Financial Review Smart Investor Deputy Editor Penny Pryor is here to help with some great 'cash-stash' tips. She's pulled together a wad of tips that could fatten your wallet, no matter the outlook.
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Things are tough. Whether or not you’re feeling it in your hip pocket yet, all that talk of a second GFC is making you nervous – and you may be wondering where you could make, or find, some extra cash if need be.
So don’t just fret, do something: Find that “lost” money or negotiate a new deal on your phone-and-internet package. You could come out hundreds of dollars ahead.
Lost and found
1. All is not lost! You might have heard of the Australian Taxation Office’s SuperSeeker website. If not, check it out, because there could be hundreds of dollars waiting for you. The average amount in an unclaimed superannuation account – and there are more than 6 million such accounts – is $1036. Grab it before fees eat it away. All you need is your tax file number and personal details.
2. Super isn’t the only lost money waiting to be found. There could be bank accounts you’ve forgotten about. Go to the unclaimed money tool at ASIC’s MoneySmart site.
3. There could also be an inheritance you don’t know about. The Public Trustee in your state has responsibility for unclaimed estates, so try them first.
4. There may even be shares you’ve forgotten or didn’t know your aunt or grandfather had bought in your name. Try the registry services of Computershare, Link Market Services and Boardroom Pty Limited. Or there’s a paid service called delisted that will go looking on your behalf.
5. And don’t forget dividends. You can check with the company itself, the share registry services listed above or the responsible state government department – the Office of State Revenue in NSW and Victoria; the Public Trustee in Tasmania, ACT and Queensland; the Department of Treasury and Finance in Western Australia; and the Territory Revenue Office in the Northern Territory.
6. If you’ve invested in managed funds via a financial planner you could be paying commissions to a planner you haven’t seen for years. Even if you bought direct from a provider, without advice, someone you’ve never met may be earning commission from you. Sign up to a commission rebate service and you stand to save an average of $618 every single year according to our survey in our June 2011 issue.
7. Although most commissions on life insurance are paid up front, you could still receive some rebate for existing policies. For example, on a life insurance policy with a premium of $4800 a year you could receive a rebate of up to 35% per cent of what you pay.
8. If you used a mortgage broker to find a home loan your lender will be paying the broker a commission. Many of the commission rebate services have started their own mortgage finance arms so they can rebate that commission to you. You’ll have to refinance, but a rebate of just 0.2 of a percentage point is a saving of more than $11,000 on a 25-year, $300,000 loan on which you’re paying 7 per cent interest.
9. Even if you’re pretty sure you’re not paying commissions it might be time to look around to see if you can get a better deal on your home loan – especially now exit fees have been removed on new products and slashed on many existing ones. The average rate of the best four lenders is about 6.7 per cent, compared with the average of 7.8 per cent for the big four banks. On that $300,000 home loan the difference is $63,771.20. And if you continued to pay the higher monthly rate but on the cheaper home loan, you’d pay the loan off in 20 years instead of 25, saving $138,223 in interest.
Phone it in
10. If you’re coming off a mobile phone contract it might be time to look around for a better offer. Even if you think you’re on a good wicket, chances are there’s something even better out there. There are now deals as cheap as $19 a month, post paid. These don’t include the handset and you’ll have to keep an eye on data usage, but compared with the $100 a month you could be paying now that’s a saving of $960 a year. It might even be worth paying out your existing contract.
11. The same goes for your internet service. Depending on how much data you use, you might be much better off somewhere else. Make sure you have an idea of how much data you’ll use a month. If you have teenagers downloading movies you might want the maximum, or a deal where service is slowed – rather than extra being charged – once the limit has been reached.
12. Packaging a mobile phone and home phone can be worthwhile, but before you even look at this consider if you actually need a home line. If your internet connection is good enough you might be able to rely on VoIP for most calls, with your mobile phone as backup. You stand to save at least $360 a year. But make sure your mobile phone battery is always charged for emergency calls.