Week One: Pricewatch five-grand challenge. Cut your spending by €5,000 a year

Can we help you save five grand a year without draining the colour from your life and forcing you to eke out a grim existence own-brand beans and tap water? Maybe we can. While nearly seven years of austerity have knocked the financial stuffing out of the nation and forced most of us to take stock of our spending at least once – and more likely many times – there are still steps that many people could and should take that would see their cost of living fall.

The own-brand grocery sector has grown rapidly in the Republic in recent years, but two-thirds of what we buy still comes with a brand name attached. Massive savings can be made by switching health insurer but fewer than 30 per cent of us have moved provider, and only a tiny percentage has switched more than once.

Switching fatigue has also set in when it comes to gas and electricity. A dizzying array of mobile phone packages and extended contracts have turned what should be a simple money-saving sector into something more labyrinthine and harder to decode than a set of accounts from the Vatican bank. The only ones to benefit from the confusion are the operators.

The third annual spending survey from the AA, published in this paper last week, combined with our own data, suggests that when bills are totted up the average Irish family of two adults and two children needs just over €50,000 a year – or €14,000 more than the average industrial wage – to keep itself afloat.

This means the earner in a single- income family needs to make more than €70,000 a year to cover those costs, which goes a long way towards explaining why the squeezed middle is more squeezed than ever in spite of the Government’s “largesse” in its most recent budget. So, starting from here, and using a net €50,000 as a base figure, can we help consumers cut their annual costs by 10 per cent without affecting their quality of life?

We think we can. And at the end of the seven weeks we hope to have a bit more in the kitty to cover the cost of Christmas and some class of summer holiday in 2015.

So where to begin? Let’s start with groceries, the biggest drain on most households, with the exception of mortgages, perhaps – and in the current climate, there’s not a lot we can suggest to cut costs on that front unless we can include “win the Lotto” as a tip.

Food wastage: €700

According to the Environmental Protection Agency, Irish households dispose of more than 300,000 tons of food waste each year, or 80kg of food per person. Some 60 per cent of this waste (including plate scrapings, leftovers, gone-off fruit and veg, perishables that have passed their use-by date) is avoidable, while a further 20 per cent (including things such as bread crusts and potato skins) are potentially avoidable. The EPA says the average Irish household unnecessarily wastes €700 a year, which means that as a nation, we are throwing more than €1 billion worth of food in the bin every year.

Shopping smarter can stop that from happening. Supermarkets spend big money working out ways to make us spend big too. We make it too easy for them by arriving disorganised and hungry into supermarkets without a notion of what we need or want. So make sure to never shop when you are hungry and always make a weekly menu plan outlining what you want to eat each day at home and at work. Then bring the list with you and stick to it. It will cut your costs and speed up your shopping.

Keep it communal

Apart from exerting more control over what your buy, you need to control how much you cook and how you divvy it up. It might be the Irish Mammy syndrome, but we cook too much and put too much on our plates. Think about how much you are actually likely to eat – experience will guide you – and then cook that amount and no more. And stop putting food on plates – when people help themselves from communal bowls, leftovers are more likely to be kept, but when everything is mixed together on a plate, the leftovers will be binned.

Timing the shop helps to trim costs. A supermarket that stays open until 9pm will start discounting thousands of euros worth of stock from 6pm because it has reaching its sell-by or use-by date.

Buy this and freeze it but always makes sure special offers have been applied and the right prices charged when you are at the checkout. Mistakes can be made; just make sure you don't pay for them. Ignore best-before dates: they are for guidance only. Common sense will tell you what is not good to eat. Do not ignore use-by dates, mind you; that way sickness lies. The rise of the German discounters in recent years has been one of the most striking things about the Irish retail space – along with the disappearance of Superquinn – but while business is booming, more than 80 per cent of Irish shoppers do not go through the doors of Lidl or Aldi. They are cheaper, and, while stock is limited, that does limit the amount of money you can spend and the time it takes.

Over the past 12 months Aldi has been pushing its Shop and Save campaign hard. It claims that people can save between €35 and €80 a week by switching to it from one of the more mainstream retailers. While all advertising should be taken with more than a pinch of salt, there is also more than a grain of truth in what the campaign says. Savings of €80 a week might be possible, but not in our experience.

Go own-brand

Last year, as an experiment, Pricewatch went all own-brand for a week. The amount we spent on own-brand products where branded equivalents were readily available came to €79.10 compared with €108.29 had we stuck with brand items. This was a saving of €29.19 a week. Over a year, the savings amount to €1,517.88.

We would need to earn more than three grand before tax to cover that bill.

Generally speaking you don’t have to sacrifice quality when switching. Many well-known brands make own-brand products that sell for less than premium brands.

Weetabix, on top of its own name product, also makes wheat biscuits for multiple retailers that sell for less. A 48-pack of Weetabix sells in Tesco for €5.98. The same size packet of own-brand costs €3.79. If you use two boxes a month, that one switch will save you €57 a year.

A two-litre container of milk with a recognisable brand name costs about €1.89, while two litres of own-brand milk – from the same cows – is €1.69. If you go through two litres daily you save yourself another €73 each year by making that one switch.

Then take bread. Pat the Baker’s 800g brown pan costs €1.69. A similarly-sized pan from Tesco’s own-brand range – and not the cheapest, either – is 99 cent. If you go through two sliced pans a week and made the switch, you save another €72.80 a year. Add that up and you save €203 a year, on breakfast alone – and you can even hang on to your branded tea.

The merits of own-brand are undeniable. Killowen sells a great artisan yoghurt under its own name but it makes private- label yoghurt for less. Johnston, Mooney & O'Brien, Irish Pride and Pat the Baker all make breads for own-brand labels, while Glanbia, Connacht Gold and Irish Yogurt make dairy products.

Odlums sells own-brand flour and Bewley’s makes tea for two chains. Lir sells high-end chocolates under multiple labels and Bachelors peas and beans are bought and sold under different names.

Local heroes

But savings are not only to be found in supermarkets: your local butcher is your friend and knows what the best-value meat is and how to cook it. If he offers to cut or trim cheap meat for you, say yes; it can be grim otherwise. Mind you, if you ate a little less meat, you would save money (and possibly live longer).

Speciality stores will help you cut costs. Soy sauce, chilli sauce and rice are just three items that sell in Asian markets for a fraction of what you would pay in your local supermarket. They source it directly from the East and get a better price. The brands may be unrecognisable to you, but they tend to be very well-known in their country of origin. And that matters.

So, by shopping smarter, switching to own-brand for some products and exercising a little self-control, we reckon you could knock €2,200 off your annual bill. And you’ll probably eat better too.

CASE STUDY: HOW ONE SAVVY SHOPPER CUTS COSTS

Caitríona Redmond is a very savvy shopper who feeds herself, her husband two young boys and a teenage girl on just €100 a week, which also includes bin tags, prescriptions, nappies, cleaning materials “and anything else I may need during the week”.

She wasn’t always so frugal. “Wind the clock back seven years and I would have spent as much as three times my current budget on groceries; that was just for my husband, the now 15-year-old and me. For bigger-ticket items I always did the research and shopped around. Nowadays I apply the same know-how to grocery shopping. When I think back to the amount of money I wasted on groceries that often ended up in the bin, I feel a little bit sick.”

She thinks people waste money in the name of convenience. “If you are prepared to cook meals from scratch, using fresh ingredients, then you will always save money. For example, the leading Irish brand of organic oats work out just as cheap as a bowl of processed cereal; they’re also better for you, but it does take time to make porridge in the morning.

“Irish supermarkets have fresh fruit and vegetable deals every single week; couple that with a €25 pack of meat from a local butcher and you can eat like a king. It does mean you have to cook it from scratch, though, and many people don’t have the time, skills or desire to do this.”

She says three factors drive up grocery costs: processed foods, meat and treats. “If a family on a budget were to cut back on treat items, such as sweets, crisps and biscuits, cook from scratch and eat less meat, then they should be able to save at least €30 a week. Families who are prepared to shop around to get the deals on decent food could save even more.

“I’m a big fan of Aldi’s super-six deals for fruit and vegetables and SuperValu’s three items for €2 specials.”

THE FRUGAL FIVE: WAYS TO SAVE ON YOUR GROCERY BILLS

• 1 Plan ahead: Work out what you're going to eat and what you need to buy. Make lists and stick to them.
• 2 Cook a little less food and use communal serving bowls a little more more: you'll be amazed at the impact on your budget.
• 3 Keep your eyes peeled for special offers and relevant coupons. Do not buy perishables in bulk unless you can freeze them.
• 4 Make the switch to own-brand products – at least for some of your weekly shop.
• 5 Speciality stores will help you cut costs. Local greengrocers and butchers are often better value.