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Once you're prepared you can avoid last year's mistakes and make 2015 financially fit

Everyone starts off a new year with bills; it's perfectly normal. However, there are ways to make sure that 2015 is managed better financially than 2014 and with a few simple budgeting tips you can avoid that heart-sinking feeling when those envelopes start arriving through the letterbox in January.

Budgeting isn't as much about sums as it is a state of mind. If it becomes a habit, then (whisper it) it can even become enjoyable! I'm looking at different headings today to help you get started.

Regular Outgoings

It's easy to remember what needs to be paid out every week: groceries have to be bought, bus fares paid and we may have to buy lunch at work!

Even when it's monthly we know the kind of thing that goes out of our account: the mortgage/rent; direct debits for everything from the gas to the gym. The problem comes with the less frequent stuff, or the 'surprises' that can hit every family during the year (see table).

Look back over your diary/calendar and see what kinds of things cropped up and plan for them next year. Set up a contingency fund for the unexpected (e.g. the washing machine breaking or a medical bill).

Use a calender to set out events you KNOW will occur: everyone whose birthday you have to pay for; Christmas; Back to school costs (uniforms, books etc); your summer holiday, etc. We'll also have property and water taxes. Don't let them creep up on you so you're scrambling to find cash. If necessary break it down to a monthly amount and put something by to prepare.

Go Online

If you're not banking online, get started. It's not only cheaper but a budget control in itself. Most banks will let you set up a number of deposit accounts for free.

I have four (yes!) and make sure they're named for different events that will arise, e.g. one is medium term saving for a car change; another might be for holidays etc. That way, if you transfer from one to the other you'll need a really good reason!

Buy Prize Bonds

They cost €6.25 each and you must hold them for at least three months. That alone makes them a budgeting tool. There is no interest on bank deposits now, so you're not losing money. Buy as many as you can afford each month and cash them in for next Christmas or summer. Who knows: you might win a prize along the way!

Utilities

For reasons which I've never understood, gas and electricity companies bill bi-monthly. But most offer budget plans to spread the cost over 12 months.

I have found this invaluable in my own home as I know exactly what's going out and there are no big winter shocks. For the €160 TV licence, start buying TV stamps.

Pay Pocket-money

It might seem like an extra cost, but paying children pocket-money is a super lesson in budgeting (as long as you don't top it up along the way!). Yes, they might spend the first one in five minutes, but they'll learn. If you can afford it, pay their age e.g. €7 for a 7-year-old but they must save half and spend half.

Happy New Year and make it a consumer friendly one!


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