Today - in an effort to get me blogging more often and offer some help in these tough times - starts a new feature called Money Monday!
I haven't talked much about budgeting here, but it's something I've learned much about in recent years. The Celtic Tiger bit this family in the ass as much as it did anyone else. Mostly it was our own fault but a few years ago we realised we were in trouble and got a plan together to pay off our debt. It has been hard. We got rid of one car and my husband cycled to work. We haven't taken a holiday since 2007 and we axed health insurance. We cut all non-essential spending and got a big lesson in day to day frugal living.
We essentially pay rent twice, once to our landlord and once to our debt. The good news is there is a light at the end of the tunnel. We will have our debt paid off in the latter half of this year and I thought it might be interesting to reflect back on some of the changes that made substantial differences to our savings! Hopefully there might be some ideas you can apply to your own situation. If you're lucky enough not to be feeling the pinch, perhaps it's a good idea to look at your finances anyways. When we pay off our debt there will be a huge portion of disposable income again but we plan on putting most of it away. They say you should have a six month emergency fund (as in six months worth of salaries) available at any given time, so our next step will be to build that up. Then of course there's the pipe dream of building our own house some day. Time will tell!
So here you go, ten things that helped us cut spending, from the small to the large. Some will be obvious, some not so much. I plan on continuing this with a series of posts on frugal meals, menus and ideas. Hope it helps!
1. Evaluate your Insurance Policies
Check all your insurance policies. Are you getting the best rates? Shopping around on insurance can save bundles. I've found No Nonsense to be the best for car insurance for us and AA will generally beat anyone on home/contents insurance.
Make sure that you are not over insured. This can greatly increase your premiums. Has your car decreased in value? Then update your policy to reflect this. Remember they will only pay out the market value at the time of an accident, so it's not worth paying extra for something you won't get. The same goes for contents. It's worth making a list of what you own and it's replacement cost. We found we were over-insuring by almost thirty thousand euro.
Look into increasing your excesses. Do you have an emergency fund or money set aside and available? If so, it's worth considering an excess increase. This can drastically reduce your premiums. If you have a thousand euro available at any given time, increase your excess to that amount and watch the savings come in on your premiums.
Do you need all your insurance policies? We cancelled our health insurance, which I realise is not an option for everyone, but given my husband's recent treatment with the highest VHI company cover, (he wasn't treated any different than public patients, no private room, priority or anyting) and it was not worth forking out the money for the rest of us (his company pays for his) as thankfully, we are relatively healthy to begin with.
2. Check your bank fees
It's no secret in this country that the banks are racketeers when it comes to fees, but there's generally room to get around these. For instance Bank of Ireland won't charge fees if you have a certain amount of online transactions in a quarter. They are tricky though, their quarters don't align with the calendar months and they don't advertise their dates, so find out from your branch. Look at switching accounts. Banks are losing customers left right and centre so most of them are offering competitive switching packages.
Look into credit unions! Credit Unions are amazing, I love them. There are no fees, they still care about customer service, they still have tellers, they open on Saturdays and late one night a week and they are much more generous with loans. Most of them offer budget accounts and free financial advise as well. If they did credit cards and mortgages like they do in America, the banks would seriously lose out.
3. Plan Your Meals
This is a huge one. I cannot even begin to tell you how much I save when I do this dilligently. I cut my grocery budget from almost 200 euro a week down to about seventy if I'm good. That's a family of five with one in nappies. Every Sunday I sit down and plan out meals for the week. I look in my freezer, fridge and pantry and see what I already have that I can use and plan at least three meals around that. Then I check the sales at all my grocery stores for the week and plan meals around that. I write up a specific shopping list and STICK TO IT! With the exception of a mid-week egg and milk run I try not to deviate from the list and my grocery budget remains low. Initially this would take me about two hours a week, but these days I can knock it out in twenty minutes. I will probably write a much more specific post on this later this week and lay out how I do it and some tips and tricks.
4. Check your Beauty Regime
Let's be honest, lots of us got used to regular Celtic Tiger facials, manicures and pedicures. Perhaps we can't live without our premium cosmetics? Maybe we need a professional colour every six weeks? I'd urge you to really reconsider these options. I used to use Clarins and in a concession I switched to Liz Earle but after things got really hard I switched to plain old coconut oil. I use it as cleanser and moisturizer and my skin has never looked better. Cost? 6 euro per quarter. I kid you not. I have also cut out professional colour and generally only get a hair cut once a year or so. The salon is out, I do my own manicures and pedicures and any other treatments I might need. I have also experimented with making my own products at home with great results. It's really a matter of prioritising here, you can still look good on a budget. What's more important? Your hair now or your finances down the line? It's much easier to gradually cut back than to have to go cold turkey if something unexpected happens down the line.
5. Consider your travel expenses.
Try and cut travel expenses as much as possible. Do you need two cars? Can you cut down daily commuting? Compare the cost of the school bus with the cost of petrol and wear and tear. You might be surprised to find the bus works out much cheaper in the long run. Schedule errands to go around times you will already be in town. If you have to drop a kid to practice, schedule your grocery trips around this so you're not running out more than once. Make sure your tyres are properly inflated, don't carry any excess weight in the car, keep windows closed etc to make sure you get the best mileage you can. Carpool whenever you can.
6. Cut down your reading costs
I'm an avid reader and was spending a fortune on books, so this category made a big difference to us. Do you read the newspaper daily? How much is this costing? Consider getting a digital subscription or the Guardian app (a one off fee for unlimited news.) Consider getting a Kindle. You will still be able to buy books but at a substantial discount, plus you'll have them with you all the time and the environmental impact is much less. You can also subscribe to magazines and newspapers on the Kindle for a very good price. Consider using the library as well. It's free and often has a great selection of movies and music as well. If you can't find the books you need you can always get them ordered in or borrow from other libraries. We are lucky to have a great system here. Another option for bookworms is Book Mooch. You can put your books up and when people request them you get points to use to get other books. It's a great system and has lots of worldwide fans.
7. Monitor your Utility Spends
Have you shopped around for the best plans? Sites like Bonkers.ie and Uchoose.ie can help with this. Do you really need a landline? Most people use their mobile for most everything these days and with most providers offering competitive packages to suit various individual needs. If you make international calls, check options like Rebtel and Skype. Look into the various tv/internet packages as well, as these can work out a lot cheaper than having a landline connection. It's also worth keeping an eye on your electricity usage. Many libraries will lend out a monitor for two weeks so you can see where you are wasting energy. Personally we found fans on the oven or in the bathrooms to absolutely eat electricity and so avoid them as much as possible. Try and hang out clothes instead of using the dryer when possible, teach the kids to turn off lights and appliances when not in use.
8. Shop smart
We've all heard the adage never shop when hungry, this is true. I will add a few to that. Shop when you're in a hurry! You're less likely to be distracted and buy unnecessary items or ones not on your list. Don't take kids with you if at all possible. Not only will the public at large be eternally grateful, but you will be less likely to be tempted by small people's choices. Shop at the discount stores first. Yes, this means Aldi and Lidl. Did you know that may of their products are the same branded products you buy at the mainstream supermarkets? For instance, the flour at Aldi is made by Odlums. It's 1.29 for 2kg. The EXACT SAME flour branded at Tesco will set you back 2.79. No brainer methinks. The same is true of many of their products and when you do 90% of your shop at Aldi or Lidl I dare you to spend over 100e, when a similar trolley at Tesco would easily be double that. Look at the various shop websites each week and check the weekly deals. Sometimes this means going to more than one shop but the money saved can be substantial.
9. Buy bulk when possible
Keep an eye out for products you buy on a regular basis. If they are on sale it's worth stocking up. Also keep an eye out for bigger packaging, sometimes you can save money by buying bigger packages. Note I said sometimes... other times the shop knows you will make such an assumption and actually up charge for bigger packages. Those little snacky cheeses are notorious for this. Always check the per unit price and if it's not listed, whip out your phone and divide the total price by the number of units. Check out the discount shops like Dealz and Cash and Carries that are popping up all over the place. They are generally great for household products and bulk sizing. I was able to get the huge box of Pampers for 12e back in Offaly which actually worked out cheaper than Aldi and Lidl alternatives.
10. Cook from scratch
This may seem like a no brainer, but for many people it can also seem like a non-option Two income families are often very busy and finding the time to cook can be hard indeed. I would suggest looking into options like once-a-month-cooking and freezer cooking. Also look at packing lunches versus eating out. That coffee habit? Invest in a coffee grinder (about 10 euro) buy some beans and grind your own each morning for a cup of brew that will be better than any cafe.
What tips can you guys add? Is there a change you've made that has made a big difference to your spending? I'd love to hear them!