Best finance advice
There are many ways you can save money and hassles when choosing a financial product, whether it's a bank account, loan, insurance policy, superannuation or an investment. Our best advice is:
You will greatly improve your chances of finding a suitable product at the right price if you take the time to shop around. Money sections of newspapers and magazines, financial and company websites, and family and friends can often explain how the products work and suggest ones worth looking at.
The costs, benefits and features of financial products vary widely. Even the cost of transaction bank accounts can depend on whether you deal mainly over the counter or over the internet. Sometimes people spend hours negotiating the price of a car, only to throw what they've saved away by blindly signing up for an overpriced insurance policy or car loan.
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Check the fine print
Like it or not, financial products involve more than just taking them out of the box and plugging them in. Loans impose terms and conditions, insurance policies cover some risks but exclude others, and investments offer returns and involve risks.
The law requires financial services businesses to tell you in writing everything you would reasonably need to know to make an informed decision. Use these documents to find out what you're really signing up for and ask questions about anything you don’t understand. Often, when you buy these products, you will be asked if you've read the information the business has given you, so make sure you have.
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Love your paperwork
After you've bought a financial product, you get at least a receipt. Keep it. Often you'll get regular statements telling you what's happened to your money. This paperwork can protect and reassure you.
See if your money has really ended up in the right place. For example, you can see how you're paying off your loans, or if your super is building up for your retirement. Keep your statements in a safe place and if anything looks odd, check it out.
Complain if you’re not satisfied
By law most financial services businesses must have proper complaints handling procedures. So use them if you're not happy. If you're still not satisfied, you may have the right to go to a free, independent complaints scheme to hear your case.
This article was created by Ella Walsh for Kidspot - New Zealand's leading parenting website. Sources include ASIC.