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Everyday debt solutions

An image of debt being erased

It’s possible to save hundreds and potentially thousands of dollars by reviewing the ‘free money’ you’re giving large corporations.

When it comes to debt solutions, all too often the default option is to opt for self-sacrifice. Give up that $3 coffee that brightens your working day, cancel that weekend away you’d planned to recharge your batteries, sell your car and endure the inconvenience of using public transport. All those things may be necessary, but before it comes to that, make sure you’re not paying excess money to large corporations that need it a lot less than you.

Are you over-insured?

Quite likely you’re paying thousands of dollars a year for various types of insurance: house and contents, car, health and possibly life or income-protection insurance. While it is probably not a wise idea to cancel any of these policies, it is certainly smart to put aside a few hours to carefully study the policy statements and discover if you’re paying more than necessary.

Do you have the most comprehensive and thus costly health insurance policy when you’re healthy and unlikely to be making a claim? Do you have the contents of your home insured for $100,000 when you’d only need $20,000 to replace the essentials? Could you significantly reduce the cost of premiums by agreeing to pay a larger excess in the event of the claim?

Even in the event you find you have insurance policies precisely tailored to your current circumstances, chances are that there’s another company that can offer you the same coverage at a lower charge.

Get off the phone

Just as with your insurance policies, you can save big by carefully studying your utility bills. Are you spending $80 a month for a landline that you only use once a week? Could your internet service provider (ISP) provide phone calls over the internet (VoIP) where most calls are free?

Power down

Power costs have been skyrocketing in recent years. Your existing power company will likely offer you a discount of anywhere between 10 to 14 per cent if you ring up and inform them that you are considering taking your business elsewhere, and most of their competitors will match any deal your current provider is offering. If you’re spending $3000 a year on power, that’s another $300-$420 in your pocket from a quick phone call to your provider.

Make sure your money is working for you

You should be getting 4 to 5 per cent interest on any savings you have. If you’re not, find a bank that can provide you with a high interest savings account or term deposit. It might not seem like much, but earning another couple of per cent interest on your savings will, over time, add up to a substantial amount.

Debt solutions usually involve making some personal sacrifices, but you can make big savings by doing some clever research and taking the time to investigate your options.