Banks make money from our complacency. Photo / Getty Images
Banks make money from our complacency. Photo / Getty Images
Opinion by Diana Clement
Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.
Being lazy costs us a lot of money. Whether it’s losing interest in zero, or low-interest bank accounts, or paying over the odds for utilities, groceries and big-ticket items, New Zealanders throw away hundreds and sometimes thousands of dollars a year for want of making a small effort.
In2021, comparison site Finder did a survey and found out that nine in 10 Kiwis are paying lazy tax on financial products. And home loan company Squirrel worked out that lazy tax on term deposits costs some people in excess of $1000 a year.
Banks make money from our complacency. All the small deposits in zero-interest accounts add up to a lot of lost income for customers. Even people with no savings, who live from payday to payday, are paying lazy tax.
Leaving chunks of cash in zero-interest accounts is a good way to be parted with lazy tax. The average six-month term deposit is around 5.88 per cent currently, according to Canstar, which has a term deposit comparison tool.
Instant access accounts can offer good rates currently. At the time of writing, Heartland Bank was paying 4.60 per cent on all balances over $1 in an online call account, Kiwibank was paying 4.50 per cent and Rabobank 4.25 per cent.
With a few restrictions, it’s possible to get more. BNZ’s RapidSaver was paying 4.55 per cent, but you can only make one withdrawal per month.
Instant access accounts can offer good rates currently.
Groceries
There is money to be saved on groceries for most people. Lazy shopping comes in many forms. One is the person who buys everyday groceries at the dairy.
Then there’s the one that I can be guilty of: popping to the supermarket several times a week. It’s a recipe for buying items you don’t need.
Not taking advantage of specials is lazy shopping. If you buy the same items regularly, and they keep, then stock up when they’re on special.
Not substituting is another no-no. If mince is $18.99kg this week, but chicken breast is on special at $11.99kg, then have chicken that week and vice versa the next week when the specials are reversed.
For some people it would make sense to shop at a supermarket further from home, even with petrol priced in.
Cherry-picking supermarkets, fruit and veg, and butcher shops helps too. For example, I make a list of spices and dried foods that I pick up from the Indian supermarket when passing.
Likewise buying your veggies in bulk from cheaper stores avoids paying lazy tax to the supermarket. Think laterally when it comes to your supermarket spending. Could you, for example, save money by buying your favourite wine in a case of 12? But don’t do it if it makes you consume more.
Shopping
Lazy tax on big-ticket items is costly. Shopping around can save hundreds of dollars. Try using the comparison sites PriceMe or PriceSpy.
Check on Trade Me, brand new, as new, or good used items. I’m hesitant to buy big-ticket items via Facebook Marketplace because there are too many scams reported.
Utilities companies are guilty of something banks do as well. That’s offering good deals, then quietly “grandfathering” them after a year.
That’s when they quietly change the rates for existing customers and give new customers sharper rates. They bank on existing customers failing to notice and paying lazy tax. It’s good for the profits.
To avoid being the person paying that lazy tax, review your accounts at least once a year to ensure you’re getting a good deal. Sometimes a quick phone call to your existing supplier is all it takes to be given a better deal.
Unnecessary subscriptions
Another example of lazy tax is payments for unused subscriptions. I’m not talking about Netflix that you watch regularly. It’s the multiple subscriptions that we keep paying because we’re too lazy to cancel. It’s often for software, games, or cloud storage.
There are many other types of lazy tax. Uber Eats is one. Baked beans, or an egg on toast is a nutritious meal if you’re too lazy to cook one night. Petrol is another. Shopping around for lower-priced petrol is easy with apps such as Gaspy.
