Spending on the home is a major category of spending for many people – especially people that own their own home. Like many spending categories we think the keys to reducing your spending in this category are to set a budget based on what you can afford and then find ways of getting the best value for every dollar you decide you have to spend.
This is the big one for most people. Owning a house can be a money pit! Like most things though:
- set a budget based on what you can afford
- stick to it
- make sure you get the best value you can for every dollar you spend.
Here are our tips for spending less and getting value for what you spend:
- Plan your renovation carefully and get some advice from a professional or an experienced renovator if you can. Buying too much of something or the wrong thing can be expensive and wasteful
- Shop around to get the best prices. Prices do vary across the main hardware chains so it’s worth checking prices before you buy
- Negotiate, especially if you are buying a lot of something. In our experience most suppliers will discount at least a small amount of normal retail prices if you are buying larger quantities
- Look in less likely places such as on Facebook marketplace, ebay, Gumtree and Grays (formerly Grays Online) for hardware and building supplies. This can be especially effective when you aren’t in a rush and you have time to wait for things to come up for sale
- If it helps, use the Price Guarantee of places like Bunnings, though it can be notoriously difficult to claim under this policy given a lot of the items Bunnings stocks cannot be directly compared with items in other stores
- If you are working on a serious home improvement project and you are set up as an Owner / Builder you should be able to get commercial or trade pricing from suppliers like Bunnings using the Bunnings Power Pass.
This category usually includes things like cleaning supplies, cleaning agents, tea-towels, cloths, and mops. For most people, it will be difficult to separate this type of spending from general Grocery spending. But if you can separate it there are 3 obvious ways to make savings:
- Find cheaper alternatives than the big-name cleaning agents – including simple, natural alternatives
- Shop around and get things on sale
- Buy in bulk – these types of products are generally much cheaper in bulk
There is a heap of web sites available with hints and tips on cheap, simple, natural cleaners. Some examples include:
To shop around and buy these products on sale, keep an eye out for the catalogues or use a web site like Lassoo.
If you can’t separate these costs from your general Grocery spending then have a look at our tips on spending less on Groceries.
When it comes to purchasing appliances the key things are:
- price matching
Google is a great tool for researching prices. Just enter the details of what you are looking for and generally, you’ll see a range of prices. If you have a preferred or local retailer just having access to the best available price can give you a good point to start negotiating or haggling. Don’t be embarrassed to ask for the best possible price. Just asking will usually see at least a small discount offered immediately. You might also check to see if the retailer will give you a better price if you pay cash (assuming you can afford to pay cash). Retailers usually have to pay credit card providers and buy now pay later providers a fee for credit purchases so they will always have some margin to play with if you are paying cash.
Not all stores will match online prices but it’s a great starting price to negotiate. Department stores (like Myer & David Jones) will usually match prices with other physical stores and their online sites (but not stand-alone online retailers). Retailers like JB Hi-Fi and Harvey Norman are more likely to match both online and physical store prices. Unfortunately, it can seem to depend on who you speak with on the day you are looking to purchase.
Once you have found the product you want and sourced the best price, it’s also worth checking to see if you can purchase a discounted eGift Card for the store you are buying from.
It’s also worth checking online stores such as Appliances Online and if you don’t mind a scratch or a ding, Seconds World may be your thing, sometimes with an additional 30-50% off the cheapest price elsewhere. Or you could consider ebay or Grays Online for discounted, second hand, liquidation or auction goods.
Don’t forget Price Protection Insurance you might also have on your credit card. This can give you peace of mind about the price you pay.
Investment Property Expenses
In a practical sense, the Investment Property expenses we have are likely to be similar to other Home Expenses and Services & Utility expenses, with the exception of Agent Fees and Repairs & Maintenance expenses. Some of your Investment Property expenses, including things like council rates and strata fees, are not really negotiable.
So for tips on reducing spending on most Investment Property expenses refer to the other expense subcategories under Home spending or have a look at our tips for Services & Utilities.
To save money on Agent Fees:
- Do your homework and know what other deals are available in your local market
- Consider disruptive new offers from startup property management businesses
- Consider doing it yourself
Contact agents in your local area and check to see what they charge. To shortcut this process you can try and online services like LocalAgentFinder or Open Agent. Most charge a set percentage of the rent on your investment property. Typically this will be about 10%, but you’ll find agents charging as little as 4% and as much as 15%. In our experience service levels vary significantly between different agents – so price won’t be the only thing to consider when selecting an agent.
Traditional agents usually charge a percentage of rent but new disruptive property management businesses sometimes have different pricing models. Examples include Different who charge a flat $100 per month and Yabonza who charge a fraction of a traditional agent.
If you want the cheapest option and you have the time to do it you can always manage the property yourself. The tools you need to do this are all readily available. The best starting point for these is, in:
- NSW – the Department of Fair Trading website
- Victoria – Consumer Affairs Victoria
- Queensland – Qld Government Website
- South Australia – S.A. Government Website
- Tasmania – Consumer, Building & Occupational Services Website
- Western Australia – Department of Mines, Industry Regulation & Safety Website
- Northern Territory – NT Government Website
If you are using an agent to manage your investment property they will generally steer you toward using their tradespeople if repairs or maintenance are required on your property. Sometimes, if an emergency repair is required or you can’t be contacted you may have no choice but to use them. If the job is less urgent it’s probably wise to do some research and get some quotes from other tradespeople.
If you include interest and fees and charges on your investment property loans in this category it pays to review these every couple of years. It’s unlikely that your lender has you on the best rate available or the rate they are offering to new customers. To keep your lender honest you need to be willing to research the market and negotiate with them every couple of years.
Furniture & Art
For most people, Furniture & Art is not a significant or recurring category of spend. If you do spend a lot on Furniture & Art, or you need to, here are some things to consider:
- Set a budget for what you need and stick to it
- If possible, avoid “special deals” from retailers offering interest-free periods. With most of these deals, you will be punished severely if you don’t make the required payments.
- Think about what you will use most and what you’ll get the most satisfaction from. It might be worth spending a bit more on these things and looking for cheaper options for the other things. Sometimes having a few nice pieces of furniture and using “budget” alternatives for the others works better than having a house full of “average” furniture
- Consider buying second hand – you’ll save a fortune compared to the price of new things
- If you are going to buy new, and you can wait, wait until things are on sale – usually the end of the financial year in June or the post Christmas sales in January
Housekeeping & Gardening
The most obvious ways to save on Housekeeping & Gardening are:
- cancel the housekeeper or gardener and do it yourself!
- cancel the housekeeper or gardener and get the kids to do it for pocket money – you were probably going to pay them pocket money anyway
- negotiate a better rate or find a cheaper option
Seriously, if you are trying to save money and you are paying for a housekeeper/cleaner and or a gardener you could pocket that spend as savings almost immediately.
If you are trying to negotiate a better rate or to find a cheaper option ask around among friends who might be using a similar service or in local community Facebook groups. Personal recommendations, especially for housekeeping can make a big difference. Ultimately, if you need to, use something like Airtasker but in our experience, you will generally do better if you can use personal recommendations.
If you need to try and save money on storage costs you should probably challenge yourself on why you actually need storage! For some of us, it might be a legitimate requirement. For most of us, it’s because we have too much stuff! The key things to consider are:
- Can I get rid of whatever I have in storage? Do I really need it? Will I ever really use it? Am I better to sell it now, save the storage costs and buy it again in the future if I need it later?
- If I do need storage can I get a better deal? Shopping around and negotiating is the answer here
The key things that will affect your price will be:
- Location – the further outside the CBD the lower the price will be so if you don’t need regular and easy access, think about storing stuff further away
- Length of contract – the longer the contract the lower the cost per month. So think about how long you will need to store the stuff and sign up for an appropriate term
- Storage space – you’ll pay for the amount of space you rent so only take what you need
- Facilities – the better the facilities and services offered the more you’ll pay. So if you don’t really need maximum security for your stuff, don’t pay for it