Many Australians are missing out on thousands of dollars every year without realising – but there’s a quick and easy solution.
The term ‘lazy tax’ refers to when someone is paying more than they should be for a service such as insurances, home loan rates, mobile phone fees and mortgage lender costs.
But by changing providers or cancelling subscriptions, Aussies can inject cash back into their wallets in as little as 60 minutes.
Sydney finance guru Queenie Tan swears by this tactic and has used it herself to save money.
‘Personally I go through all my providers every year to make sure they’re competitive, and if not, I call them up and negotiate a discount,’ Queenie told FEMAIL.
Sydney finance guru Queenie Tan (pictured) described lazy tax as ‘the price you pay for not reviewing your subscriptions to make sure they’re still competitive’
Queenie goes through all her providers every year to ensure she and her fiance Pablo Bizzini are getting the best deal (right)
‘Most of the time, they are happy to provide a discount, but sometimes I may have to switch. But it’s honestly worth it.
‘The lazy tax is the price you pay for not reviewing your subscriptions to make sure they’re still competitive. It’s a tax I’m sure we’ve all paid from time to time, but it’s good to be reminded of it so that we can be on top of it.’
The 27-year-old said insurances and electricity costs tend to be the biggest contributors followed by mortgage interest rates, phone and internet bills.
‘Not having a competitive home loan can cost a lot more in interest. For example, let’s say you have a $500,000 mortgage with a six per cent interest rate, just a one per cent increase in the interest rate could cost an extra $312 per month in interest. So it really sneaks up on you,’ Queenie said.
So far this year Queenie has saved $600 on her car insurance by changing to a different provider.
‘I switched my electricity to a new provider too and changed it to time of use (so there are different rates for off-peak and on-peak) and because I have an EV, I saved around $100 per month on my electricity bill,’ she said.
‘I also switched my internet provided earlier this year and saved another $10 per month.’
With the extra money saved Queenie likes to split it equally by spending half and investing the rest.
‘I love investing because it’s a great way to build wealth and enables me to give us more options on what we can do with that money in the future,’ she added.
Insurances and electricity costs tend to be the biggest contributors followed by mortgage interest rates, high interest savings account, phone and internet bills
On Reddit several Aussies admitted they wish they knew about lazy tax sooner (stock image)
Several Aussies admitted they wish they knew about lazy tax sooner.
One person said they’ve managed to save $3,200 a year simply by switching providers or asking for discounts.
‘Just looked at all this after paying the lazy tax for way too long. Two cars, home and contents, electricity and internet and I’m up about $3.2k a year by finding better options,’ the Redditor wrote.
‘Also had 0.64 per cent taken off the home interest rate with a quick call. All done with a little bit of lunch time comparing and a few phone calls.’
Another Redditor estimates he saves roughly $1020 every year by switching plans, cancelling subscriptions and using rewards systems including Woolworths Rewards and Shopback.
A third added how it’s often easier to switch to a higher paying job than wait for a promotion.
‘Another place I consider lazy tax is your job. Some people just put off changing for a higher paying employer because they just get comfortable and the idea of updating resume and going to interviews is a hassle, but you often can do better if you get off your butt and put yourself out there,’ they wrote.
‘A lot of people will read this and go yeah, good idea, then forget about it again.’