BY JOHN ELLIS, FINANCIAL ADVISOR
Many people feel the squeeze in the first quarter of the year and the Christmas bills can still cast a shadow for some. Add to that continuing inflation and still high energy costs, and it’s more important than ever to break free of bad spending habits and make positive changes.
Spring has arrived, so use this time when people traditionally have a clear out, a spring clean’ and decide this is the time you will begin decluttering your finances. Take the time to review your spending habits and deal with the bad ones as small changes over time can make big savings.
Make sure you know where your hard-earned cash is going and look for savings. Pull together your bank statements and analyse your income and expenditure. Start by creating a comprehensive budget that outlines all that income and expenses. Categorise your spending, including fixed costs like rent/mortgage, utilities, and insurance, as well as variable expenses such as groceries, entertainment, and nights out. Some banks have apps that make this easy and there are many online apps that will give a vivid picture of your spending habits.
Tackle your debts. It’s so easy to overspend especially using credit cards so it’s crucial you have a plan to pay back what you still owe. Expensive interest charges can add to your bottom line, so check if you can save by transferring your debt to another credit card provider as this will give you an interest free period and extra time to repay the debt. Better still – if you have money in a non or low-earning savings account – think about just paying the debt off in full immediately.
Review your energy consumption costs. Energy bills still continue to take a sizeable bite from household budgets, so it’s worth looking at ways to cut down energy use at home and how you can cut your costs by switching suppliers. You can really save by simply switching to a different gas and electricity provider.
Compare cover on your home and car cover insurances. Insurers can take advantage of our reluctance to review our policies and automatically review them especially if we are paying premiums on a monthly basis. Use comparison sites to search and switch to a better value insurer or, better still, use a competent broker.
Review your mortgage. If you’re on a standard variable rate mortgage, chances are you’re paying more than you need to. Talk to a mortgage broker who deals with the whole market about changing to a fixed-rate deal to take the guesswork out of your mortgage payments.
How much are you forking out for multiple TV streaming and digital entertainment sites? Contact your provider regarding your current bills as there is a near guarantee that you will save money. See if they have a family plan which could save money if there’s more than one person in your household.
Check your credit rating. The higher your credit rating, the better your chances of getting a mortgage, car or personal loan. Your credit report will help you spot any problems. This can be done on line and the average turn around is approximately 10 days from the date all the required identification document has been submitted. Go to centralcreditregister.ie to start.
While wielding your ‘financial duster’ start a savings account using the compound interest principle and be it ever so small over time it will build. Looking further into the future, review your pension and if you don’t have one in place now is the time to start. It’s important. And know that small changes can mean big savings and it’s less painful than you think.
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