How to make it easier to save for the things that matter in 2019
Tackling the resolution list in January can sometimes seem unachievable mid-month - but here are ten (somewhat) simple tips to make sure you've more cash in your pocket come summertime.
Sit down with a pen and paper, or excel on the laptop, and put down your income and your outgoings, to show how much you have coming in and going out.
Have access to your on-line banking or bank statements to help remember all your out goings; the regular weekly and monthly bills for transport, loans, shopping and services, as well as the once-off costs for Christmas, annual holidays and back-to-school. Things like home repairs, car repairs and medical expenses should also be provided for.
This will highlight places you are overspending in, and is crucial to get to grips with.
Be ruthless about cancelling direct debits you no longer need, but be very careful about cutting back on important financial products like insurances or pension contributions.
2. Get Debt Free
Use all your spare cash and any windfall amounts to get rid of personal loans, credit cards, car loans, credit union loans etc.
It is generally a good idea to pay off the smallest loan first, then the next smallest, as motivation to keep going. But do check the percentage interest being levied on the different debts and tackle the highest ones first, such as credit cards or store cards.
3. Ditch the Cards
Credit and debit cards make it too easy to spend money which isn’t always easy to earn.
Cash is KING! Checking what’s in your wallet and handing over cash puts your spending in clear perspective.
If you must use a debit card, check your online balance every couple of days. All the handy instore 'tapping' makes it difficult to track how much money you’re spending.
Only use a credit card if you’re confident you can clear the balance each month. Credit card credit is horribly expensive.
Try it for January even; hide away your cards or chop them up, and you will be surprised at how taking away the convenience of spending is the greatest savings trick.
4. Stop paying money for stupid things
All the small amounts add up. Not buying bottled water and café coffee can save over €1,000 per year. Your daily parking can be €5 cheaper if you’re prepared to walk an extra 5 minutes to the station; you don’t need a taxi for a journey that’s a ten minute walk; and reading the newspaper on your phone saves €3 a day.
5. Stop Smoking
Yes it’s incredibly difficult, but savings of €2,000 or more every year on cigarettes must add to the motivation of the major health benefits for you and your family.
A regular pub or restaurant habit can be expensive too; try cutting back on one night a week for a more comfy less costly at-home drinks and dinner. Get the gang to take turns hosting at-home nights out, so you don’t miss any of the craic.
6. Don’t Change the Car
Unless it’s on its last legs, or wheels, consider if you really need a new car. Changing the car in January can be a very impulsive thing but, unless you’ve got cash, do not take out a new loan or an even bigger loan.
7. Fitter Finances
By all means take up exercise, but don’t start a gym membership, unless you are 100pc committed. Try a few pay-as-you-go sessions. Walking, jogging or an at-home exercise routine is free, and there’s no opening hours. Do it with family or a friend for added motivation.
Losing weight can be as easy as following an online nutrition plan and walking more.
If you’re taking up cycling or golf, you don’t need the latest hi-spec equipment. Buying used sports gear online makes sense for novices.
Master this for the months of January and February, and then invest in a gym membership if you like; it will be easier to find a treadmill in March too.
8. Claim Tax Back
Get onto revenue.ie (my account) and claim your tax back on medical/dental expenses from last year. From A&E department charges to fertility treatment, there’s a raft of allowable Med 1 expenses you can claim for, and you can go back four years.
Check out other allowances like the home renovation incentive and the Cycle to Work scheme, while you’re at it.
9. An Acorn Account
If you don’t have a second bank account, get one. This should be used weekly to lodge money from your main working account into it. This Acorn Account is to squirrel savings away for big ticket items or rainy day emergencies. Challenge yourself to make savings and build your Acorn Account by setting up a regular standing order.
The cup of coffee or vitamin drink at €2.50 a day, going to work, is €50 a month saved. Switching the gym membership for a daily jog is another €50 per month. And that’s before you consider loyalty cards and coupon savings, and switch to generic groceries and a packed lunch.
10. Switch providers
I’m a big believer in getting the best of value out of banks, utility providers, and financial products, and there are major savings to be made. Give yourself an hour with a laptop, bank statements, and all your bills and statements. It’s usually better to do this, Monday to Friday, 9-5, if possible, so you can speak to existing providers and new providers if needed.
Gas, electricity, and refuse collection are good places to start, moving on to your mobile phone, home phone, broadband, and TV provider, which can usually be cost-effectively bundled. Look at insurances like your car, travel, home and health insurance costs, which again can be bundled for savings, and talk to a broker about better deals. Check the price comparison websites too, although be aware that many sites only compare a handful of the top providers, not them all.
Whatever your household income, spending money you don’t actually need to is a pointless waste. And, like all good habits, if you aim to watch your spending for January and February, then, by spring time, it’s an automatic response to always question costs.
Paul Merriman is a Certified Financial Planner, Founder of Askpaul.ie and CEO of Pax Asset Management and ClearChoice, compliance support for financial brokers.