Five ways to spruce up your finances in the New Year
Save thousands by changing how you use your TV and phone, and by becoming more tech-savvy with bills, writes Louise McBride
The New Year is shaping up to be a mixed bag of financial fortunes. There are more jobs and higher wages on the cards, according to various economists. However, the New Year is also likely to be pricier for many consumers due to soaring costs in some areas, a series of price hikes in others - and the threat of more to come. So even if you're feeling more upbeat about your money, it is important to stay on top of your finances - and to do what you can to make the most of any extra money you might have. Here are five ways to spruce up your finances in the New Year.
Record your wealth
Make a list of all the valuable things which you own - such as savings, life assurance policies, properties, any money set aside for a child's education, any foreign bank accounts or overseas shares or properties, pensions, prize bonds, saving certs, bank and credit union accounts, Irish shares, works of art, and so on.
Be sure to include any savings accounts, certs or bonds which you have opened on behalf of someone else - such as a child or grandchild. In your list, specify where various assets and nest eggs are - as well as where any important financial documents (such as the deeds of your home) are kept. The list should also include the names and contact details of any people who hold information on your assets, such as your stockbroker, solicitor, financial adviser, bank, or life assurance broker. Failure to record your wealth can make it easy for you (and any surviving relatives should you pass away) to lose track of it and not to get any benefit from it. Instead, some of your money could end up in the State coffers - that is, the State's Dormant Account Fund (a fund into which the proceeds of dormant bank and other accounts, as well as certain life assurance policies, are paid).
Hold on to records such as original policy documents, savings books, bank statements, your pension contract, and any important documents or folders with a financial institution's name on it. These may be needed to prove your entitlement to something in the future. Tell a trusted relative (or your solicitor) where those records are kept - and where your list of assets is. Be sure, too, to let any bank, building society, life assurer, investment company or pension administrator know your new address if you move house - or it will have no way of contacting you in the future.
Get free TV
A digital TV subscription can cost €700 or more a year, depending on the package - so it has become a big cost for many people.
For example, Sky's basic TV package (the Original Bundle) costs €379 a year for new customers - including a monthly subscription of €29.50 and an installation fee of €25.
However, should you wish to have Sky Sports, you would pay another €345 on top of that for your first year. (Sky Sports costs new customers €25 a month for the first nine months and €40 a month thereafter). This would bring the total cost of your Sky TV to €724 for your first year. Should you have a broadband TV package (such as those offered by Virgin Media or Vodafone), you could be paying almost €1,000 a year (or more) for your broadband and TV - depending on your package. You can, however, watch TV for free if you get a Saorview and satellite TV combo box. You must pay the initial set-up and equipment costs - and these costs (which include your satellite dish) will typically come to around €300. After that, the service is free as you won't have to pay monthly TV subscriptions and could therefore save several hundred euro, or more, a year.
Combo boxes combine Saorview and satellite TV in one package with one remote. They include more than 100 free channels (including RTE, BBC, ITV, Channel 4 and a range of satellite channels). You could save on set-up costs by installing your own dish but only do so if you are confident you can do this. Some new TVs have a satellite tuner already built in and so you would not need to buy a combo box. However, you will still need to get your TV connected to your satellite dish.
Only consider a combo box if you don't want a sports or movie package - and are happy with the choice of channels on the box.
Should you have broadband at home, another way to slash the cost of your TV is to watch online. "Some people get standalone broadband - without any TV or phone," said Eoin Clarke, managing director of price comparison website switcher.ie.
You can expect to pay anything from €360 to €700 a year for standalone broadband, depending on the provider and the package. With your standalone broadband, you could watch free TV online through the likes of RTE player (for programmes shown on RTE) or 3Player (for TV3 programmes). For movies or original TV shows, you could subscribe to the likes of Netflix or Amazon Prime. It costs less than €100 a year for a subscription to either (depending on subscription type) and you can usually get a month's free trial with Netflix and Amazon Prime too.
Be sure to have a good internet connection if planning to watch TV or movies online. Netflix recommends a broadband connection that can support speeds of at least 3mbps (megabits per second) for standard definition TV, at least 5mbps for high definition TV and 25mbps for ultra high definition TV.
Furthermore, unless you have a new smart TV, you will need a gadget to connect your TV to Netflix or Amazon Prime.
Get cheaper calls
You could knock more than €309 a year off the cost of your phone calls by giving up your traditional home phone (if you still have one). You'll typically pay €309 line rental a year, as well as call charges, for a traditional home phone.
It should not cost you anything to cancel your landline - if that phone is not within a contract. Eir, for example, charges an early cease fee of up to €100 for those who cancel a landline before a contract is up - but there is no charge if you don't have a contract. Furthermore, should you have broadband at home, you can make cheap phone calls over the Internet through services such as Skype.
You should also make sure you're not paying too much for your mobile phone - and one of the best ways to do this is to be on a plan which best suits how you use that phone. "Review your mobile phone plan," said Clarke. "We often sign up to a mobile phone package - and then forget about it. Get a detailed itemised bill to find out how you're using your mobile."
In doing so, you could find that you're regularly going over your mobile data allowance (the allowance which you have to use the internet on your mobile when not connected to wifi) but hardly using another allowance which you have. "Many people are now sending messages through WhatsApp rather than traditional text messages," said Clarke. "You may be using your data allowance more than your allowance for text messages." In such cases, you could change to a plan which has a higher data allowance but a lower text message allowance, advised Clarke.
Be more tech savvy
You could save as much as €400 on your gas and electricity bills a year by getting your bills online rather than in the post - and by paying your bills by direct debit rather than by cash or cheque.
This is because some of the biggest electricity and gas discounts are available to customers who get online bills and who pay by direct debit.
Banking online and electronically will also save you money as bank charges are typically higher for over-the-counter transactions than for transactions done online or at an ATM.
With AIB, for example, it's free to set up a standing order if you do so online or over the phone - but otherwise, you'll pay €4.50. Becoming more tech savvy will also help you take advantage of the various free mobile phone apps which can help you save money.
These include WhatsApp (which allows you to send cheap messages and pictures on your mobile) and camelcamelcamel (an Amazon price tracker app which you can set up alerts on so that you are told when something you're interested in buying comes down in price).
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Make a will
Don't leave it until you retire to make your will. Should you own your own home or other property or valuable assets, make it your priority to make your will this year - particularly if you have children. Families usually face a huge amount of financial confusion and stress in the event of the untimely death of one or both parents - if a will is not in place.
The stress will be particularly acute if any surviving children are very young - or if a surviving child has a severe disability or a medical condition. For example, a child who needs a lot of financial support or medical care could find it very hard to get on in life should one or both parents pass away before making a will which ensures the child is provided for.
Furthermore, if you die without making a will, it is the law that decides who inherits your wealth and property - and this may not be how you wish your estate to be divided.
The planning and making of a will can also help to avoid a family rift being triggered when you pass away. There are also tax advantages: by planning your will and inheritance, you can limit or eliminate the tax bills faced by your loved ones when you die.