It might not gladden your heart on this dreary Monday to learn that there are more than three long, dark, cold, probably damp and almost certainly skint weeks left in what many of us consider the cruellest month of the year.
But Pricewatch is nothing if not upbeat, and with 23 days left in the first month of 2023, we thought we might suggest resolutions you can make that should improve your financial position over the year ahead.
Buy into spend-nothing days: Spending can easily become a habit: a takeaway coffee that isn’t really needed, or a quick dip into Penneys just to see what’s new with the fast fashion giant – you know the way it is. You’ve heard of dry January, but what about no-buy January? Challenge yourself to buy absolutely nothing outside of what you need to survive between now and the end of the month, and then have at least two spend-nothing days every week from the start of next month to the end of the year. It might sound miserable, but a conscious decision to nominate two days as off-limits for spending will give you a sense of control over where your money goes.
Avoid ads: Social media can be a menace. It knows what we like, because it is either listening to our conversations or silently observing what we search for and what we buy and then targeting us with more of that kind of stuff. It is vital we ignore the enticing mails from All Saints or the Le Creuset reels that pop up on our insta-feeds. If we do that, we will be happier and wealthier and a whole lot more chilled out than the conspicuous consumer we might otherwise be.
Audit yourself: Another not entirely fun-sounding tip, but vital all the same. Spend some time this month working out all your incomings and outgoings, write it all down, or use a spreadsheet. When you have all the numbers laid out you can start to make better decisions about what you have and what you need to do to improve your circumstances.
Dear Diary: Keep a spending diary; not forever, but for the rest of this month, recording every cent you spend.
Save something for you: Far too often we forget to pay ourselves. We work from the start of the month to the end and can be left with nothing to show for it. So do whatever it takes to set aside something for yourself each month over the next year. The amount is less important than the act of saving itself, and make sure to put it in a hard-to-reach place like the credit union or the post office.
Subs standard: How many music and video streaming subscriptions do you have? How many of them do you use at least four times a week? Did you sign up to a fitness programme on your phone last year and is the annual charge that you completely forgot about – mostly because you completely forgot about the fitness programme – about to hit your bank account? Go through your bank and credit card statements for the last 12 months and take note of all the subscriptions you have. It may well be that they offer great value for money and give you access to news and entertainment at a very low cost, but if not, get rid of them.
Shop local: By shopping in the local butcher, baker or candlestick maker, you support your neighbours in a tangible way – and in the current cost-of-living crisis they really could do with your support. You might also find better quality, better service and sometimes, better value.
Shop different: If you do your shopping in Aldi, visit your nearest Lidl instead. Or if you’re a fan of Dunnes, try Supervalu. More often than not we shop in the same supermarkets out of habit, but by doing the “big shop” in a different supermarket at least once over the next 23 days, you might find more interesting things for less. And if you don’t shop in Aldi or Lidl regularly, give them a go, they could save you money and will surely save you time – mainly because they have less than 20 per cent of the stock a really big supermarket might have.
Make lists: There is a lot of talk of mindfulness at this time of year and we reckon it should be linked to our supermarket shopping habits too – and by far the best way to be a mindful shopper is to be a “listy” shopper. Irish households routinely bin as much as €700 worth of food each year, but if you make a list and stick to it, treat two-for-one deals on fresh food with suspicion and never shop while hungry, you just might find yourself a whole lot better off.
Keep a paper trail: If you make a call to a provider to query something or complain, then log the date and time and who you spoke to in a single word document you keep for such purposes. It is not that much hassle, particularly when compared with the hassle of getting redress if things go wrong and you can’t find any of the records you need.
Control your impulses: People who shop on impulse rarely make the best decisions. So always ask yourself two questions: Do you really need this thing? And is this thing really good value for money? And then go away and think about it for a while. And if days pass and you still want it, then maybe then go buy it. And if it’s gone, then clearly it wasn’t meant to be!
Be suspicious: Randomly received text messages and Facebook posts promising you free iPads, perfect skin or rock hard abs are nonsense. And if you ever get an unsolicited email from your bank, from Revenue or anyone else asking for your bank details – or even just your name and email address – it is a scam.
Cook more. It is cheaper and better for your physical and mental wellbeing than processed food. Ready meals can be five times more expensive than their constituent parts, and worse for you. And remember, batch cooking will save you money, but only if you are ruthlessly efficient with your freezer and actually eat what you freeze.
Seek out free things: Joining a library is free and can save you a packet, particularly if you have young children, and remember that museums and galleries are not just for tourists.
Drink more tap water: Ireland has a good supply of good-quality tap water and there should be no reason to buy bottled water – which is incredibly bad for the environment and your wallet. If you insist on having fizzy water, invest in a Sodastream.
Stay on two wheels or two feet: Cyclists and walkers are healthier than drivers. Leaving the car at home just one day a week could save you hundreds of euro a year and make you live longer too.
Switch and save 1: If you have health insurance and have not changed provider for a few years, do it before your next renewal date and you could save a lot of money without losing any real benefits. Remember, if you switch from a comparable plan with company A to one with company B, you don’t lose any cover and don’t have to endure any waiting period.
Switch and save 2: By switching from a gas or electricity provider charging you the standard rate to one offering a discounted rate, you could easily save at least €300 over the next 12 months.
Don’t be a pushover: If you have a grievance with a company, persist. Don’t just give up if it seems like too much hassle. That’s just playing into their hands. But remember that if you have a grievance, there is little or no point in shouting at the lowest-paid staff member who has no power to effect change. Always be polite – and always make sure you are addressing your complaints to the right people. And if all else fails, mail Pricewatch.
Shop second hand: There has never been a better time to buy second hand. The circular economy is on-trend and it is better for both the environment and for your wallet. Remember the maxim: It doesn’t have to be new, it just has to be new to me.
Empty your wardrobe: For it to work, the circular economy has to be, well, circular. If you have clothes that you don’t wear, bring them to the charity shops of your choice and allow others to get benefit from them. It’s a simple enough exercise. Open your wardrobe. If there are clothes in it that you haven’t worn in the last 12 months, give them to someone who might actually wear them.
Declutter: New year, new you, right? Whatever about that, use some of the time when you are not going out partying in the weeks ahead to declutter your home. Without being all Marie Kondo about it, if it doesn’t bring you joy, get rid of it.
Sell, sell sell: It has never been easier to sell the stuff you no longer have any use for, using platforms such as Depop, Donedeal and eBay. Or maybe you fancy swapping your old clothes for new – to you – ones? Well, the likes of Zalando or Nuw might have your covered.
Track your mortgage rate carefully
Last year was a nightmare for hundreds of thousands of Irish mortgage holders on tracker or variable rates, with multiple interest rate hikes from the European Central Bank adding hundreds of euro onto the monthly bills faced by many people. But what does it all mean, and are there any savings on the table? Martina Hennessy from online mortgage broker doddl.ie has some answers.
“The Irish mortgage market experienced rates increase for the first time in over a decade in 2022. Whereas mortgage holders in Europe fix their rate for the whole of mortgage, in Ireland we are a nation of short-term fixed-rate mortgage holders and as such [are] exposed to rate increases.”
She says €13 billion in mortgages will be rolling off fixed rates in the next three years and “what awaits is a higher interest rate environment where many will see their largest monthly financial commitment increase significantly”.
The good news is “there are still some strong rates to be secured, you just need to search harder to get better value. Those eligible for ‘Green’ rates, with a building energy rating of B3 or above, have the ability to switch and lock into the lowest fixed rates available, starting at 2.15 per cent for all loan-to-values up to 90 per cent. There are also high-value mortgage rates, for mortgages €250,000 and above, starting from 2.45 per cent for four years fixed.”
For people falling outside of the Green or high-value categories, there are four-year fixed rate mortgages of 2.7 per cent available to lock down security over repayments.
“The key for anyone switching mortgage right now is to do your research or get market-based advice from a broker to search out these lower rates. There is a difference of 3.05 per cent between the highest and lowest five-year fixed rate available on the market, and so it is hugely important that before you lock down a fixed rate you ensure you get the best rate available to you. Don’t jump at the first rate offered to you as it could cost you significantly.”
She says there are an estimated 220,000 mortgage holders on standard variable rates of up to 4.5 per cent. “Unless you have a specific reason to be on a variable rate, such as you plan to pay off your mortgage, then a fixed rate should be strongly considered. Fixed rates are lower than variable rates and also offer security over repayments.”
Do you need it – or just want it?
The so called debt-free community continues to grow on Instagram, so we figured we’d ask some of the Irish finfluencers for their top financial tips for the year ahead. First up is Emer Farrell, who runs the @onefootinthesave Instagram account.
The first thing she suggests is a review of your last three months’ spending. “Get those statements out! You need to know where your money has been going. All those takeaways, impulse buys and middle-aisle purchases add up! Mark each item as a Need or a Want. The Needs will form the bones of your budget.”
Once that is done, you should look at creating what she calls Saving Pots for annual expenses. “Spreading the cost of annual expenses across the year takes the sting out of big events like Christmas, Holidays or Back to School expenses. Work out a budget for each, divide that figure by the number of months you have until you need the money, and put that amount aside each month.”
Then she suggests people should always get the best price for absolutely everything they buy. “Always be on the lookout for the best value. This extends to so many of our expenses – switching electricity or phone providers, buying more own-brand products at the supermarket, or searching for discount codes when buying online.”
We should also look for free alternatives first. “Choose free online workouts or a walk in your local park over gym fees. Use your Library app for books, even audiobooks, ebooks and magazines. When it comes to learning, there are a wealth of courses available on YouTube.”
And finally, she encourages people to be grateful for what they already have. “Practising gratitude has been one of the key things that has helped me from wasting money. When we’re grateful for the things we already own, and actually using what we have, we are more inclined to spend consciously. When we are spending consciously, we’re not letting things (and money!) go to waste.”