In these difficult times. it’s important for families to budget properly and to cut down on unnecessary expenses. John Lowe gives some tips in the Sunday Business Post.
Tips to hang onto family cash
05 June 2011
It is crucial to complete a household budget as your first exercise. First, work out exactly what you are spending each month and, from this, determine initially how much disposable – and, if applicable, surplus – income you have.
That is what is left after tax, and after you pay your rent or mortgage, household bills, food, petrol and ‘spending money’.
If your expenditure exceeds your income, you then have two choices – cut costs or earn more.
Remember to ask yourself: do you really need to buy that product or service and, if you do, is there a cheaper or better alternative?
2. Cut your banking and insurance bills
Overdrafts, especially those exceeding the limits, should be a no-no. Also, try to avoid arrangement fees, high interest rates and referral fees.
Surcharges, which are additional interest charges applied for exceeding overdraft limits, can be up to another 12 per cent annually, and unpaid fees all take their toll on your disposable income.
Credit card costs are similar – try and use your credit card like a charge card and pay it all off when the payment is due.
But be wary of using your credit card to take out cash, as you can be charge up to 26 per cent from the time you withdraw.
You should also shop around for the best mortgage and loan deals, not to mention insurance premiums – life, health, buildings and contents, travel and even your car.
Always compare quotes from your insurer with other options available in the market, or seek advice from an independent authorised adviser.
3. Find the right savings accounts
The most important decision about savings can be summed up in one word: start.
By planning to save, you are setting immediate goals – for holidays, an attic conversion, the new plasma 3D screen television you want or even funding Christmas presents for the children.
Save small, but save often, whether in a bank’s regular saver account, the post office or your local credit union.
Ensure your deposit-taker is regulated.
The Financial Regulator’s deposit protection scheme covers you for up to €100,000.Then it is a simple matter of finding the best rate. Remember the mantra: better in your pocket than theirs. So what’s the best regular saver account currently?
You can save between €100 and €1,000 per month for 12 months and receive 4 per cent interest from both EBS’s family regular saver account and Ulster Bank’s Special Interest deposit account.
4. Cut down your household bills
When you analyse your household bills, you will find you may have left the lights on for too long, or not used the washing machine on the night-time rate or had the central heating blazing while you were away for the weekend.
Choose the most appropriate utility plan for your needs and take advantage of the deals created by competition in the sector.
Travel bills can also be cut easily. Buy discounted or tax friendly bus passes, get the best rates on tolls by using www.tolltag.ie, or try a bicycle over time; not only is it cheaper, but better for you physically. If planning a holiday, hold out for last-minute deals.
Across all areas of spending, you will find ways to reduce your overheads. Always adhere to the Money Doctor mantra – stop spending and, if you must spend, ensure you are getting the best value.
5. Look for bargains
* Take advantage of special in-store offers – for instance, SuperValu is delivering real savings to parents with a baby and toddler event, including value-for-money offers on all things baby until June 18.
*Use coupons and discount
vouchers. * Go online and use discount websites – www.fatcheese.ie and www.onoffer.ie to name but two.
* Have fun for free: take the family to the town library, art gallery, museum or park.
*Generic and bulk buying – especially for family purchases, like nappies and baby food.
* Clothes: buy tough-wearing items and remember your family and friends will appreciate the clothes once your baby’s grown out of them.
There is no shame in hand medowns.
* Food: portion control is key. Follow healthy eating guidelines.
Portions of mashed potato or rice should be the size of a computer mouse.
For cheese, you should eat a golf ball-sized portion, while vegetables should take up over half your plate.
*Water is free, and far better for your children and you, than any soft drink – and tap water at that.