Coping With Crisis Day 05 – Save Money by Reducing Expenses

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In this Coping With Crisis series instalment we provide practical tips you can utilise to save money by reducing expenses. During a crisis, particularly such a globally severe #crisistrifecta as caused by Coronavirus COVID-19, reducing expenses when our income is so severely impacted, can become critical to our survival.

Free guide – How to Reduce Your Business Expenses

Today’s video and transcript provides great practical tips, but it’s the tip of the iceberg! Therefore we’ve created a 30 page accompanying how to guide: How to Reduce Your Business Expenses. You can access this guide with 3 page checklist, with at least 74 ways to reduce your business expenses! This practical guide is yours for the asking, in exchange for signing up to our email list. We hate spammers too, and promise to contact you only a reasonable amount with great resources, and you can of course unsubscribe at any time. Grab your great guide now and save money while reducing your business expenses!

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Video Transcript – Coping With Crisis Day 05 – Save Money by Reducing Expenses

Uh oh. How am I going to pay my bills? I’m running out of money. Uh oh. Coping with Crisis. I am Jane Tweedy and I’m the Founder of FAQ Business Training and at this point in time, you may be feeling the pinch of it [lockdown and the financial impacts of the crisis]. You may be feeling it is a bit difficult to pay your bills. So today we’re going to talk about reducing expenses.

Do we still need to pay the bill?

Reducing expenses comes in multiple forms. Obviously we have bills that we were gonna pay or have to pay. Now first of all it’s about making sure these are bills we still need to pay. Do we still need to keep a membership for something if we’re not using it? Often we subscribe to things like memberships and we just don’t ever stop them. It’s why people sell membership programs. People just keep paying and paying. So look at your bills and make sure they’re actually bills you need to pay. 

Pay it, but pay the right organisation

Now this particular one is an interesting example. It is an online business registration form. Now I need to do that [renew my business names] for my businesses if I want to keep them going. Which is fine. I do not however, need to use this particular channel to pay. Now a lot of people when they started their businesses, particularly in Australia, they Google things like Australian business name registration and what came up was ads at the top of the page. So instead of paying nothing for an ABN and maybe $80 to register the business name for 3 years. They pay one of these questionable companies that take advantage of people, and pay lot more. So for instance I know people who’ve paid $60 for their free ABN. They’ve paid $298 for their 3 year ASIC registration, which should have only been ~$80. 

Seek quotes to check value

So things like this, are things that we can make sure we’re using the right channels. It’s a really good time to check and get quotes. For instance, my business insurance just came up for renewal. And at a hefty $4,000 it is one of my biggest expenses in my business. So it makes total sense for me to go out there and get some quotes and at least check it. So I did. I went to another party and just got them to do a bit of rough and dirty on my numbers as well, seeing whether that four thousand dollars was in fact fair and reasonable. Unfortunately it was. So that’s fine. But now I know to pay that $4,000 and be done with it. I’m not going to move and shop around for a few bucks, but I did need to know if I was paying $4000 when I should have only been paying $2000.

Can we put the membership on hold?

So this is a really great time to do a bit of checking and shopping around, for the things that we have to keep paying. Now a lot of the things we don’t necessarily have to keep paying. 
That membership we signed up to for some software, that we’re not even using anymore. Make sure we cut that. So look at your bank statements. Look at what’s coming through and say emm do I really need this, or do I really need this right now?
So some of those memberships can be put on hold. Somebody did this exercise last year, and they went through all of their little monthly things they signed up to. And each thing by itself was like 10 bucks here and 10 bucks there, and you thing pffft no big deal right? 10 bucks is 10 bucks. But all of the little 10 bucks’ added up to about $400 dollars. So that is getting to be a sizable amount of money every month. 

When did you last check your phone plan?

One of the early steps in checking our expenditure, is whether we actually need it. So check for the things we don’t need anymore and cut those that we do not. Look at alternative providers. A really good example of alternative provider checking is on phones.
Good old phones. Oh my gosh I still see people that are paying $100 a month. Not for their phone cost plus their plan, but just for the plan. I’m like dude, why are you paying $100 when I’m paying like $25 and I’m getting 20 gigs of data or whatever it is, and I’m getting unlimited calls and texts, and I can call New Zealand and various other countries. I’m like OMG. So think about what you actually need, and whether you’re just paying it, because you’ve been paying it, or whether you actually do need this and you want to continue it. 

Check you are getting value for money

It’s not about shopping around for the cheapest price. I don’t advocate for that. But I shop around to make sure that I’m at least getting good value from what I’m paying for. That’s another great tip for checking.

Check for government or council rebates

Another thing you can do, is to see what your state or local territory are offering you. I know in New South Wales on their Service New South Wales site, you can actually go through a checklist. Put in your details and say you know, what type of family you are. Do you drive your car? Do you use tolls, and all that type of stuff. And it will spit out and tell you all the things you may be eligible for. And there may be things on there you had no idea about. Maybe you’ve been using the M5 for tolls, and maybe you could be claiming that back. 

Did you set and forget?

So find out anything that you’re not aware of right now, that you can get deductions for. Things like your electricity. When was the last time say you moved house, like we did 5 years ago, 6 years ago you move in, you set your phone and your power and all that stuff up, your internet up. It’s kind of just set and forget. But things change over time. 

Have you checked or upgraded your internet plan recently?

The internet space, obviously things have changed markedly. We’ve moved to NBN, so obviously we did a reset then for the NBN. So that’s not so long ago. But even with that, I probably need to check that maybe next year, just to make sure I’m still on a good plan. But even saying that, within the company we’re with, Tangerine Telecom, we’ve actually upped our plan twice. And the first one we upped our plan for no cost, to a much better plan. So definitely check what’s available with your existing providers. That’s a really big one, the NBN for example, but there’s other things out there. 

Check the fine print before changing suppliers

The other huge one of course, one of the biggest expenses, we have is our power. Make sure you’re on a good deal with your power. Now there are people that check this for you. There’s companies like ACN that has people that will check it for you, but do remember they do have one thing often to sell. So you do need to sort of make sure, that you are actually getting a good deal. 
For instance, we did that kind of check and found yeah looks like maybe we could get a better, slightly better deal, and I mean slight. It was only a fraction better a deal and because of the fine print it was actually potentially a worse deal than what we already had.

Negotiate your electricity bill or discount

But what I actually did, is it sort of prompted me to go okay and I went to my energy retailer and I got my discount changed from 15% to 30%. Now that’s a big change. Big improvement in my power bills. 

Follow our Coping With Crisis series for more

So all these little things add up. So we’ve got potentially government channels that can show us reductions we can make. We can check that we’re not paying for things we don’t need to pay any more. We can make sure we’re not opting for the expensive version of something, instead of the real version and the proper version. There’s a lot of things we can do to save ourselves some money. If this has been of interest to you. I’d love you to keep checking out our tips series to help you in Coping with Crisis.

But wait, there’s more – banking and low interest rates

But wait there’s more. The more is actually one of the biggest ones, and the most important. The banking. So with your banking, have you gone and taken advantage of lower interest rates? Have you reassessed things? Now for some of you this will not be the time to contact your bank. If you’re in a bit of a tricky situation with your work and you don’t really have any work and you were employed before, it may not be time trying to go and negotiate and get a better deal. 

Negotiate a better deal with your bank

But for those you which do still have two incomes or whatever, are still working quite happily. Then now maybe the chance for you to go and actually ask for a better deal from your bank. If you’re still getting 4% interest rate on your home loan, you may find you can drop that all the way down to 2%. 

Lower your cost of debt by restructuring

Do also bear in mind, that you can do things like move money from different sources. So you might have credit card debt. Move that to a personal loan or something, and that will lower your cost of your debt. 

Lock in lower interest rates

So please take advantage of this time of low interest rates to actually get some of those locked in for longer terms as well. You can lock in a home loan rate, or a 3 year home loan rate anyway, for only a few percent. Why not lock some of that in? 
Eventually the market will recover. So it’s not going to go much lower, as you know there’s nowhere to go down from 0% in the wholesale market. There’s not really much further it could go, therefore you may as well take advantage of these lower longer term rates. For the fact that, in the last year or so you’re going to do better off. But also some of these lower term fixed rates are actually lower than the variable rates. So you’re getting instant savings anyway. But take advantage of the bank side it’s pretty good for some of you.

Coping With Crisis Series

That’s my bonus tip. Remember, I’m Jane Tweedy, I’m from FAQ Business Training, and this is our Coping with Crisis Series. Check out the rest of the series using the buttons below.

About FAQ Business Training

If this is the first time you’ve come across us you may want to know who we are! FAQ Business Training has a mission to educate and empower small business owners to learn enough to do it yourself (DIY) or outsource with confidence. We do this via face to face training in Western Sydney (currently all training is provided online), speaking at conferences, events and networking groups and will soon be offering online courses and webinars to appeal to a global (English speaking) audience. Connect with us on Facebook or LinkedIn.

 

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