CONSUMER RESOLUTIONS:You have made it through the festive season in one piece but, for many of us, the financial hangover is just starting to kick in. Now is a good time to examine the finances to see if there are ways to save yourself a few bob
1 KEEP A SPENDING DIARY
It is tiresome, but the first – and possibly most important – step you can take towards financial wellbeing is to work out exactly where your money is going every month.
With that in mind, we suggest that starting tomorrow – today’s a bank holiday so we’ll cut you some slack – you keep a spending diary. Not forever, mind you, just for the rest of this month. It will be hard and you might struggle to find a pen and paper but it is still worth trying to keep a log.
If you can’t write everything down immediately, get into the habit of asking for receipts for every purchase – even that packet of chewing gum – and at the end of each day, add them up. By the end of a month, you’ll be able to see exactly where all your money is going. And, hopefully, be able to plug some of the gaps.
2 KEEP IT CLEAR
If you’ve run up any kind of balance on your credit card, don’t panic but don’t just pay off the minimum monthly amount requested.
If you owe €10,000 and pay off the minimum each month, it will take over 20 years to clear the card and cost almost €9,000 in interest.
Next, switch to a zero-interest option. Both the EBS and MBNA are currently offering 0 per cent interest on balance transfers for the first 10 months. MBNA limits this largesse to its Platinum card and some cards sponsored by other companies. EBS also offers a 0 per cent rate on balance transfers for 10 months, while Permanent TSB and Tesco give 0 per cent for six months. If you were to move an outstanding balance of €10,000 from a card with an APR of 16.5 per cent to a zero interest option, you would save almost €850 in interest payments in the first six months alone.
3 THE BIG SWITCH
The easiest way to save a bundle of money is through shopping around for insurance, phone deals and groceries.
Young drivers can save over €2,200 by switching insurers when renewing cover. While others will probably not save as much – unless you fall into a specific category – you should still be able to knock some money off your insurance by shopping around. Make sure to play one mobile phone provider against another.
Then turn your back on grocery shop loyalty and follow the money – or the discounts. According to the National Consumer Agency (NCA), 75 per cent of consumers who switched a provider of some kind last year, did so because they found better value elsewhere – make sure you are one of them this year.
4 FIND A HEALTHIER BALANCE
You could knock nearly €600 off the cost of your family’s health insurance with a single phone call tomorrow.
A couple of weeks ago, Quinn Healthcare’s HealthManager policy, covering two adults and two children, cost €3,220 a year. The company’s CompanyCare Premium plan, aimed primarily at businesses but open to everyone, offers the same cover and costs €2,640, or €580 less. All the health insurance providers have corporate plans that are cheaper than private ones but they make them difficult to find.
The Health Insurance Authority (HIA) has details of all of the products available, including those normally only marketed to large group schemes on its website (hia.ie), but the easiest thing you can do is contact your insurer directly and ask for an equivalent company plan. It is possible there is no such equivalent, in which case the savings will not be possible.
5 MAKE LIKE SANTA!
There is a reason why the fat fella in the red suit makes lists. It’s so he doesn’t lose the run of himself and spend like crazy in the run up to Christmas.
Forget Christmas, the damage is done now, but start making lists when you go shopping. It is the most effective way of thwarting our conniving supermarkets who shell out a lot of money to get us to part with our cash. You may think you’re far too clever to be sucked in by all the soothing background music, the judiciously placed “offers” and the smell of baking that wafts through the aisles but your bill at the checkout might beg to differ.
Plan what you are going to eat on a weekly basis – covering all meals and incidentals – then make a list. You could save as much as 30 per cent – the amount of food the average household throws out each year – by being just a bit smarter. Stick rigidly to the list and never shop hungry.
Buy own-brand products and look up and down the shelves – supermarkets put the premium products at eye level because they know we’re suckers.
6 JUST GIVE IT UP
Obviously if you’re a smoker, you should stop. Smoke 20 a day between now and the end of the year and you will spend over €3,000 of your net income on something that you know full well is doing you serious harm.
7 WILL GYM FIX IT?
While short-term gym membership is more expensive than signing a year-long contract, it does have the advantage of allowing you to accurately assess your commitment before you shell out loads of cash.
If you are joining a new gym, haggle. During the boom years, joining fees were commonplace and gyms could name their price. Most gyms have now scrapped sign-up fees and are willing to compromise on price to get you through the door. Local authority gyms are cheaper and allow a pay-as-you-go option. Some may not be as flash as privately-run gyms but they have the same basic equipment.
Consider cancelling any gym membership you may have. If you are super-diligent and visit three or more times a week, every week, then the €70 it’s costing you every month is money well spent. If, however, you go once a week or less, it is a total waste of money, so cancel it and go for a run or brisk walk instead. It might be a bit colder – and admittedly wetter – but it won’t cost you anything.
8 TURN YOUR TAT INTO CASH
One person’s junk is another’s treasure or at least something they might be prepared to spend a few bob on. The web has made it easy to sell your useless unwanted presents. Clothes, CDs, DVDs, kitchen equipment and almost anything else you can think of, can be converted into cash and it is a whole lot easier to do than you may think.
It will also free your house of much of its clutter and allow you to live like some sort of feng shui master/mistress in 2011.
9 TRAVEL FOR LESS
Car-pooling can knock hundreds of euro off your annual fuel bill. There are websites designed to help people make the right connections and two that are worth checking are tripmi.ie, and swiftcommute.ie.
The TaxSaver commuter ticket scheme can cut as much as 47 per cent off your public transport bills. Employers provide employees with bus and rail commuter tickets as part of their salary, in lieu of an annual cash bonus, or as a benefit-in-kind so the latter can benefit from reduced tax and PRSI payments.
Better still is the bicycle-to-work scheme which covers bicycles and accessories up to a maximum of €1,000. Your employer buys the bike and you pay for it, tax-free, over 12 months, which effectively knocks around 40 per cent off the price. Details from bikescheme.ie. If you live in the capital, sign up to the Dublin Bikes (dublinbikes.ie) scheme too. It’s a lot cheaper than cabs.
10 THE BIG SWITCH II
By switching from the ESB to Bord Gáis Energy or Airtricity you can knock up to 10 per cent off your annual electricity bill. And switching is genuinely easy.
Energy-efficient light bulbs are getting better all the time – no, really – and can knock as much as 80 per cent off your lighting bill. Washing your clothes at 40 degrees instead of 60 uses 40 per cent less power, and turning your thermostat down by just a single degree will knock as much as €120 off your annual heating bill.
Insulating your attic will cut your heating bill by 25 per cent, while lagging your hot water tank will save the average house €2.50 a week – if you live for the next 50 years lagging today will save you €6,500.
