Little Things You Didn’t Know Were Burning A Hole In Your Pocket (& How To Stop Them)

Between rising housing costs and insecure job markets, many of us experience what experts call “financial trauma”. On top of that, it can feel like there are so many apps, services and subscriptions that it’s hard to keep up with all of the fees and costs, leaving young Aussies feeling overwhelmed by their current and future finances.

Thankfully, the superannuation wizards* at Rest (*not actual wizards, sorry) have commissiond a survey on the financial habits of Australians, revealing some fascinating results. If just the thought of someone taking a peep at your spending makes you mildly sweaty, don’t panic! We’ve summarised the most important findings to offer practical solutions. The best part? You can make a start right now. (But maybe read the rest of this first.)

Don’t Be An Ostrich

Rest’s research shows a whopping 42 per cent of Australians actively avoid looking at their finances, with four-in-five admitting they avoid taking action because they’re too busy, it takes too long, or don’t know where to start. Personally, I bury my head in the sand during times when I most need to reconsider my habits. If I throw away the receipts, it’s like I never ordered take-away three times in one day, right? Wrong.

While it can be easy to get caught up in day-to-day life, and forget about the costs hitting our hip pocket, it unfortunately means $6.5 billion goes down the drain annually. The first (and arguably most important) action to take is a closer look at your finances.

Subscription Surplus

Streaming services have made our lives more convenient, but with countless entertainment platforms now available, heaps of us have signed up without asking ourselves if it’s necessary. How many times has a “free first month” turned into a long-term relationship because you simply forgot to cancel the subscription?

It turns out, 62 per cent of Australians are paying for a service they don’t really need. This includes things like apps, which often quietly take a small fee each month without your knowledge – and over time, it really does add up. In fact, Aussies are losing $3.9 billion per year on paid subscriptions and services they aren’t taking full advantage of. However, despite these significant costs, almost half (44 per cent) of Australians have never cancelled subscriptions they weren’t using.

Take a look at any entertainment-related costs and any subscriptions you have and ask yourself if you’re really benefiting from them. Over a third of Australians have reduced their services to avoid doubling up (for example, choosing Stan over Netflix, or vice versa!) and, over time, are saving themselves some serious coin.

Super Surprises

Superannuation enables you to cash a kind of golden ticket once you reach that magical retirement age. No more 9-to-5, no more getting out of bed at Crazy O’Clock and, ideally, enjoying 20 years of doing whatever you want with your days.

But there are a few things you should do in the here-and-now to make your hard-won retirement as awesome as possible. Those multiple super accounts you accumulated when you were packing shelves at supermarkets or doling out drinks at bars?  You might want to combine your accounts so the cash you’ve earned isn’t being whittled away by multipe sets of fees.  Before combining your account, check how it might affect your insurance in your other funds.

According to the Australian Taxation Office (ATO), a whopping 39 per cent of us have multiple super accounts – and might not even know it. The government’s Productivity Commission report into superannuation found that a worker with two superannuation accounts across their working life will be $51,000 worse off at retirement than someone with just one account. That’s because Aussies with multiple super accounts spend an estimated $2.6 billion every year on excess administration fees and insurance premiums – and that’s on top of the $3.9 billion I mentioned earlier.

I was in this category until recently, and truthfully had avoided dealing with it because I assumed it would be super difficult (see what I did there?) … It turns out I easily consolidated my super within a few minutes. Ta-da!

Given the lack of time Australians have to sit down and look closely at their finances, it might not be a shock to learn that one in five of us have never checked our superannuation fees. You wouldn’t choose to pay fees for a subscription you aren’t using, so why do the same with your super?

Avoidable Fees

Rest’s research shows that, across all age groups, Australians are concerned about paying additional fees – and it’s certainly difficult to budget if you can’t predict the exact dollarydoos you’re liable for. If you’ve noticed these costs and felt frustrated, you’re not alone! Most of us feel cheated when we realise our pockets have been pinched.

We all know the frustration of making a payment online, only to discover the total cost is more than we originally thought. Where exactly do these “admin” and “booking” fees go, anyway? You’re literally doing the admin yourself!

It pays to double-check the terms and conditions when you pay for something online. Yes, it’s easier to just click “agree”, but consider alternatives: for example, it may be free to collect tickets from a box office but an additional $10 to have them emailed to you. Annoying? Maybe. Having a nice drink before the show instead of paying for nothing? Worth it.

Direct Debits

Many vital services, like household bills, prefer you to pay direct debit (and sometimes you save on some of those admin fees for choosing this option). But if you check what exactly is getting automatically debited from your account, it might surprise you to find it’s not just gas and electricity.

Is that digital magazine you read once quietly taking a few dollars each month? Is the gym membership you pay for, but rarely use, really helping you achieve fitness goals? Are these hypothetical questions becoming meaner and scarier with each one? Sorry, I’ll stop.

We know we sound like a broken record, but seriously, just taking a look at your statements, from your bank, your super fund, or otherwise, really pays off. And it’s already most likely floating around cyberspace – win! This is the single most common method of discovering an unwanted payment, and as someone who actively avoids life admin, this might just be too straighforward for me to even wiggle out of, guilt-free anyway.

The Bottom Line

Believe us when we say the single most important thing you can do is take the time to look into your finances. It may initially cause feelings of concern, but don’t beat yourself up – you’ve taken the first step! There are solutions available that will make a difference in the long run. The littlest things add up, so even the tiniest of tweaks will help fill up your piggy bank for the future.

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Worried you’re throwing money down the drain? Find out more about saving on avoidable costs and combining your super accounts now. Speak to a financial adviser to check how switching super might affect your insurance and benefits in your current account.

The views and opinions expressed in the above article are those of the individuals involved and do not necessarily represent the views and opinions of Rest.

Product issued by Retail Employees Superannuation Pty Limited, ABN 39 001 987 739 as trustee of Rest (Retail Employees Superannuation Trust ABN 62 653 671 394). Go online for a PDS to consider before deciding.

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(Lead image: Atikh Bana / Unsplash)