In a previous post we spoke about how setting a budget can have a major impact on your financial well-being. Here are a few more tips to help you on your way to becoming a savvy saver!
Set up a Savings Account
We all know the saying “out of sight, out of mind”. Try taking this approach with your finances. Set up a direct debit mandate to transfer a percentage of your income to your savings account as soon as you are paid each month. If the funds aren’t in your current account, you’re much less likely to be tempted to spend. This will also help you to build up an emergency fund, which experts recommend should include around 3-6 months’ worth of your monthly living expenses (including rent or mortgage payments, insurance, fuel and utility bills).
Avoid Credit Cards
Credit card debt can be a slippery slope. If you are unable to pay off the balance in full each month the interest rates are usually very high. For example, if you buy a TV for €1,000 by using a credit card with an 18% interest rate, and you make the minimum repayment each month, then you will end up paying €175 in interest after one year and still owe €946 on your purchase. Once you fall into a cycle of credit card debt, it can be very hard to get out.
Use Cash Rather than Contactless Payments
There is no doubt that contactless payment is convenient and easy (some might even say too easy!). However, it does make it more difficult to keep track of exactly what you’re spending, and all those little taps throughout the day quickly add up. Think about using cash instead for a week or two to get an accurate view of how you are spending your money. Having a spending limit set in cash will also make it easier to stick to a budget. Much like with the savings account, if you don’t have access to your money in your current account, you can’t be tempted to spend it on impulse purchases.
Reduce Monthly Bills
With the cost of living crisis impacting almost every aspect of our lives, people are more conscious then ever about what they are paying for groceries and utilities. For those who are willing to take the time to review their household expenses, there are definitely savings to be made. Here are some key areas where you may be able to save yourself some cash:
- Switch your energy supplier – Energy costs have increased massively in recent months. While prices have risen across all providers, the best way to offset these price hikes is to switch.
- Switch your broadband and TV provider – Broadband providers keep their best deals for brand new customers by offering them heavily discounted broadband and TV for up to a year at a time. However, once this discounted period ends you will be paying significantly more on their standard price. Avoid this by switching provider each year.
- Move to a SIM-only mobile deal – SIM only plans are generally much cheaper than billpay plans because you don’t incur the cost of buying a phone. So, if you’re out of contract and don’t require an upgrade yet, a SIM only deal might be a good option for you.
- Switch your mortgage – your mortgage is likely to be your biggest household expense, so shop around for the best rates. Most banks now have an online switcher calculator to help you find out how much you could save.
- Switch your health insurance – Older health insurance plans are often outdated in terms of what they cover and offer very poor value for money. Shop around for the best value and best level of cover for you.
- Review your insurance cover – There is also potential to save money on your mortgage protection and life insurance cover.
If you were a smoker when you took out a policy and have now given up for 12 months or more, you are considered a non-smoker, meaning you can get the same level of cover for a significantly cheaper price.
Similarly, if you have paid any lump sums off your mortgage, it’s worth getting a quote to see if there are any savings to be made on your mortgage protection cover.