Get back to basics with a financial spring clean
The turn of the year is a time when resolutions, financial and health, are made – and now is the time of year when most of them are broken
From making soup for a few cent to knocking thousands off your mortgage – now is the time to look at your spending. Photograph: Frank Miller
As 2012 became 2013 many people made financial new year’s resolutions to which they convinced themselves they would stick but, as winter turns to spring (or at least is supposed to), many of those fiscally responsible resolutions have fallen by the wayside.
However, as you gorge yourself on left- over chocolate eggs today, maybe it would be good a time to renew those vows – and add a few more for good measure.
The first and easiest step many people can take to make big savings is to eat less meat. If you were to go vegetarian for just three days a week you would easily knock €10 off your weekly food spend. That is €510 a year – we’ll allow you to go mad for a week over Christmas. Don’t just eat less meat, eat more porridge. For breakfast, like, not at every meal. We’re not entirely mental.
You can buy a full month’ supply of Flahavans Progress Oatlets for one healthy adult for €3. A month’s supply of milk for that porridge will cost another fiver – less if you dilute it with water. This takes the total cost of breakfast for a month for one person to €8 or 30 cents a day, good value by any measure. Of course, eating porridge without anything to sweeten the deal might be a bit grim so we’ll add two jars of honey at €3 each.
Eating homemade soup can also add up to big savings, particularly if you take advantage of supermarket deals. Last week the Aldi Super Six deal had broccoli, carrots, kiwis, parsnips, potatoes and tomatoes at just 29 cent each.
We made imaginary soup out of five of these ingredients (we saved the kiwis for dessert) and got five good-sized portions for €1.50, or 30 cents a day, which is what our breakfast cost us. Imagine spending just €5.70 a week on your breakfast and dinner? You’d be able to have your dinner in Chapter One or some other fancy restaurant every night and still be quids in (well, perhaps not).
On your bike
One of the few tax benefits not yet cut by the Government is the bike-to-work scheme. If you have yet to sign up for it, then spring time is the time to do it. It is very simple. Your employer buys you your new bike and any bike equipment you may need up to a total value of €1,000. Full details are available from bikescheme.ie.
Anyone who lives with 10km of their place of work will spend at least €15 a week on commuting if they drive or take public transport. A cyclist spends nothing. If you live in the capital, sign up to the Dublin Bikes (dublinbikes.ie) scheme, too. It’s a lot cheaper than cabs. And remember that people who cycle every day live years longer than those who don’t.
Don’t bank on it
The days of free banking have gone the way of the property boom and the only way to cut back on bank charges is to manage your money better. Overdrafts are not a great idea but for many, they are unavoidable, so we’re not suggesting you always live within your means. What you need to do though is stop going over your overdraft limit as once you do, you are hit with savage referral fees and surcharge interest.
Going over your overdraft limit will cost over €130 a year with banks charging anywhere between €3.50 and €5.15 each time you go over the limit. Bank of Ireland will hit you with a referral fee of €10 if you breach your limit more than six times in three months.
How many times have you used your landline since the start of the year? If the answer is fewer than 10, you should really consider getting rid of it, particularly if you are with Eircom and haven’t signed up to any of its bundled packages. If that sounds like you, then you are most likely paying line rental of €26 a month.
And use Skype. Once you have broadband access, all your Skype-to-Skype calls are free.
Compare the market
There are a growing number of price comparison websites which will save you money on your utility bills and, if you are proactive when it comes to switching, you could save over €20 a month. Remember that even if you have switched before you will need to do it again. Most discounts last for just 12 months and will need to be refreshed if you want to save money.
Sometimes you can get the better deal without switching. Often all you need to do is threaten to switch and your provider, if they have any sense or want to hang on to your cents, will do a deal.
Paying over the odds
Okay so, much of the attention at present is on those in mortgage arrears but if you are not one of them and have even a small amount of money left over at the end of the month, you could consider paying off your mortgage a little faster.
If you pay €50 more into your mortgage account every month you will save hundreds of euros in mortgage interest a year and pay it off a good bit earlier. Let’s say you have 20 years left on a mortgage of €250,000 and a tracker of about 2 per cent. Your monthly repayments now are about €1,265 which will see you pay interest of €53,000.
If you can pay an extra €50 a month off your mortgage, you will reduce the overall cost of your mortgage and you will knock a year off the loan – and save €2,570 in interest. Because Dirt has been raised and is now 33 per cent, the incentive to put the spare €50 into your mortgage is even greater.
No credit to them
Normally we suggest that people who have run up any kind of balance on their credit card should switch to a zero-interest option. The options here now, however, are very limited as credit card companies run scared of offering credit to anyone. It is still worth shopping around if you can.
AIB’s Click card currently has an APR of just 13.6 per cent. The same bank’s Be card is 22.6 per cent – maybe they should have called it “Be Screwed”. Also keep an eye on the charges attached to using your card. The rate of interest charged if you withdraw money with AIB’s Click card is 19.68 per cent, while Bank of Ireland can charge you as much as 21.36 per cent.