Wendy GraceWendy Grace offers tips on how to save money and keep household bills under control
Like so many people, myself and my husband are in a situation where we are trying to manage after years of austerity, pay cuts and dramatic changes in the economy. Here are some simple money saving tips that have helped us and I hope they will help put some money back into your pockets.
Household budget
It is amazing the number of people that have never done a household budget. This is the starting point to any savings you can make. I also recommend a budget app which helps you track your spending and highlights areas where you could save.
Once you have done your budget you can see the areas that can be improved and what savings you will have left at the end of the month. Then, only keep in your account the money that you need to pay your essential bills and your day-to-day expenditure. So, let’s say, your monthly bills and the cost of petrol, groceries and a few nights out comes to €1,900 each month and your ‘take home pay’ is €2,300. Then each month simply keep €1,900 in your account and at the start of the month transfer the €400 surplus into another savings account. My experience is, if money is in your current account you will just spend it! Budgeting is certainly not easy and it does involve sacrifice and discipline.
Plan ahead
Have you ever been in the situation where your management fees or a car insurance bill lands on your doorstep and it always seems to be at a time where you simply don’t have the money to pay for it?
There is a simple solution to avoiding this headache and it goes back to your household budget.
Figure out what the amount of all your irregular non-monthly bills are annually, include everything from insurance to property tax. If, for example, the overall figure comes to €2,000 annually then you will need to save €167 each month into a separate ‘Irregular Bills’ account. In this way, when those bills do arrive you will always have the money to pay for them.
You should also keep different savings accounts for other items. For example, I have an account into which I put a small amount of money each month solely for charitable purposes. It is great when a friend is fundraising that I can always say yes and be able to donate.
Shop around
When you sign up with a new provider for services such as electricity, internet or health insurance make sure to note on your calendar when your contract expires.
Before the expiry date shop around for a better offer; most providers offer strong incentives for new customers which can lead to hundreds of euro worth of savings. Sometimes people avoid changing providers because they think it involves too much hassle. Nowadays it couldn’t be easier, the new provider takes on the majority of the work this entails.
All you have to do is fill in some paperwork (often online) and the rest is easy. Websites like
www.uswitch.ie and www.bonkers.ie are excellent price comparison websites – they do all the hard work of figuring out the best savings for you.
We now have recently seen a mortgage ‘price war’ where you can save tens of thousands over the lifetime of your mortgage by switching provider. Banks such as Permanent TSB and KBC are even offering money to cover the legal costs of switching. Shopping around, even on your day-to-day expenses, is very important.
Keep an eye out each week for great offers on fruit and vegetables; competition/‘pricewars’ amongst the various supermarket companies is intense and shopping where the best value is can make an enormous difference to your spending.
Use websites like www.pumps.ie to help you find the best deal for fuel nearest where you live.
Of course, in addition to structure, one also needs discipline, especially at the start of a budgeting process. As time passes the budgeting process becomes embedded, your personal budgeting will become second nature and your family will reap the financial rewards in the long term.
Taxation
Make sure that you are claiming all the tax relief benefits due to you. Keep receipts for all your medical expenses and fill out your Med 1 form each year. Again, this just involves keeping a good filing system.
Ensure you do a balancing statement each year; it takes a matter of minutes online through the Revenue Commissioners PAYE online system. This year, I received a nice refund into my account, within five days of filing my return.
Economical cars
If money is tight, it might be time to consider changing or downsizing your car. Make sure you take all things into account, from fuel efficiency to motor tax.
I was lucky enough to have had my own car since I was 17. When I got married, 11 years later, myself and my husband decided that we would have just one car – you would imagine that this decision would be extremely difficult for me. In fact, all it took was some adjustment and it literally saves us thousands every year in car tax, servicing, NCT and fuel etc., not to mention the depreciation of thousands of euro on any car that you have.
Depending on your circumstances, it might be possible to survive with one car. If this idea gives you ‘the jitters’, try it for three weeks and see how you get on. The very rare time it causes an inconvenience I remind myself of all the savings we are making and it is worth it.
Track spending
There are lots of free apps that track your spending. Sometimes we don’t even realise how money ‘burns a hole’ in our pockets. For example, you might not realise that a cup of gourmet coffee every day is costing you €20 a week, which is over €1,000 a year!
Perhaps you eat lunch out every day, spending €5 or €6 each day – this is costing you over €1,300 a year. Maybe you are just wasting money on buying expensive bottled water when you can fill your own water bottle each day.
Bringing a packed lunch can not only save you money but it can also be much healthier as you can plan what you eat rather than getting processed meals.
Perhaps you go out once a week for a romantic meal, yet still find yourself ‘in the red’ at the end of the month. Instead, why not go out twice per month and keep your ‘date night’ as a romantic night in for two. I recently had the ‘Dine in for Two’ option from Tesco which was only €10 and it was delicious.
Marks & Spencer do a more upmarket version of this for special occasions, such as Mother’s Day, that is under €30 which includes a bottle of wine.
I have found that if I have money in my wallet it just gets spent. Plan your days to know what cash you will need and leave the surplus at home.
Sometimes when it comes to budgeting we need to ask ourselves the hard question of need versus want. When you are buying something new, ask yourself if you really need it, or is there a more economical version?
Often it can involve lots of small sacrifices amounting to big savings and overtime that discipline and making many little changes will have a big impact on your personal finances.