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066: 7 Steps To Save Thousands On Household Bills
916 Plays2 years ago
With the cost of living on the rise, a key way to save money is to comparison shop your major household bills. In this ep we’ll help you get an understanding of the payoff to a methodical approach, seven steps to make your choices straightforward and point you to the best comparison websites.
We start this episode talking about why you need to make the effort to comparison shop - not only to save money but also to give peace of mind that your product or service fits with your needs. We also chat about the frustration that most providers offer the best discounts and deals for new customers. This means you need to accept that you'll need to do the work if you want to save money.
We also talk about the challenges of finding the time and the complexity of comparison shopping:
- We have more products that we need to choose due to the privatisation of services like utilities
- It can be complex to choose between the hundreds or thousands of products out there
- 'Satisficing' - achieving a good result as fast as possible by choosing something sufficient that satisfies you - will yield a better result than trying to find the best possible deal.
We also talk about the elephant in the room: making the time to get the comparison shopping done. We recommend you set up a regular Hour of Power in your schedule to get more complex life admin tasks done, including comparison shopping.
We talk through the seven steps that make choosing a better deal efficient and effective:
- Take stock
- Jump onto your online account or review recent statements – to gain an understanding of your current plan, assess your usage and sense of value
- If it's a product you're not that familiar with, listen to one of our podcast eps or dive into the relevant book chapter, where we break down the jargon and the typical product features
- Then think about what will make you happy. Is it saving $100 a year or $500? Is it getting more convenient service in some way? Or simply peace of mind that you have the right product for your needs? Decide on the goalposts upfront so that you know when you’ve scored.
- Set up your comparison table
- The next step is to create a table to set out the criteria you need to compare
- A comparison table makes it much simpler to pick the best offer, rather than tirelessly going through the features of each, one at a time
- You can use one of the downloadable checklists from our website or set up your own table.
- Compare three
- We recommend that you compare three options: your current provider and two others
- There are diminishing returns if you compare beyond a handful of alternatives, and the more options you compare, the more confused and dissatisfied you will be
- The key thing is to use the best comparison website to find the three offers to compare
- Where possible, you want to use the government websites, so for PHI and energy that is usually your best bet
- Choice, Canstar, Finder and Whistelout are the comparison sites we recommend the most but in our book we recommend which sites are best for which service.
- Make the 'keep me' call
- Sometimes your current provider can offer you a better deal. When you’re armed with the details of what competitors are selling, calling your current provider may b
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Transcript
Introduction and Personal Struggles
00:00:00
Speaker
This is Life Admin Life Hacks, a podcast that gives you techniques, tips and tools to tackle your life admin more efficiently, to save your time, your money and improve your household harmony.
00:00:12
Speaker
I'm Dinero Roberts, an operations manager who used to waste thousands on household bills. Now I'm a comparison shopping machine. I'm Mia Northrock, a researcher and writer who used to borg a coordinate providers to ask for a better deal, but now realizes it's just business,
Guide to Comparison Shopping
00:00:28
Speaker
baby. In this episode, we'll give you a step-by-step guide to go and save some moolah. Hello and welcome to Life Admin Life Hacks. Before we dive into this week's topic, we want to shout out to our latest reviews.
00:00:42
Speaker
Thank you Joanna W. who said this is the best admin advice. It simply changed my attitude to life admin. It saved me time and money, buy the book, it's an excellent reference tool and my life is finally getting sorted.
Life Admin Hacks Book and Listener Engagement
00:00:55
Speaker
Thank you Joanna for that review on Apple Podcasts. If you are enjoying the podcast, if you're getting little pearls of wisdom,
00:01:02
Speaker
please leave a rating and review on Apple or Stitcher or wherever you're listening to us. And if you've bought our book, Life Had Men Hacks, and you're finding that helpful, please leave a review on Amazon Goodreads or wherever you bought the book. It really does make a difference to helping people find some of these answers and drop their mental load.
00:01:21
Speaker
Yeah, so our Book Life Admin Hacks has gone into reprint, which is super exciting. We've recently had some really great events with Ladies Finance Club, Aussie Bizchuck Book Club, and we're now starting to make the rounds at local libraries. So if you'd like your local library or your workplace to run an in-person or a Zoom workshop, please let us know and we'll reach out.
Rising Costs and Saving Strategies
00:01:43
Speaker
We'd love to meet you and answer all your questions.
00:01:46
Speaker
So in this episode, we're going to talk about comparison shopping and we decided to focus on this topic because, you know, you can't escape media reports at the moment about the fact that the cost of living is rising. We're seeing sharp increases in the last few months in Australia in food prices and fuel and rent and property prices.
00:02:05
Speaker
And these inflationary prices are for discretionary spending, like the things that you want, but you don't necessarily need, as well as the non-discretionary items, so all of our everyday cost of living expenses. Interest rate rises, pending, we've been talking for months about this, it's happened in other countries. And so we thought, you know what, this is a great time to focus on how people can save money. One of the key ways you can save money is to comparison shop for your largest household expenses.
00:02:35
Speaker
So that's what we're going to dive into today. Yeah. So a lot of this content will come out of our book. Part four is all about getting the better deal. So we are going to talk about a lot of that content about making better decisions and satisfying. And we have actually also done a previous podcast episode, which you might want to go back and have a listen to episode 33, which was called comparison shopping in an hour.
00:02:57
Speaker
And we talked a lot in that episode about the paradox of choice, and we really focus probably more on everyday household purchases. So I think in that episode, you talked about buying a printer and I talked about
00:03:08
Speaker
how to choose a photo book. So in this episode, we're gonna focus much more on household bills rather than I guess those household items.
Understanding Loyalty Tax and Switching Benefits
00:03:16
Speaker
So in this episode, we'll talk about the understanding of the payoff to a methodical approach, the seven steps we think you should make to make your choices straightforward, and the best comparison websites to use, and a plan just to get started and get on with it. Okay, let's start with the prize. Like why is it worth doing comparison shopping, Diana?
00:03:38
Speaker
Well, I mean, we are going to talk quite a bit about money, but not only does it save you money, it also gives you that peace of mind that the services you've got fit with your current needs. So yes, definitely save money, but also that peace of mind making sure you've got the right product for you.
00:03:54
Speaker
But when it comes to the dollars, it's actually been estimated that Australians pay more than $11 billion a year in what we call this loyalty tax because they're not seeking out the more competitive deals in things, particularly the banking, insurance and utilities.
00:04:10
Speaker
The reality is most providers offer the best discounts and deals for new customers. So the reality is usually every time you do this exercise and switch, you'll come off better off. There is no such thing as getting paid for loyalty these days. So depending on the product category, you can save hundreds or even tens of thousands sometimes when it comes to things like home loans.
Analysis Paralysis in Decision Making
00:04:34
Speaker
Yeah.
00:04:34
Speaker
And people get really peeved through that general idea that, you know, they might be with a company, but that company is offering better deals to new customers. And you're thinking, I'm hanging around. I've been here. I've been loyal. I don't want your silly rewards program. I want hard cash at the end of the day. I want you to give me the best product, but it doesn't always happen. And it's it's annoying having that feeling that you're possibly getting ripped off.
00:04:58
Speaker
Yeah, and I think it really is annoying and it used to frustrate me so much. And then I think once you just get over it and embrace it and realize, actually, I'm going to have to do the work to get the money, that usually you'll be better off. Yeah. So we recognise that not everyone has the time to shop around. We have a lot of services and there's been so much privatisation in Australia that now we have to shop around for our electricity and gas.
00:05:21
Speaker
shopping around for our phone, our internet, our private health insurance, things like superannuation, home loans, homes and content insurance,
Seven Steps for Effective Comparison Shopping
00:05:31
Speaker
your credit card. These are the big household expenses that we're talking about that are worth taking this a monothautical approach to.
00:05:38
Speaker
And these products, they're all complex. You can just wander onto a product comparison site for any of these products and get pretty flustered and then get pretty demoralized by all the choices and the fact that you're going to think this is going to be a production. For example, there are 4,000 different home loan products. No wonder mortgage brokers have a thriving trade.
00:05:58
Speaker
you know there are over three and a half thousand different private health insurance products so we really are drowning in choice and it's very easy to get into this analysis paralysis and do nothing. So that's what we want to help you prevent today by going through the steps. Yeah so we spend quite a lot of time when we're writing the book in particular designing this seven step process that makes choosing a better deal efficient and effective so that you can do it over and over again really quickly.
00:06:25
Speaker
And I guess that comes to a really important point, you know, something that we would like to embrace, which is satisfying. It's a port, you know, those portmanteau words where they've taken two words and mushed them together. Yeah, they've morphed. It's definitely that.
00:06:41
Speaker
What we mean by satisfying is deciding on something that will satisfy you and be sufficient if it meets a certain threshold of acceptability. So what we mean is focus on achieving a good result as fast as possible. The reality is you are never going to find the best, the perfect deal. So you've just got to abandon the idea that you'll find the best deal.
00:07:05
Speaker
and really make sure you get a good deal and that you'll come up better off and that you do this more regularly rather than doing it once and trying to get the absolute perfection because the reality is you'll be way better off if you comparison shop on a more regular basis rather than do some perfect analysis once every 10 years.
Mindset for Comparison Shopping Success
00:07:24
Speaker
That's it. It's like this is going to come up annually. You're not going to get those policy and plan letters or emails that say your plan has expired, your policy has expired. They come every year.
00:07:34
Speaker
So this is an annual exercise. So that focus on just what's going to be great for the next 12 months, as opposed to the one deal to finish them all. That's right. But before we continue, there is one elephant in the room we want to address. And when it comes to life admin, and particularly comparison shopping, people think that the problem is why they have gotten top of it is because either their lack of motivation or discipline or willpower. There's a lot of self-criticism that happens.
00:08:04
Speaker
We talked a bit about this in our episode where we talk about the five myths of life admin. And the other thing is people think that I just don't have enough time or I can do this in magic time. And we know that only about five percent of people actually schedule time in their calendars to do life admin.
00:08:20
Speaker
Comparison shopping is going to take you an hour. This is ultimate hour of power kind of activity. So if you have that regular recurring time of yourself in your schedule, this is the time for the comparison shopping. So if you're yet to do that, if you're yet to schedule that hour of power and realize the glory of the hour of the power, this is your moment to embrace it because this is how comparison shopping is going
Reviewing Current Plans
00:08:44
Speaker
to happen.
00:08:44
Speaker
OK, so should we get started into the seven steps? Yeah, let's do it. OK, so step one, take stock. So the first thing is to jump onto your online account or review your recent statements with the aim of gaining an understanding of your current plan, assessing your usage, getting an understanding of your sense of value, really understanding what it is you're looking at.
00:09:08
Speaker
And if it's a product you're not that familiar with, listen to one of our podcast apps or dive into the relevant book chapter if you've got our book, where we break down the jargon and the typical product features. For financing insurance products, you might also want to have a look at moneysmart.gov.au, where you'll find a summary of the most important features to look out for.
00:09:27
Speaker
So look at things like how much did you spend? Does that feel like too much? Were there product features that you didn't use? Were there allowance or benefits you would have liked more of? What are the things that are important to you? So then think about what will make you happy. Is it saving $100 a year or is it saving
00:09:48
Speaker
500? Or is it actually getting more convenient service in some way? Certainly when I comparison shop for home loans I was looking for a way better online
Setting Up a Comparison Table
00:09:56
Speaker
banking experience. Or is it simply the peace of mind that you've got the right product for your needs? You really need to stop and consider what will make you feel happy with yourself. Decide on those goal posts up front so you'll know when you've scored.
00:10:09
Speaker
Yeah, I think it's really important to have that, to know those goalposts because sometimes you step back and you think, oh my God, I'm just like nickel and diamond now. I'm like fiddling around for the sake of saving $80 and over $80 over the course of the year, depending on how much time you've been spending on this, it's not worth it. But for a home loan or, you know, home and content insurance where it's going to be costing you thousands, it's worth that extra time.
00:10:37
Speaker
to find those little incremental savings. I really like that idea of just getting to grips with the product that you have. And this, I think for some areas, we had a chat recently to one of the presentations we did about the back of electricity bills and all of the jargon and the keys and looking at those tables and just going, what is this telling me? What does this even mean?
00:11:02
Speaker
and getting comfortable with that. It's so empowering to then realise, oh okay, I can see there's a daily service charge, I can see there's megajoules and my megawatts and understand the different the rates and just feeling power that you actually understand this information and you can then make better decisions.
00:11:18
Speaker
Okay, step two is to set up a comparison table. So this is going to help you know what good looks like. And that's when decisions are easy because you can recognize, all right, this offer is actually superior. So a comparison table is simply a sheet.
00:11:35
Speaker
that's going to have your provider, your current provider, a couple of competitors, and the criteria that you're looking at. And it's going to make it easier to pick the best offer rather than just tirelessly going through the features of each provider. So you can use one of the worksheets that we have that you can download from our website. If you head to our resources section, we have comparison table worksheets for energy, internet, health insurance, each of the chapters in the book.
00:12:02
Speaker
You can use an Excel or a Google sheet or just get a scrap piece of paper. But essentially, you're going to write at the top what is going to make you happy. Are you trying to get $100 off, $10,000 off? You want to go green. You want something
Simplifying Provider Comparison
00:12:16
Speaker
more sustainable. You want something that's got rewards points, whatever it might be. You're going to write how long you're able to spend on this. It's like one hour of power or two sessions. And then you have your criteria to work from.
00:12:28
Speaker
Yeah, and I think it's really important to actually set that down on paper. I think it's really easy to start just flitting around, trying to compare in your head one option to another. But if you actually take that little bit of energy to write it down, it will save you so much time in the long run. And certainly once you've done it a few times, if you save those comparison sheets, it makes it really easy because you've got, oh, there are the criteria I used last time. And then you can effectively replicate the exercise in a super fast way.
00:12:55
Speaker
So how many options should you compare? So that really comes to what we call step three, compare three. It's not necessary to compare all the offers out there to find a better deal. And as Mia talked about before, there's thousands of products out there. So even when you talk about internet, there's over 100 NBN providers in Australia and each of them has got multiple products.
00:13:16
Speaker
There are diminishing returns if you compare beyond a handful of providers. So compare three, your current provider and two others. So in Barry Schwartz's book, which we talked about a lot in that previous episode, The Paradox of Choice, he outlines the evidence. It is so clear the more options you compare, the more confused and dissatisfied you'll actually be.
00:13:40
Speaker
It's a huge trap to fall into. So if you use a good comparison website, you can pick two offers to compare to your current plan and you'll be confident you're comparing three good choices and that's all you need to get a better deal.
00:13:55
Speaker
You know, I guess the key thing here is that you're using comparison websites and not all comparison websites are created equally. You want to be going to the reputable ones and you want to be going to the ones that are most comprehensive of the market in that they have the biggest range of providers and the biggest range of plans.
00:14:12
Speaker
And that way you can be confident that the offers you're comparing are actually the best in the market and you can avoid some of that unnecessary complexity. So where possible, you want to use the government websites. So for example, for private health insurance and energy, there are government websites, they have all of the providers, they have all of the plans that are relevant for your state. And then, you know, in different chapters and different podcast episodes, we've sort of identified
00:14:40
Speaker
The comparison
Using Reputable Comparison Sites
00:14:41
Speaker
websites are the strongest in different fields. Overall, we find that Choice, Canstar, Finder and Whistleout are probably the sites we recommend the most. So Choice is a subscriber based service where the subscribers will give feedback about the different products and plans they've tried. But they also do all these objective tests and then they write up reviews and they rate them. You can access Choice magazine and the Choice online site, usually through your local library.
00:15:09
Speaker
can log into your library site you can usually access the magazines and the reports that way. Canstar and Finder, you know they often don't have all of the products but they have significantly more than people like iSelect and Compare the Market. They're much more transparent about which products have paid prominence and you can change the filters so that you are seeing a wide selection and not just the people that they have a you know a deal with some kind of advertising relationship with. The iSelects, the Compare the Markets,
00:15:38
Speaker
any of these services like energy watch they have call centers that's a red flag because if there's a call center they have high costs which mean they need to charge a high commission and based on the listings list the showing so companies won't sell their cheapest products that way if you're paying to be on iSelect or compare the market you're gonna push
00:15:59
Speaker
the products that have the highest margins for you. So you're not necessarily getting all of the providers and of the providers that are there, you're not necessarily getting the full range, you're probably getting the top of the range. So yes, stick to Canstar, Find A Whistler, use the filters so you can see the widest number of providers that meet your criteria.
00:16:20
Speaker
And if you want details like blow by blow, which one should I go to for which topic, jump into the Life had been Hacks book or the podcast episode for the bill that we're talking about and we can point you in the right direction. OK,
Negotiating with Current Providers
00:16:33
Speaker
great. So now you have filled out your comparison table. You're up to step four. So step four is the keep me call.
00:16:41
Speaker
What we mean by that is sometimes your current provider can offer you a better deal. And when you're armed with the details of what competitors are selling, calling your current provider might be all you need to do to save money. And then if your current provider comes to the party with a competitive offer, your work is done. So that can often be a huge win. So last weekend in my hour of power, I did my shop around for house and contents insurance. And after doing my quick comparison table and a 10 minute call to my current provider,
00:17:10
Speaker
they almost match the best deal out in the market. So almost $200 saved. So really definitely worth giving them a call. But if your current provider can't offer you a better deal, then on to step five.
Contacting Potential Providers
00:17:24
Speaker
So call around. So you don't always need to call around. So if it's a mobile phone plan, for example, you might not want to bother getting on the phone. But particularly for those more complex products like
00:17:34
Speaker
house and contents insurance or home loans or private health insurance, or where there's, you know, complexities you want to check. You can call the competitors you've identified or either the one that you think you're going to go with or both of them. It's really good to jot down a bit of a script to guide your chat before you get there. So to make sure that you're really clear the questions you want to ask so that you can really understand how it compares to your current plan.
00:17:59
Speaker
So you can be confident to make that choice. When it comes to calling call centers, it is important to think about when you might want to make that call. The best times to call, most call centers are either right at the minute it opens. So you can have a look in advance to understand whether it's an 8 a.m. open or whatever and put some time in your schedule to make that call. Or usually Tuesdays and Wednesdays are the best days of the week. So have a think about trying to do those days
00:18:28
Speaker
And the other time that can be good to call is in the evenings, if the call centers open in the evenings or on weekends. And certainly when I called my house and contents insurance provider on a weekend, I got through straight away. So you definitely don't want to spend lots of time waiting on hold to make that call, but it definitely can be worth to pick up the phone to make sure that you get the best deal.
00:18:49
Speaker
There are some products where doing the online switch is going to give you a discount but that doesn't mean you can't call what the call centre first and get the info and then go online and get your little discount that way.
Efficient Provider Switching
00:19:01
Speaker
Alright, step six, decide, make the decision and switch. Go back to your goals, realise okay I've actually met my goals
00:19:11
Speaker
and pick the offer that best meets them and there's usually a clear winner. If you're struggling to make the decision it can be helpful to get a little bit of distance from it and think okay if I was talking about this with a friend and I done all this research I said I found this but I can save 90 dollars but I don't know if I can be bothered but I get this and yada yada your friend would just tell you oh my god make this switch already or don't worry about it
00:19:35
Speaker
It's 80 bucks, let it go. Researchers have found that when you, you know, that your advice to other people would tend to focus on the most important factors, while when you're in your own head, flitting among all the different variables and the what ifs, you can just, you know, that's when you can get into that paralysis. So it can also be useful to think about, you know, whether you really care about the minor differences between the options in 10 hours from now or 10 days from now or 10 months from now. Our guess is that you really won't care.
00:20:04
Speaker
You'll have moved on. Life is busy. There are a whole bunch of other things to address. So make the decision, switch, complete the paperwork and lock it down. Awesome. So now the final step, integrate and celebrate step seven. So you'll need to make sure once you've made, if you have made a switch that you integrate the new plan or provider into your life admin systems and tools. So.
00:20:27
Speaker
This includes things like updating your password manager for any new online accounts, opting into paperless communication and direct debits and adding any important documents to your cloud storage. I also love adding that comparison table into my cloud storage too, because that means that I can quickly see how I compared last time when I go to do the exercise again.
Integrating and Celebrating Savings
00:20:49
Speaker
And if you don't have these life admin foundations in place, the first section of our book is a place to go.
00:20:56
Speaker
And it's also important to celebrate, acknowledge the progress you're making towards more optimized finances. And I know that some people also like to think about, oh, maybe giving themselves a little reward. So if you've saved $200 on your house and contents insurance, you might want it.
00:21:09
Speaker
Treat yourself out for. Buy some more contents. Buy some more contents or, you know, treat yourself to a, it doesn't even have to be a lot of, you know, to spend money, but treat yourself to something that's nice for you. You know, go for a nice walk and buy yourself a takeaway cup of coffee and just sort of revel in the joy of saving the money so that it's a reminder that, you know, doing this exercise is worth it. It probably wasn't as hard as you first thought it was going to be. Yeah.
00:21:37
Speaker
We talked about, you know, behaviors. There's that idea that you're looking for behavior change and trying to get a new habit. There's this little sum that's motivation times ability times the trigger. And when it comes to comparison, comparison shopping, the trigger is either.
00:21:52
Speaker
you've got that policy or plan that's come and said it's expired and it's time to shop around, or you've just realised, I need to tighten the belt, we need to save money. The motivation can be that peace of mind and the fact that you will have saved some money that you can put to things that you'd rather be spending your money on. And hopefully this fills that ability component so that this doesn't become a production, that you feel like you're empowered, that you know what criteria you should be looking at, what websites to go to,
00:22:21
Speaker
you know you really only need to look at three all up and then you'll have done your due diligence and when you're getting that humming it really is worth celebrating the fact that you're not just saving the money but you know you're winning at this part of life or this part of that ultimately.
Prioritizing Bill Management
00:22:37
Speaker
Yeah, adulting, adulting success. Okay, so in summary, step one, take stock, get up to speed with what you currently have and what you're currently using of that product. Step two, set up a comparison table. Step three, compare three providers. Steps four and five, make the keep me call or call around. Step six, decide and switch. Step seven, integrate and celebrate.
00:23:04
Speaker
A lot of people say, okay, well, where do I start? Which bill do I start with? And you might like to start with your largest expenses. So looking at your home loan or your insurances, these are usually the things that are.
00:23:15
Speaker
know, kind of eye watering when you're looking at your credit card bill or your bank statements. Or you might like to start with the thing that you've neglected the most. So the other day we had an ABC radio interview where the presenter said for her electricity, I think it was, she had never shopped around, ever. And she'd been living in the same place for like more than six years. And I was like, okay, there are savings there. That is a goldmine. Begin there because there's no doubt
00:23:43
Speaker
that the changes in the market, the products, the competitiveness in that market, that will definitely be a better plan for you there. The economies and markets have never been more volatile than over the last two years. So anything that you haven't reviewed in the last 18 months could probably yield you some savings.
Encouragement to Start Saving
00:24:01
Speaker
Okay, so what are you waiting for? Go and save some money. Our seven steps are a tried and tested approach to getting it done. But like any skill, it can take a bit of practice.
00:24:13
Speaker
But once you taste success and start seeing the savings, I reckon you'll become a comparison shopping machine, just like me. So we hope these hacks will help you get on top of these cost of living rises and equip you to save some money. Our top hacks are to learn to satisfy, find what is sufficient and satisfying, get comfortable with comparing three. There's no need to boil the ocean here and research the whole internet.
00:24:40
Speaker
and focus on the best comparison websites. Don't get sucked into the eye selects and the compare the markets of the world. Thanks for listening. Show notes for this episode are available at lifeadminlifehacks.com. And if you're a fan, please subscribe and share the love and tell a friend or review us in your podcasting app. You can also follow us on Facebook, Instagram and LinkedIn.