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Independent

Small changes mean big savings for households

WE are heading for five years now since the economy was knocked sideways -- and it is not getting any easier for householders.

Job losses, tax changes and pay reductions are putting a massive squeeze on household budgets.

Here are some ways to cope.

Credit cards

Almost half of those polled say they don't own a credit card, but there is little sign that we are getting on top of our national credit card debt mountain.

The average debt on a credit card is around €1,300.

With nearly two million credit cards in our wallets, it means we are coughing up around €260 a year to banks in credit card interest alone.

Paying the minimum every month is not the answer. With interest rates of 22.7pc, wiping out the average card debt will take up to three years if you only pay off €50 a month.

Of course, consumers need to prioritise paying bills. But you could reduce the time it takes to pay off your credit card by by upping your repayments to €100 a month.

Current accounts

The requirements for free banking range from doing multiple online transactions, to keeping a minimum balance of €3,000 at all times.

This is why the standard current account customer is forking out around €86 per year in fees and charges.

Here are some ways to keep down the cost of banking:

Do as many transactions as you can online, as these are cheaper than branch-based transactions.

Do not write cheques. With stamp duty of 50c imposed on each cheque and bank charges of 30c, it can cost €40 a year if you write just one cheque a week.

Avoid an unauthorised overdraft as the charges are horrendous if you go into the red without permission.

Shopping

Food and other groceries are pricey. The average Irish family spends around €10,000 a year in supermarkets.

But up to a third of the food we buy gets thrown out -- so shop carefully.

Make lists and then stick to them and resist buying stuff that you don't need.

Show no loyalty to supermarkets. You could also switch to own-brand.

Some experts believe families could save €2,000 a year by being smarter with their shop.

Energy

We all know that if you switch, the chances are that you will save. But you will only save for a while.

That is because most introductory discounts last for just one year.

ESB/Electric Ireland and Bord Gais limit their discount to one year. Airtricity has begun lately to offer two-year deals, but the discounts diminish in year two, according to Simon Moynihan of comparison site Bonkers.ie.

Savings up to €150 a year are still possible from switching, Mr Moynihan said.

The key thing is to check out with your current supplier what deal you are on, if it has expired yet, and whether you can switch.

Life policies

The cost of both life insurance and mortgage protection policies have come down dramatically in the past few years.

This is because we are living longer and insurance companies expect to receive premiums over a longer period. Secondly, the insurance companies have never needed life insurance premiums so much as other products like pensions fail to sell, according to Enda Brady of Sligo-based iQ Financial.

Switching to another provider, or updating your policy, can mean savings of up to €9,000 over the lifetime of a term life insurance product, according to the National Consumer Agency.

Getting a cheaper mortgage protection policy could save you €6,000 over the life of the policy.

Mobile phones

There are some cracking deals out there at the moment, especially for those who prepay for their mobile service.

So if you are on a high-cost contract it might be worth ditching it and considering some of the deals on offer.

The best value package for a heavy mobile phone data user, according to the Askaboutmoney.com website, is the €20-a-month deal from 3 Mobile.

For light mobile usage, 48 has a 30-day for €30. This is the best value package if you do not need data, if you only use your phone for domestic calls and texts, according to Askaboutmoney.

Motoring

You could save yourself almost €900 a year by driving a more economical car, according to Bob Quinn of Moneyadviser.ie. The savings could pay for your road tax and insurance.

Or you could always take the bus. Another option to cut driving costs is by car-pooling or car-sharing.

To find out about any car pools/shares near you, log on to swiftcommute.ie.

Save on insurance

You can get a discount on your insurance bill by getting your home and motor insurance from the same provider. Other ways to save are to accept a higher excess -- the amount you have to pay before you can make a claim.

Claim tax reliefs

Tax relief is available for most medical expenses. Download form Med 1 from the Revenue website. You will get back 20pc of your expenses, as long as you have not already been reimbursed by an insurer.

Haggle

Saving money while spending is one of the most potent of shopping pleasures. But it seems the rich do it better than the rest of us.

A report in Britain has found that the well-off are more likely to haggle over prices and take up on special discount offers. So, simply ask for a discount.

- Charlie Weston PERSONAL FINANCE EDITOR

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