Keep a tight grip on your finances
So, what do you do in these straitened economic times to soften any financial blow as much as possible?
Develop a clear view of your spending
A really good place to start is with a clear and honest picture of your spending habits. This is a little tedious, but a relatively straightforward exercise. Over a period of two months, record every single euro that you spend. This is actually much easier now than before Covid, when we were all using a lot more cash and had more frequent transactions. The benefit of doing this exercise is that it usually reveals areas of wasted, discretionary spending and also expenditure where you are clearly overpaying.
Build a household budget
Another really important step is to identify exactly your net income going forwards and how you can marry this with your expenditure. If your income exceeds your expenditure, well great, there’s an opportunity here to boost your savings. If not, it’s time to look for ways to cut back your spending to stay within your budget. If your debt repayments are an issue, speak to your lenders before your debt becomes a problem.
Get help and advice
This one should be top of the list… As your Financial Broker, we may be able to help you in a number of ways. First of all, we might be able to simply offer you a 2nd opinion in relation to some of your financial challenges or guide you towards a better solution. We may be able to point you in the direction of a specialist who can help you, should you have a specific challenge that needs expert help. Often we help people to review their financial portfolio, identify savings and sometimes find opportunities to restructure products to better meet your emerging needs.
Claim whatever you’re entitled to
There may also be opportunities for you to claim unexpected tax relief. If you have been asked to work from home because of the pandemic, you may be able to claim tax relief to allay some increased home expenses. This can be claimed at a rate of €3.20 per day, which over a year is not an inconsequential amount of money. More information can be found here (link to https://www.citizensinformation.ie/en/money_and_tax/tax/income_tax_credits_and_reliefs/eworking_and_tax_relief.html)
Look for savings – everywhere
Now it’s time to get to work and look for areas of savings. Here are a few of our favourites,
- Mortgage: Are there opportunities to achieve monthly savings through switching your mortgage to a more competitive rate?
- Energy / phone services: These providers rely on the inertia of existing subscribers not bothering to shop around for a better deal at renewal. This is always an expensive mistake – shop around before you renew.
- Grocery shopping: An old fashioned shopping list is a must when grocery shopping. It helps you to avoid buying items you don’t need and not to fall for all of the in-store promotions. Being organised helps you to avail of vouchers you might have and to max out on the benefits available under loyalty programmes.
- Takeaways: Going back to the record of your spending, you might be horrified at how much you spend on takeaway food. Yes, it can be very handy, but there’s a price to be paid for this convenience.
- Club memberships: Are you using the gym / golf club / tennis club enough to justify the cost? If times are very tough, can you let these go and get your exercise in elsewhere?
- Media subscriptions: These have really crept up on many of us in recent years… We all pay seemingly small monthly amounts for music streaming, news services, on demand TV services etc. Are you using them and do you really need them?
Hopefully we’ve given you a few areas to consider, that when implemented can help soften any financial blow you’ve felt as a result of the Covid pandemic / cost of living crisis. A little structure and commitment to tightening your belt should deliver better days ahead.