Even when we aren't in the midst of an ongoing cost-of-living crisis, January is a great time to make changes that will help give your finances a lift.
Resolving to eliminate junk food and do more exercise will help your physical health, but what about your financial wellbeing?
Our CHOICE experts have crunched the numbers on everything from energy savings to insurance costs to help you save thousands across the year.
Something as simple as switching your health insurance or being more selective about your energy provider can save you hundreds
"Saving money doesn't always have to be a grind. Sometimes it doesn't even require huge amounts of sacrifice!" says CHOICE editorial director Mark Serrels.
"Something as simple as switching your health insurance or being more selective about your energy provider can save you hundreds – sometimes thousands – of dollars."
We've crunched the numbers from our lab tests, insurance comparisons and investigations to come up with some simple steps you can take to reduce your cost of living this year.
On this page:
- 1. Turn off appliances at the power point
- 2. Switch your health insurance provider
- 3. Look for a new car insurer
- 4. Review your home insurance
- 5. Change the way you wash your clothes
- 6. Get smart with your beverages
- 7. Change your energy provider
- 8. Spread your weekly shop
Turning off appliances at the power point could save up to $240 a year.
1. Turn off appliances at the power point
Energy costs are one of the biggest concerns for Australians. In our September 2024 Consumer Pulse survey, 79% of Australians told us they're concerned about their electricity costs.
Choosing energy-efficient appliances, turning off lights you're not using and making sure your home is well-insulated to reduce heating and cooling costs are well-known ways to manage your spending on electricity.
But what about the energy being stealthily consumed by appliances in standby mode?
"There are several appliances around your house that cost you money even when you think you've turned them off," says Denis Gallagher, CHOICE digital home product manager.
"Wireless routers and printers are particularly notorious for being the biggest energy hogs.
"Turning your appliances off at the wall when they're not in use will make sure you're not wasting unnecessary power and money."
Total possible savings: Up to $240 a year.
2. Switch your health insurance provider
If you're among the 45% of Australians with hospital cover or the 55% with extras cover, chances are you're paying more than you need to.
Our experts independently compare the policies of 46 health funds (some commercial comparison sites compare as few as eight) and time and again we see significant savings on offer if you shop around.
While the two biggest health funds – Medibank and Bupa – dominate with a combined market share of more than 50%, it's often the smaller funds where we see savings.
But while switching to a cheaper policy can save you some cash, our longstanding advice is to carefully consider whether or not you need health insurance at all, especially extras.
Our recent Consumer Pulse surveys show increasing worries about the price of private health insurance, with 67% of Australians expressing concern about this household cost in our September 2024 survey.
If you do want to hang on to your health insurance, our experts calculate that if you switch your hospital insurance to a cheaper policy there are potentially significant savings.
"The same cover with a different insurer can be hundreds of dollars cheaper," says CHOICE insurance expert Jodi Bird.
"Whether you have a Gold, Silver or Bronze policy, it's likely that you'll be able to find a cheaper deal that will give you exactly the same amount of cover."
Our experts found that:
- People with Gold policies could save up to $1870 a year by moving to a cheaper Gold policy.
- People with Silver policies could save up to $1170 a year.
- People with Bronze policies could save up to $860 a year.
Total possible savings: Up to $1870 a year.
3. Look for a new car insurer
Car insurance is another household cost causing concern for Australians. In March 2024, our Consumer Pulse survey found 79% of us were worried about the cost of car insurance, the highest figure we've seen since we first began surveying in 2015. Since then, the number has slipped slightly to 77%, but that's still an awful lot of people troubled by how much they're being asked to pay.
The good news is our expert analysis found that, in all states, average premiums for the most expensive policy are more than double the average premiums for the cheapest, so there are savings to be found.
Our experts found that, in most states, you could save significantly if you switched from the most expensive to the cheapest policy, but, of course, some cheap policies won't give you the coverage you need. The policies our CHOICE experts recommend have superior cover, and they're often cheaper than average policies.
Our experts found that when we looked at the average premium of the cheapest policies that scored high enough to be recommended by CHOICE, compared to the average of all other policies, there were savings to be had in every state.
- In ACT you could save $330
- In NSW you could save $275
- In NT you could save $286
- In Qld you could save $93
- In SA you could save $259
- In Tas you could save $158
- In Vic you could save $244
- In WA you could save $136
Total possible savings: up to $330
4. Review your home insurance
Not surprisingly, this is another of those increasingly expensive household costs causing concern for Australians. Three-quarters of those we surveyed in our September Consumer Pulse told us that they were concerned about the price of their home insurance premiums.
As with the other types of insurance we've looked at, shopping around can save you thousands of dollars.
Here are the potential savings you can make for insurance on a house with a sum insured between $600,000 and $700,000:
- ACT: $2265
- NSW: $4665
- NT: $3250
- Qld: $1870
- SA: $1010
- Tas: $1540
- Vic: $2575
- WA: $1230
Our experts suggest that increasing the excess on your home insurance can also help deliver bigger savings.
"Generally speaking, your premium goes down around 10% for every $500 increase to your excess," says CHOICE insurance expert Daniel Graham.
"Having an excess of between $1000 and $1500 seems to be where you can get the best savings. We've found there are diminishing benefits to increasing your excess much above that."
Total possible savings: Up to $4665 a year.
Lots of small changes can add up to big savings in the laundry.
5. Change the way you wash your clothes
Because we regularly test laundry detergents and washing machines in our laundry lab, we can accurately calculate how much you can save by tweaking the way you wash your clothes.
"There are lots of opportunities to make savings in the way you do your laundry," says CHOICE head of reviews and testing Matthew Steen.
"Washing full loads in cold water rather than small loads in warm, and switching to a top performing but cheaper detergent – and using less of it – will save you about $660 over the course of a year."
You could save nearly $450 a year just by switching to line drying
"We found in our testing that this approach gets clothes just as clean but costs significantly less. Cutting out unnecessary fabric softener will further cut your costs by about $77.
"And reducing your reliance on a dryer will add even more savings: we calculated you could save nearly $450 a year just by switching to line drying," he says.
Our washing machine reviews can also help you save if you're in the market for a new machine: we factor energy use into our ratings so if we've scored it high enough to be recommended, it will be efficient to run.
Total possible savings: Up to $1189 a year.
6. Get smart with your beverages
Whether you're a coffee lover or a fizzy drink fan, buying your drinks rather than making them yourself can end up costing you more than you might think.
Sure, that lunchtime can of soft drink or that mid-morning coffee might only be a few dollars, but if you're buying one most days that will quickly add up.
Making coffee at home rather than buying it from a cafe could literally save you thousands.
When we looked at the cost of making your coffee at home, including buying the machine itself, parts, maintenance and all the ingredients, we calculated it would set you back around $1284 for two cups of coffee a day for a year.
To buy the same amount of coffee from a cafe each day for a year would end up costing you around $3504.
This means you could save $2200 by making your coffee at home.
The savings from making your own soda water aren't quite as big but they're still significant.
We compared the cost of making your own sparkling water at home using a soda maker with the cost of buying the cheapest supermarket bottled sparkling water, and estimated you would save up to $420 a year by making your own.
Total possible savings: Up to $2620 a year.
7. Change your energy provider
With concerns about gas and electricity prices on the rise for many Australians, finding the cheapest retailer is something that could really help you save.
Unfortunately, many of us sign up to a plan based on a cheap initial offer, but when the deal ends we stay with the provider on the newer, more expensive plan.
Energy retailers love to lure us in on cheap rates, knowing that we'll probably stick with them even when the prices go up.
Energy retailers love to lure us in on cheap rates, knowing that we'll probably stick with them even when the prices go up
CHOICE has partnered with Bill Hero to help make it easy for people wanting a better deal on their energy bills. Bill Hero guarantees it will find annualised savings on your first bill, and that you'll save more than the price of your annual subscription. If it can't, you can cancel immediately for a full refund.
Exactly how much you'll save will depend on a lot of factors, but Bill Hero says the average first-switch savings for its customers is $350.
A Bill Hero annual subscription will cost you between $49 and $79, depending on whether you're looking for a better deal on your electricity, gas or both. So all up you'll be looking at savings of between $271 and $300.
Total approximate savings: $285.50.
8. Spread your weekly shop
While buying everything from one shop is certainly convenient, it might be costing you more at the checkout.
In September 2023 we asked the CHOICE community how much they saved by splitting their shops between multiple retailers and they estimated they could save as much as 20% to 40%.
In November 2023 we put this idea to the test and found we could save around $40 on a selected list of 19 items by choosing the best value product from one of four stores – Coles, Woolworths, Aldi and The Reject Shop. Across the year, those sorts of savings could really add up.
We found we could save around $40 on a selected list of 19 items by choosing the best value product from one of four stores
"It certainly takes more time and effort, but we recommend spreading your weekly shop across different supermarkets," says Mark.
"We've found you can save up to 20% on your groceries if you do a little more planning, and take advantage of the specials on offer. If you're lucky enough to have a Woolies, Coles and Aldi in a nearby shopping centre, it's worth being strategic in order to save a few dollars."
Exactly how much you can save will depend on your household size and the items that you buy. But according to Statista, in July 2024 Australian households spent between $157 and $179 at the supermarket per week.
By shopping around to find the cheapest option for an average 20% saving, you could be looking at up to $1861 in savings per year.
Total approximate savings: Up to $1861 a year.
We're on your side
For more than 60 years, we've been making a difference for Australian consumers. In that time, we've never taken ads or sponsorship.
Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
And you'll never be alone when something goes wrong or a business treats you unfairly.
Learn more about CHOICE membership today
Stock images: Getty, unless otherwise stated.
