If you're feeling the squeeze, you're probably looking for as many ways to save money as you can. And there are plenty of strategies that'll reduce your bills and help you stay in the black.
But some of these strategies are actually false economy. They might appear to save you money at the time, but will end up costing you in the long run.
Cheap appliances that don't last the distance will often end up in landfill, or blow out your electricity bill, or both
Spending wisely rather than just buying the cheapest product available also has environmental benefits.
Buy a cheap but poor-performing detergent (laundry, dishwasher or dishwashing) and you'll have to re-wash everything, using more water and electricity – not to mention all the environmental impacts of the packaging and transport. Cheap appliances that don't last the distance will often end up in landfill, or blow out your electricity bill, or both.
And some money-saving measures just aren't good ideas at all. (We're looking at you buy now, pay later loans.)
Changing your spending habits is a good thing, but we want to help you do it right so you actually end up with more money in your pocket. Here are our tips on the corners not to cut.
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Groceries
With grocery costs creeping higher and higher, it's no surprise that many of us are trying to reduce what we pay at the cash register.
However, there are some purchases that might look like savings on the surface, but will end up costing you more in the long run. The key is to look beyond the price tag and the labels to make sure you're getting a good product at a good price, not just an average product at a great price.
Laundry detergents
If you're up against a mountain of laundry every week, you might be looking to cut costs with your laundry detergent – but be careful about what you buy.
Aldi can be a treasure trove of bargains and while some of its products top our tests, others deliver savings but not performance. It pays to know which is which, so check our laundry detergent reviews before you hit the shops.
For example, Aldi's Laundrite liquid detergent was the cheapest in our latest test, costing just six cents a wash. But although its price is appealing, its performance is anything but: it scored just 50% in a front loader – exactly the same as plain water.
So if you buy Laundrite liquid you might as well tip your money down the sink for all the difference it'll make to your laundry. Yikes.
But don't scrub Aldi laundry detergent off your list just yet. If you spend a tiny bit more, you'll be rewarded with excellent performance.
Aldi's Laundrite laundry powder came fifth in our test with a score of 79% and it costs just 11 cents a wash. It's up there with detergents that cost more than six times as much per wash, so it certainly delivers bang for your buck.
If you spend a tiny bit more, you'll be rewarded with excellent performance
That extra five cents a wash more than pays off. But wait, there's more: you can bring that extra cost back down even more by using less detergent than the box says.
Our experts have found that you can use half or even as little as a quarter of the recommended dose and still get a great wash – which will bring your spend back down to six cents a wash or even less.
Dishwasher detergent
It's a similar story with dishwasher detergent.
Powder detergents are much cheaper than tablets – the cheapest dishwasher powder costs 7 cents a wash while tablets cost from 14 cents a wash all the way up to $1.19 a wash.
But what you'll save in cash buying powder you'll lose in time (and money) spent re-washing your dishes. The best performing powder scores just 54% in our tests, compared with the best performing tablets which score 76%.
Now, we're not advocating for spending $1.19 per wash if you can't afford it. But it does go to show that picking up the cheapest product on the shelf isn't always the best option.
The good news? Aldi Logix Platinum 18 in 1 Dishwashing Tablets were one of the highest scorers in our test – and they only cost 18 cents a wash.
Other grocery items
Here are a few things to consider when you're trawling the supermarket aisles:
- Forget about the bright sales dockets shouting at you from the shelves – they're often more about what the supermarket wants to sell that week than what's best for your budget.
- If you're trying to save, unit pricing is your best friend. A bulk pack of paper towels might look like a bargain, but how does it compare to the smaller packs of double-length rolls? Check the price per sheet before you heft it into your trolley.
- Better yet, check our reviews before you hit the shops so you can tell whether that bargain is actually going to do the job properly. Sure, the home-brand toilet paper is cheap as chips, but is it worth it if it's rougher than sandpaper and rips at inopportune moments?
- Buying in bulk can be a fantastic way to save, but you need to be realistic about whether you're going to use it. Yes, a kilo of capsicums for $2 is a straight-up bargain, but will you use them all up before they spoil?
Appliances
Buying new appliances is not always much fun – there are far more entertaining ways to drop several hundred (or thousand) dollars in one sitting! But choosing the cheapest option available isn't always a good way to go, especially if it needs replacing sooner than you'd hoped and you have to cough up for a new one.
Look beyond the price tag to make sure you're actually getting a good deal, both upfront and over the long term.
Coffee machines
Buying a coffee machine can be a great way to cut the cost of fuelling your caffeine habit. But sometimes the cheaper options can end up costing you more than you'd expected.
Cheap capsule or pod coffee machines might seem like an affordable at-home coffee option – and they can certainly be cheaper than daily visits to a café.
But compared to buying ground coffee or coffee beans, coffee pods can be expensive, costing close to $100/kg. And some machines are only compatible with a particular brand of pods, so you'll be locked into buying that brand.
It might be worth paying a bit more to buy a manual or semi-automatic coffee machine to get your caffeine hit without taking a hit to your wallet.
Printers
If you're in the market for a new printer, make sure you know exactly how much it's going to cost you – and we don't mean how much you'll pay at the cash register. Yes, it might be cheap upfront, but how much will you end up paying in ink and toner costs?
You might find that cheaper printers have much higher running costs than you'd expect. In some cases, buying a replacement printer cartridge can cost about as much as the printer itself. We definitely don't recommend just buying a new printer each time yours runs out of ink!
If you're printing a lot, consider buying an ink tank printer – they cost more upfront but they're cheap as chips to run
If you're printing a lot, consider buying an ink tank printer – they do cost more upfront but they're cheap as chips to run.
Our expert printer reviews include detailed information about printer running costs and we even break it down into cost per page so you can see exactly how much you'll spend.
Clothes dryers
Tumble dryers can really ramp up your energy use. If you're worried about the cost (both to your pocket and the environment), you might be considering a more efficient type of dryer like a heat-pump or condenser dryer. While they cost more upfront, they use far less energy so cost much less to run than a cheaper vented dryer.
On the flipside, if you don't use your dryer very often, paying extra for a super-efficient model might be overkill – you probably won't ever recoup the higher initial outlay in energy savings. In this instance, you're probably better off buying a much cheaper vented dryer, even if you pay a few more dollars in electricity to run it.
TVs
When you're keen to go big or go home but TV prices are larger than you'd expected, you might be considering a cheaper TV. Our advice? Go smaller or go home.
Our test results often show that budget TVs don't perform well. So no matter how good a price you might be offered on a 65-inch TV, you're better off either spending that money on a good quality smaller TV, or waiting until you've saved up enough for a more expensive large TV.
Check our TV reviews before you set your heart on a big-screen TV to make sure you're getting the full picture.
Fancy appliances
If you're thinking of spending extra on a kitchen appliance with internet-enabled functionality, think again. While some of these features can sound revolutionary, you need to be realistic about how much you'll use them – no matter how much they might seem like they'll revolutionise how you cook.
If you pay more for a 'smart' appliance but never make use of its smarts, you're better off just buying the basic version and getting some new cookbooks with the money you would've spent.
Fuel
There are plenty of businesses spruiking fuel discounts or, as CHOICE fuel app expert Scott O'Keefe calls them, fuel "discounts".
While you can save 4c/litre on your fuel just from doing your weekly grocery shop, or find a 5c/litre saving at Ampol by using the MyNRMA app, Scott says these discounts aren't as good as they first appear.
"They're a complete waste of time and effort," he says.
"Invariably, if you shop around you'll find that the outlets offering the 'discount' are more than 4 or 5 cents/litre more expensive than other nearby service stations."
There are apps out there that can help you save at the bowser. Check our review of fuel apps to see which ones deliver the best price accuracy and ease of use.
Other bills
While there are plenty of clear savings to be had in the supermarket aisles, your bigger bills are a great place to rack up some better savings.
Insurance
When the bills are piling up, paying for peace of mind can feel like a luxury. Having insurance for your insurance is never a good idea, but neither is throwing caution to the wind and cancelling your insurances while hoping nothing goes wrong.
Here are the cost-saving measures you should be cautious about taking.
Home and contents insurance
It's tempting to downgrade your insurance to save money, and in some cases that's a good idea, but make sure you know you're still covered should the unexpected happen.
"It's important to balance your insurance costs against the risk of being underinsured," says CHOICE insurance expert Daniel Graham.
"There are better ways to reduce your premiums than reducing your level of cover. One surefire way is to increase your excess. Although you'll have to pay more to make a claim, it's usually a better option than reducing your sum insured.
"If you live in an area at risk of natural disasters, you might also consider a 'total replacement' policy, which does away with sum insured amounts altogether. Many insurers also offer sum insured safety nets of up to 30%, which can protect you against being underinsured."
Health insurance
We get it: private health insurance can be expensive. And it's hard to justify the expense when you don't see the benefits of your insurance week to week. You might be tempted to downgrade your hospital insurance to the cheapest basic cover policy you can find to reduce what you're paying.
Yes, switching to a basic policy will save money, but the cover it will provide is minimal, and our experts don't recommend it for health cover.
Switching to a basic policy will save money, but the cover it will provide is minimal, and our experts don't recommend it for health cover
But if you earn more than $93,000 a year (or $186,000 for couples or families), then a basic policy could save you from paying government-imposed tax, so it could be cheaper in the long run to take out cheap private health insurance. And remember you only need a hospital policy, not extras, to avoid the extra tax.
Confused? We don't blame you – health insurance is complicated! Our experts can guide you through it, starting with advice on the cheapest health cover to avoid extra tax.
Travel insurance
In these uncertain times, travel insurance is a must. But when you're already handing over a large chunk of cash for the holiday itself, you might wonder if you can get away with skimping on the travel insurance.
Our advice? Don't take out a cheap travel insurance policy unless you're sure it covers COVID and other situations that you think you might need cover for.
Banking and finance
Buy now, pay later (BNPL) loans and payday loans
If you're skint and payday is still a few days away, getting an advance on your pay is certainly an appealing option. Or if you're in need of new shoes but can't afford to buy them, paying them off in instalments might sound like a good idea.
But just be aware of the pitfalls of payday loans and BNPL loans like Afterpay, Zip and Nimble. If you don't pay on time there can be huge penalties, and any interest rates are astronomical.
If you're in trouble financially, you're better off calling the National Debt Helpline (1800 007 007) for free, independent financial counselling – it's a much better place to start than getting locked into a spiral of debt with a predatory lender.
Introductory offers or benefits
Yes, a $100 gift card is always a nice bonus, and a reduced rate as a new customer isn't to be sneezed at, but in this case you should look a gift horse in the mouth.
While introductory rates might be appealing, make sure you're 100% clear on what happens once the honeymoon phase is over – what kind of rate or plan will you be locked into? And are there penalties for switching? What are the fees like?
Go through it with a fine-toothed comb. And if it all looks legit, then go ahead and buy yourself something nice with that gift card!
Stock images: Getty, unless otherwise stated.
