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Dan White: Eight ways you can economise as the interest hike bites

The long-dreaded interest rate increases are finally upon us. The first increase by 0.25pc to 1.25pc might seem relatively minor but it's still €40 per month on to the cost of a €300,000 mortgage.

And there's more, lots more, to come. Most analysts expect the ECB to push up interest rates by a total of at least 1.5pc over the next 18 months. That's another €240 per month on to the cost of a €300,000 mortgage and over €2bn hoovered out of the Irish economy.

Faced with yet another financial hammer blow we are all going to have to cut back even further on our spending. Here are eight tips for making your euro go further:

1 Do you really need that second car? With money tight and fuel prices having now reached extortionate levels do you really need that second motor sitting on the driveway? With the AA estimating the average cost of running even a low-emission car, at over €530 per month, cutting back to one-car family status can yield big savings

2 Change your electricity and gas suppliers: At long last competition has come to the Irish retail electricity and gas markets. With bills set to rocket in the autumn it is vital that customers be prepared to switch supplier to get the best deal. You can save up to €200 per year.

3 Are you getting the best value landline, mobile phone, broadband and cable TV deals? For those who are prepared to do their homework there is now much better value to be had. Consumers can easily knock €10 a month each off landline, mobile phone, broadband and cable TV bills if they are willing to switch provider.

4 Can you really afford those sports packages? For couch potatoes following their favourite sports on TV is now seriously expensive. Someone with Sky Sports, Setanta and ESPN is now shelling out up to €58 per month. Great channels but what can you afford?

5 Beat the supermarkets at their own game: During the boom years Irish shoppers were easy meat for the supermarkets. We insisted on buying only brands and on paying full price. Not anymore. Today's canny shopper should always compare the branded product with the supermarket's own-label equivalent and when the supermarkets have special offers such as buy one-get one free, you should be ready to pounce.

6 Cut up the plastic: Now that money is tight it's well past time that we dispensed with the services of our flexible "friends". With credit card interest rates running as high as 20pc on cash withdrawals, unpaid credit card balances should be replaced by cheaper forms of credit such as credit union loans pronto.

7 Have you been with your existing car or home insurance more than three years? If you have then the odds are that you are paying over the odds for your cover. No more. The next time your policies come up for renewal get online and check out what the competition is offering. A recent survey by the National Consumer Agency found that male drivers in their 30s could save up to €170 per year while female drivers could save over €120 per year on motor insurance. On home insurance the potential savings were even greater at up to €330.

8 Draw up a household budget and stick to it. Even now, after all that has happened it is amazing the number of households who have yet to draw up a budget, which works out exactly what is coming in every week or month and then sets strict targets on how much to spend. That's asking to be ripped off. Until you draw up a realistic household budget you will always be chasing your financial tail.


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