Tuesday 17 September 2019

Small changes can really make a big difference to your personal finances

Top tips to save money

New Year’s resolution: As the festive season draws to a close, it’s time to start thinking about 2019. Picture: Collins
New Year’s resolution: As the festive season draws to a close, it’s time to start thinking about 2019. Picture: Collins
Sinead Ryan

Sinead Ryan

Getting your finances in order is a bit like a spring-clean. You don't want to do it, but you know you'll feel so much more in control once you have.

Now is the time for New Year resolutions, and what better ones to make than to do things a little bit differently so that 2019 isn't as financially fraught as 2018? There are some really small changes that will make a big difference.

Firstly, know you're not alone. New research from Switcher.ie reveals that an incredible 95pc of people worry about their finances, with one in four expecting to be worse off in 2019. People worry about not being able to save, meet unexpected expenses or afford a holiday.

Thankfully, with the economy almost at full employment, job loss won't be a worry for as many, but of course, shorter hours or pay cuts are a possibility for some. So, what can you do?

1 Tie in financials to New Year resolutions

Many of us choose this time to give up booze, fags or fatty food for health reasons. Why not consciously put away the money you would have spent and save on the double? A 20-a-day smoking habit adds up to around €4,380 a year. Cutting back on just three drinks a week will save €780, while avoiding processed ready-made food in favour of fresh ingredients will also cost a lot less.

2 Every household needs a rainy day fund in case of emergencies. Your credit card should not be it. Set up (it's free) a deposit account to run along your current account - download your bank's app if you haven't already - and name it "emergencies" so you're not tempted to dip into it. Drop in what you can, when you can, but do it on the day you are paid, not when you have 'spare' money, because nobody ever does.

3 Clear out your wardrobe. And your shed, attic etc. We all have items we don't need, even Christmas gifts or dodgy sale 'bargains'. You have a few options: firstly, recycle those you can for re-gifting during the year (birthdays, thank yous, teachers' presents etc, to save on new purchases). Then, consider selling on eBay or DoneDeal.ie anything which could fetch you money (jewellery, bicycles, laptops, toys and furniture are popular). You'd be astonished what people will buy, so spend a little time researching.

4 Make 2019 your year to switch providers of everything from insurance to utilities. Look at a monthly bank statement and highlight with a marker everything on direct debit. Do you know what it's for, and why you bought it? Can you do better elsewhere, or do you need it at all? There could be legacy subscriptions in there for things you no longer need or use. Cancel them.

5 Next, draw up a budget. This may sound boring, but it is enlightening. Knowing exactly what you spend is important, especially when it's so easy to 'tap' your card to pay for things. Many banks have budgeting tools in their app - AIB's is particularly good, so keep an eye on where your money is going. If you find it really difficult to budget, consider paying yourself a wage each week, in cash, and simply using that rather than your cards.

6 List your debts, in order, from the highest interest rate down. This will usually be your credit card, followed by personal loans, credit union loans, car loans and mortgage. Clearing the most expensive one is your priority. Once that's done, the freed up repayments can go on to the next. Having it all written down is invaluable to stay on track.

7 Get help. Most of us are useless when it comes to understanding financial products such as loans, and credit providers rely on it. Switcher.ie found that while 49pc would turn to their spouse to confide their money worries, 20pc admitted they would bottle it up. This is misplaced shame. Organisations like MABS exist exactly for that reason and are fantastic. Give them a call on 0761 07 2000.

Irish Independent

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