Ever open up your banking app and wonder where your money's gone?
Here are four 'taxes' you might not know you're paying - and how to stop.
Jump to:
- The loyalty tax (and how to break up with it)
- The procrastination tax (and how to get ahead of it)
- The lazy tax (and how to outsmart it)
- The singles tax (and how to make it work for you)
The loyalty tax
What is the loyalty tax?
The loyalty tax is what you pay when you stick with your existing goods or service providers even when there are cheaper options available.
This often happens when a business gives a new customer a better deal than an existing one.
Maybe a new app offers a sign-up bonus, but you stick with your existing account, so you miss a few dollars.
Or maybe you stick with your home loan or super fund when there are better options available, so you miss thousands of dollars.
In 2023, the average Aussie paid a $331 loyalty tax just on utilities, including electricity, mobile, and broadband, according to Finder research.
Five ways to take on the loyalty tax
- If you're paying a mortgage, consider refinancing or using a broker to see if there's a different rate available.
- Shop around: use tools such as EnergyMadeEasy.gov.au or if you're in NSW, greenslips.nsw.gov.au to make sure you're getting the best deal.
- Call your providers and ask for a better rate. If you don't want to speak on the phone, you can often reach someone on Live Chat.
- If you're struggling to get a promotion or a raise at your current job and know you deserve one, don't be scared to apply for better opportunities elsewhere.
- Don't wait for a downturn to rethink your spending patterns. M&C Saatchi found that over the past few years, during the cost-of-living crisis, Australians have increasingly sought cheaper products or better deals to make their money stretch further. We think this can be a good habit for the boom times, too.
The procrastination tax
What is the procrastination tax?
If you're known for leaving things to the last minute, odds are good you've paid your fair share of procrastination taxes. Think overdue and late fees, and last-minute surcharges.
Five ways to take on the procrastination tax
- Automation is your friend. Setting up regular schedules for bills and other payments can ensure they get paid, and stop you having to rely on memory or willpower.
- Have a bias toward action. This means you decide to take an action, and make a move or take a first step now, rather than getting stuck in the inactivity zone.
- Set recurring reminders before the due date. Think of them like the snooze button; they'll buy you some time but annoy you into taking action.
- Use the two minute rule. If you can pay a bill or cancel a subscription within two minutes, then do it.
- Use habit stacking by pairing something you don't want to do with something fun. For example, tackle your insurance research while you binge-watch TV. Or work on your budget while you're at a cafe.
The lazy tax
This is important: what counts as 'lazy' for one person is simply unachievable for another. Everyone has different abilities and circumstances.
But otherwise, the lazy tax is the cost of convenience - or the price you pay for goods or services that take advantage of your unwillingness to do simple tasks you're otherwise able to do.
Five ways to take on the lazy tax
- Figure out where you're most vulnerable. If it's meal delivery, load up your freezer with food and your cupboard with snacks. If it's buying too many cups of coffee or energy drinks, look for bulk deals or loyalty cards.
- Keep your financial info where you can see it. Having a single source of truth for how much your regular bills are costing - and how long you've been paying them for - could help you notice and compare better deals.
- Set a recurring reminder to review your spending. It can help you spot duplicate transactions, emerging trends, and unexpected budget blow outs.
- Set up lines in your budget for problem areas. Giving yourself $50 per week for meal delivery means you don't have to make up the shortfall from other places. Then it stops being something you might beat yourself up for and starts being a treat you look forward to.
- Regularly check your calendar. Knowing in advance what you have on can help you give yourself enough time to arrive somewhere without resorting to Uber or Toll Roads. You can find a thoughtful gift for a friend instead of an expensive last-minute one. You can look ahead for flight deals instead of forking out for last-minute travel.
The singles tax
What is the singles tax?
Aussie singles pay an estimated $776 extra per month compared to their coupled counterparts, according to ABS research. That's almost an extra $10,000 per year.
Not having a second person to split bills with and go halves on an all-expenses holiday can make a definite impact on your bottom line.
Independence is priceless and hard won. It's also a little bit more spendy than finding your hopefully-happily-ever-after.
Five ways to take on the singles tax
- Find friends or family to share the big expenses - think cars, power tools, camping gear, and even kitchen gadgets or a Costco membership. You could even add your friends to online family accounts or streaming subscriptions.
- Lean into last minute flexibility - take advantage of last minute travel deals without having to check in on a shared budget or partner's plans.
- Find a two-for-one or minimum spend delivery deal? Buy some for present you, and some for future you.
- Use your spending autonomy to be as frugal as you want, and smash your money goals. Skip the couple's expenses like in-law presents and spending compromises. Your money = your domain.
- Don't compare yourself to your couple friends and spend money trying to keep up. While they might have a greater combined income, they may be paying extra expenses you can't see, too.
A few dollars here or there might feel insignificant at the time. But if you invested that money purposely instead of paying it without noticing, you might find yourself in a seriously different financial position before you know it.
And when you take back control of your spending, you can redirect your money toward living your life and building your wealth with purpose.
