Cents & sensibility Spending power
Follow John Hearne's tips to trimming €300 from your monthly budget, without feeling the pinch
IF YOU'RE serious about saving money, the first thing to do is to get a handle on what's going out each month.
There are plenty of good online resources to assist would-be budgeters — check out mabs.ie, or the National Consumer Agency's (NCA) consumer finance site itsyourmoney.ie. The NCA also has a great budget calculator with its own website — economiser.ie. Once you know where your money's going, there are loads of ways of saving. Here are 10 tips that should net you an average of €300 every month.
1 Stop paying tax
Or at least, stop paying as much as you do. Hard figures on the amount of tax relief that goes unclaimed every year are not easy to come by, although estimates from the Revenue Commissioners in 2007 suggest that the figure could be as high as half a billion euro. There are a huge range of reliefs out there. If you're a stay-at-home parent or a carer, you could be entitled to the home-carer's tax credit. You can claim back a range of dental, drug and medical expenses, as well as any cash spent on medical insurance. If you're a member of a trade union, there's a €70 tax credit available and if you rent, you can claim a credit of up to €2,000 for a single person and €4,000 for a couple. There are reliefs available for local authority charges, third-level fees, training course fees . . . the list goes on. For more information, talk to the staff at your local tax office, or check out revenue.ie.
Average monthly saving: €25
2 Don't pay interest
With interest rates ticking on, cutting back on credit is more worthwhile than ever. This is particularly true of credit-card debt, which is about the most expensive form of credit around. If, for example, you're paying 17.9pc on your credit-card balance — which you are if you have the Classic Ulster Bank MasterCard — switch instead to the One Direct Standard card, which offers 0pc on balance transfers for 10 months. On a balance of €1,000, that will save you €179 over the year.
Average monthly saving: €15
3 Reduce your mortgage payments
If you're one of the 350,000 people out there on a variable-rate mortgage, compare your rate to what the competition has on offer. The remortgage market isn't as competitive as it used to be, but EBS, KBC, Irish Nationwide and, to a lesser extent, Bank of Ireland are still refinancing mortgages. Reducing your interest rate by even 0.25pc could save you hundreds per month. If you're tied into a fixed-rate contract or you're already on the best deal out there, consider your mortgage protection policy — most people never check out the competition. The mortgage protection policy is one insurance product for which it makes sense simply to get the cheapest one going — you'll get no additional benefits for paying more.
Average monthly saving: €100
4 Switch and save
More than a quarter of electricity consumers have switched provider in the past year. The Bord Gais ‘big switch' campaign is all over the radio and TV, while Airtricity is pushing a green agenda alongside their promise of up to 13pc savings on home electricity bills. Bord Gais has calculated that, depending on your consumption, you could save anything up to €181 in the first year. Then there's the mobile. In the early days of mobile phones, the companies priced their services in such a way that you'd need a doctorate in maths to figure out who offered the best value. These days, pricing structures are as murky as ever, but some bright spark at the Communications Regulator's office has come up with an ingenious little tool for figuring out which is the best mobile phone package for you. The website is www.callcosts.ie. Click on ‘mobile calculator’, and using your most recent bills to guide you, enter your phone usage details and then switch to whichever provider it recommends. Quick and simple and you won't even have to change your number.
Average monthly saving: €32
5 Use less energy
Check out the Sustainable Energy Authority of Ireland's site (www.seai.ie) for a range of low-cost and no-cost energy saving measures you can take right away. SEAI reckons that by taking the following five measures, you can save yourself €330 per year: Lower your thermostat by one degree, never leave your appliances on standby, ensure appliances like dish washers are full before you use them, set the heating to come on 30 minutes before waking up and set it to go off 30 minutes before you go to bed.
Average monthly saving: €27
6 Turn clutter into cash
A couple of years ago as we were all drinking champagne in our guitar-shaped swimming pools, if someone had suggested a carboot sale, we would have called security to have them thrown out. Now that we're all back eating corned beef and living with our parents, car-boot sales are making a bit of a comeback. Keep an eye on local press and supermarket ads for details. And if your car boot's been repossessed, there are always auction sites such as eBay, eBid and Amazon.
Average monthly saving: €20
7 Buy second-hand
Readjust your spending behaviour and check out the same auction sites and charity shops before splashing out on new gear. Then there's freecycle.ie and jumbletown.ie. Here you can pick up all kinds of things at no cost whatsoever.
Average monthly saving: €30
8 Cut your home insurance costs
In August the NCA did a survey which compared house insurance costs for six different house types. The quotes varied enormously. For example, for a mid-terrace, three-bedroom townhouse in Dublin 6 with a rebuild cost of €350,000 and contents worth €75,000, the quotes ranged from €422 to €782.
Average monthly saving: €11
9 Cut your car insurance costs
Car insurance costs differe widely, making it even more worthwhile to spend time on the phone looking for the best quote. In the NCA's summer motor insurance survey, the dearest quote was often more than three times the cheapest.
Average monthly saving: €21
10 Haul in the grocery spend
Sign up for all of the supermarket loyalty cards, then just follow the special offers. That way, you can take advantage of the loyalty discounts, but won't be pressurised into buying things you don't really need just because there's a good deal for card holders. A recent NCA survey showed there's very little difference between the prices of branded goods in supermarkets. The weekly special offers, however, are always well worth keeping an eye on. Watch for the leaflets through the door or the ads in the local paper, then pick the supermarket that has the most to offer each week and go there.
Average monthly saving: €20
Total monthly saving: €301