How much does your loyalty cost you? Keep reading to see how it may be costing you the equivalent of free cars for life.

Loyalty is defined as a strong feeling of support or allegiance.

Undoubtedly, there are people in your lives who you are loyal to and who are loyal to you. Loyalty is something most of us admire.

However, when it comes to money, your loyalty may be costing you an absolute fortune!

Mozo recently found that Australians could be paying up to $134,358 extra over their lifetime by sticking with the big 4 banks instead of switching to the best home loans, credit cards and personal loans in the market.

On top of that, they found Australians could save another $1,087 a year by shopping around for a better deal on their car insurance and a further $1,127 a year by doing likewise with their electricity plan.

We can also throw into the mix that a 1% difference in fees on your super could cost you up to a 20% difference in your retirement savings over 30 years. Most people who’ve seen a financial adviser for help with life insurance and income protection are paying a whopping 30% a year higher premiums than necessary to fund the commissions paid to their adviser. If they’re also paying percentage-based fees, the cost of loyalty just keeps going up and up and up!

It begs the question, are you being taken for a ride by the businesses you fork out money to day in, day out?

Some interesting data from digital mortgage broking platform Uno found that disloyal loan customers get a better deal on average when compared to their loyal counterparts.

Disloyal owner occupier customers who shopped around were able to secure an average rate of 4.3%, with loyal customers paying an average of 4.5%.

More research by Mozo has found that borrowers could save over $1,200 a year with just ONE conversation. They found 7 in 10 home borrowers who have haggled with their lender for a better home loan interest rate have received one and they are able to knock an average of 0.5% off their current home loan rate. However, two-thirds of existing mortgage holders have not haggled with their lender in the past two years, indicating a large chunk of borrows could be getting some serious savings by simply asking!

Being loyal is likely costing you a fortune. We’re talking hundreds of thousands of dollars over your lifetime. Think about it in real terms… the savings you could make could easily cover the costs of the cars you’ll buy over the course of the rest of your life.

I’m going to be blunt for a moment… I hear people complaining all the time, but it’s rare that many of them actually take action. They know they should be doing something but tell themselves it’s too hard to bother doing anything about it or they’ll get around to it later.

I’ve been talking about the cost of loyalty, but the other way to think about this is to call it a ‘lazy tax’. How much ‘lazy tax’ are you willing to pay in your lifetime? If the answer is hundreds of thousands of dollars, then carry on as you were. If it’s less than that and you think you could find something a whole lot better to do with all that money, then let’s have a conversation and look at your options.

I’d go as far as to say that it’s more likely you’ve put more thought into getting a better deal on toilet paper than your mortgage and your super. If that’s true, it’s time to take action!

I’ll give you a bit of extra incentive… if I can’t show you that you’re paying too much in fees on your superannuation, I’ll shout you a free pizza! It’s more likely I’ll be showing you how to get free cars!

Cheers,

Daniel