Your Money: Don’t pay price of finance woes

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Your Money: Don’t pay price of finance woes

As bill issues and credit card use spiral here are six ways to ease pressure


Payday probe: Examining statements for direct debits and standing orders and cutting or cancelling costs can put money back in your pocket
Payday probe: Examining statements for direct debits and standing orders and cutting or cancelling costs can put money back in your pocket

New research from Switcher.ie has revealed that 65pc of Irish consumers cannot afford essential household bills with their regular income; almost four in 10 (38pc) dip into their savings to cover household running costs.

What makes it more alarming is that over a quarter turned to credit cards to cover everyday bills like groceries rather than using it as a temporary financial extension for big-ticket items.

This week I’m looking at situations which create the most financial pressure and what you can do to stop money running away from you.

Motor Insurance caused the most pain for 44pc of us, with rent/mortgage payments, broadband and TV packages and electricity also piling on the stress.

It’s fine to dip into savings every now and then when things get too tight, after all that’s what they’re there for, but doing it regularly is a sign that there might be a better way to get control of your finances.

Previous research has revealed that 54pc of people believe their financial worries have an impact on their mental health and 44pc on their physical health, which is a strain that’s not worth it.

If you are one of them, there are some simple things you can do to get started:

I’m running out of cash

If your money runs out before the month does, your issue is budgeting. Try spending cash only for a week (be strict, hide your cards), and keep all receipts. You’ll be surprised how quickly a couple of coffees a day adds up (€42 pw) or a bought salad at work (€40 pw) or even a bottle of water (€17.50 pw). If you’re buying petrol, don’t buy anything else on impulse in the garage.

I’m buying groceries on visa

Credit cards should be used as a last resort, not an extension of your current account.

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It’s other people’s money, not your own and the interest payments are eye-watering. Use your debit card only; even tipping into overdraft is cheaper.

Stop using contactless

It’s a discipline disaster. It’s far too easy to ‘tap’ and you get off track on spending. It’s even worse on a credit card. Just use the PIN instead and pocket the receipt – it’s more ‘mindful’.

Money disappears on payday

Chances are it’s direct debits swiping your salary. Print out a months’ worth of statements – highlight every direct debit and standing order.

Do you know what it’s for and why you need it? This is a great chance to switch providers, products or simply cancel subscriptions. For example, if you’re just watching Irish channels and streaming Netflix or online for everything else, why pay for an expensive cable service?

Switching or bundling gas and electricity supplier can save hundreds of euro as a ‘new’ customer every year.

Are you paying for an insurance policy that could be cheaper elsewhere? It’s time to get a re-quote.

I’ve been mugged!

If cash is disappearing from your account chances are it’s for something that you’ve signed up to and forgotten, or an ’emergency’ bill that’s arrived.

While it’s easy to keep track of very regular spending like Leap cards or weekly groceries, we often forget rare, occasional or once-off things like vet bills, car servicing, property tax, window-cleaning, hairdressing, refuse charges, friends’ birthday presents. Even back to school or extra-curricular class charges can surprise us.

Create a ‘household budget’ account

It’s free to set up a deposit account with your bank. Estimate in a year how much you will need for all those non-recurring events and divide by 12. This is the amount you should be saving every month toward it. You’ll never run out.

Irish Independent

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