super provider for information about exit fees and any other effects that consolidation may have on your current benefits before making your decision.
3. Car insurance that doesn't suit your needs
Most car insurance policies are valid for a 12-month period. But a lot can change in a year, as we've all seen. This means it's important to review your situation each time your policy is up for renewal.
Finder research shows that one in five Aussies (22%) don't feel like they're getting good value for money on their car insurance. That's equivalent to 3 million Australians who think they could be getting a better deal. In spite of this, only 17% have made the switch to a better offer.
If you don't use your car very often, or only drive short distances, you might be able to save money on your premium by finding an insurance policy that rewards low-usage. For instance, you might still be working from home due to the pandemic, and no longer drive to and from work each day. Your insurance policy should reflect this.
By switching to a pay-as-you-drive car insurance policy, you could save around $293 on your yearly premium. The difference in yearly premiums for someone who drives 5000kms versus someone who drives 30,000kms could be $200 or more.
4. Unused subscriptions
Most streaming subscriptions are relatively cheap, meaning they can be deducted from your account unnoticed. But if you're subscribed to multiple services, this can start to add up - especially if you're not using all of them.
Take a look at your most recent bank statement to see what subscriptions are currently being debited from your account. From here, cancel any that you're not using. For instance, you may have subscribed to Stan while your kids were on school holidays, but you might choose to cancel it after they go back to school and no longer use it as much.
You should be able to suspend most of your streaming subscriptions fairly easily, as they generally run on a month-by-month basis. It's also important to set calendar reminders for any free trial periods that you've signed up - before you know it these can roll into an ongoing monthly subscription.