Take the head-melt out of managing your cash.
It’s payday. THANK GOD. You’ve been counting down the days to this moment since… well, last payday, and now a fresh batch of digits have filled up your bank account. Oh, the things you can spend this money on! But wait… oh no, what’s that? Your electricity bill is especially high this month. You forgot about those car repairs you needed. And SHIT. Those loan repayments you need to shell out for. Before you know it, you’re right back where you started, patiently awaiting payday.
Or maybe that’s not you at all. Maybe you’re done living paycheque to paycheque, but money still scares the bejaysus out of you and the very mention of mortgages, investments or pension funds makes your head spin. Maybe you feel comfortable but you fret about what could happen if your circumstances changed.
Or perhaps, like so many people in Ireland you’re living under a mountain of debt and you just can’t seem to get out from under it. Money can be stressful, so how can you stay on top of it? We asked the experts…
You’ve an ASOS addiction that you aren’t prepared to quit, you like the odd takeaway coffee and there’s not a chance you’re going to give up your annual vaycay with the gals, so, can you still manage to squirrel away some cash all while living life to the full?
First off, always follow the money mantras, advises Rosie Bannister, money analyst at MoneySavingExpert.com. “Before you buy anything, ask yourself ‘Do I need it? Can I afford it? Is it worth it?’ Rosie instructs. “If the answer to any of those is no, then rethink if you really want it. If you decide you do, look around to see if you can get it cheaper elsewhere first. You could make savings just by thinking a bit more before you buy.” It pays to shop around.
Next, be wary of auto renewals. “If you just auto-renew your car and home insurance, STOP!” Rosie warns.
You’re wasting a fortune, and can often do so much better as a new customer. When your renewal is coming up, check the prices with other insurers to boost your chance of finding the cheapest price. Though always check the policy is right for you. The same goes for other expenses like mobiles and broadband – make sure you check regularly for cheaper deals when your contracts end.
Then, take a look at the brands you’re buying. Sometimes at the supermarket you really are just paying for the label. “It’s not about buying lower quality goods, but beating the way supermarkets hypnotise us into unnecessarily paying more for premium brands,” Rosie notes. “Why not take the downshift challenge, buying a lesser brand and seeing if you can tell the difference? While you’re at it, make sure you don’t go to the supermarket hungry, as you’ll likely buy more. And don’t be drawn in by offers – if you weren’t going to buy it anyway, it’s not worth it.”
Still need a little extra cash leeway? “Look through your cupboards and sell anything you no longer use,” Rosie advises. “Flog it on eBay, Facebook Marketplace or even car-boot it and you could make a pretty penny. Do make sure you keep safe when selling though – unless you’re using eBay where you can see buyers’ feedback, face-to-face is best. Just make sure you use common sense, meeting in a public place or taking a friend along.” Even better, make selling used items a regular habit and stash your earnings away as savings each time.
Maybe you’ve got student debt or lingering bills from a stupid decision you made when you were younger. Either way, paying off any kind of debt can be daunting but there are ways to make it more manageable. But where to start? First things first, “get on top of that credit card bill,” advises Gavin Keenan, managing director of Keenan Financial Planning.
“We all have one, and they can be very handy (sometimes too handy) but once managed well they’ll never be an issue.” To get cracking, “try not to make just the bare minimum monthly repayment required or you’ll never get that balance down,” Gavin warns. A better tactic? Review your finances, and figure out what’s the maximum amount you’d be able to pay each month while still having enough for all your weekly outgoings. You’ll climb that nasty debt mountain a lot quicker.
For Gavin, getting on top of debt quickly is key. “Make a plan to clear off early any personal loans you might have,” he advises. “You might be paying back on a loan with interest rates as high as 12%. The lenders want you to take your time and pay this back over the full term, but the quicker you clear it the less money they make and the more you actually save.”
When Nina, 29, found herself in dire straits thanks to debt payments, she took on a side hustle so she could pay off more each month. “It was a big sacrifice at the time, but I knew by giving up a couple of evenings a week and taking on a couple of extra hours at a restaurant, I’d have an extra income that I could put solely towards paying off my loans.”
Seeing all those digits on the statement every month was starting to become too much to take, so increasing what I had coming in seemed like the obvious solution. I looked for other opportunities where I could pick up extra cash too. I took up some cleaning jobs when I could fit them in and I helped my sister out at her cafe on the weekends.
“Every cent I earned at those extra jobs I put towards paying off my debt and it meant I was able to chip away at it so much more quickly. I cleared all my debts within 16 months and haven’t looked back.”
Once you’ve gotten on top of things? “Call your bank and ask them to reduce your credit limit,” advises Gavin. “The less you can put on it, the less you’ll owe back.”
Check back tomorrow for the part two, with advice on how to stop living pay day to pay day and – dun dun dun – pensions.