Good Financial Habits
We are a whole 8 weeks into 2020 already. How time flies! For most of us the New Year’s good intentions may have slowly drifted as other things have come to the front of our minds.
I thought I’d put together a little refresher for those of you trying to be better with money. It may also help some others of you to attempt the process of getting your personal finances in shape.
- Start a household budget
There are loads of ways to do this. You can get handy Excel templates and apps online, and we always have that old reliable pen and paper (remember those?) we can turn to.
It’s not important how you do it, but it is very valuable to account for your spending regularly, especially when we’re using those pesky (and too convenient) debit cards.
- makes you more accountable for your own spending
- highlights unnecessary spending
- puts you in control, making you proactive rather than reactive
- makes you think about the concept of opportunity cost, i.e. the consequences of your decision to spend or to save
- keeps you focused on your goals: deposit for a house, paying off debt, saving for a holiday, etc.
- Clean up your accounts
This is something you can do while creating your household budget. Review your direct debits – cancel any unnecessary ones. You’d be surprised of what you may save. Move other debits to after payday, so you can avoid missed payment fees and that added stress.
Set up a monthly standing order to a savings account to come out a couple of days after payday, but make sure it’s an amount that you can easily do without. Make your savings harder to reach by using an alternative bank or a credit union account. AVOID SETTING UP ONLINE BANKING so you will have to physically walk in to access your cash. It’s amazing how helpful a little inconvenience can be in building up your savings.
- Switch & save
You can literally save hundreds by switching your utilities. I know it can be a bother, but it is certainly worth it. There are now specialist services that will do the switching for you, which really takes the hassle out of it.
Go to a broker to:
- get better value car/home insurance.
- review your life insurance and mortgage protection costs. Given up smoking? You could apply for cheaper non-smoker rates. We will gladly help with this one.
- switch your mortgage – It’s a great time to switch and save with rates now as low as 2.25%*. We can help with this one too!
You can also save money by switching your bank accounts and credit cards.
- Other steps you can take;
- rent out your spare room and earn up to €14,000 per annum tax free!
- coffee, coffee, coffee! Reduce your spend on take away coffees
- bring in a homemade lunch more often
- take your credit cards out of your wallet/purse
- give up smoking!
- do you really need that new car? If so, look at going electric
- as your salary increases, increase your savings
I am keenly aware that life in Ireland today can be hectic at the best of times and you can always find more interesting things to do that reviewing your bank accounts or switching your electricity provider, but if you do not make the time to review your finances, you will almost certainly be wasting money unnecessarily, money that could be better spent on the things that really matter in your life.
*KBC Bank 2 Year Fixed Rate 60% Loan to Value or lower as at 17/02/2020