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There’s been some amount of budget analysis over the last week so I don’t think I need to add to it just yet – I’ll let the dust settle a while before wading in with my two cents. Suffice to say that if you’re working full time, you’ve lost out. If you’re not working, you’ve lost out. And that’s about the size of it.
The only people who’s incomes have been spared are the folks getting state pensions – and fair play to them – we all know what they did last time the government tried to take away their benefits. The government backed down then, learned its lesson and didn’t try and take anything from them this time. We could certainly learn a thing or two about protesting successfully from the pensioners.
For everyone else, the Brians are whipping an extra €60 or €80 (or more) per month from the trousers and purses of the nation; so what do you do if taking to the streets isn’t your thing? How do you make it back? You can’t exactly ask your boss for a raise, so it’ll have to come from somewhere else. Already though, most of us have cut down on the luxuries. All those restaurants closing down and the ads on the radio reminding us that the pubs are still there are sure signs that we’re not going out nearly as much as we used to.
Having said that, there are lots of ways to get frugal, and household bills are a great place to start. They make up a huge amount of our monthly expenditure and getting the stuff we need for as little as possible can save a surprising amount. Enough to offset that €60 or €80 every month. So lets take a look at a few of the things we can change that could save a lot.
Gas – save €8 per month
It’s been absolutely arctic and if you’re household is like mine, the gas has been on pretty much non-stop since the cold spell started. And with another freezing spell on the way, most people are worried about their heating bills. The good news in this is that there are a couple of cheaper suppliers than Bord Gais. Flogas and Airtricity are both selling domestic gas now and an average household could save about €8 per month by changing suppliers. Switching gas is as easy as switching electricity and Flogas currently offer the cheapest stand-alone deal.
Electricity – save €10 per month
All right, I know, we’re all sick of hearing about the Big Switch and all that. But the fact is that lest than 40% of households have actually switched, leaving an enormous €100 million in unclaimed savings on the table. Switching will save an average household a tenner a month and it’s better off in our pockets than the ESB’s. Both Airtricity and Bord Gais offer savings of about 13% off ESB unit rates. And if you’re feeling a certain amount of loyalty to the ESB, then consider this: they can’t start competing on price until they have lost 40% of their customers, so they want you to switch too! Even if you have switched, you could still save, especially if you switched more than a year ago.
Electricity again – save another €10 per month
Electricity monitors show you in real time how much electricity your house is using and how much it’s costing you. Flip on the kettle and you can watch the consumption jump. Monitors are wireless and portable, so you can walk around the house and find out how much each of the gadgets and appliances are using and which are the most expensive to run. The makers of electricity monitors reckon that once you’re armed with this knowledge you’ll save 15% off your electricity bills. I believe them. I’ve had one for a year now and my consumption is way down on last year. Owl makes the most popular one and it costs about €40. They also make fantastic Christmas gifts for people with gadget fetishes!
Home communications – save at least €20 per month
If you need a home phone and are paying for line rental, calls, TV and broadband separately, consider bundling them together. UPC has the best bundling deals out there and you can get the whole lot for €60 per month. The only catch is that UPC’s bundles are not available to all households yet, but if you can get it, it’s a very good deal.
Again, if you need a home phone, it’s worth knowing that line rental in Ireland is the most expensive in Europe at €25.36 per month. If you don’t have to pay it, you shouldn’t which is why it’s worth having a look at wireless broadband providers. Most of them have options which include broadband with home phone and include calls. The cheapest is Imagine with a broadband and phone deal that includes off peak calls for just €30 per month. You can even keep your old number. Catch with this one is coverage again. It’s wireless, so it may not work for your house.
Don’t pay for TV – save €30 or more
If you want to do something really subversive, why not consider free-sat for you TV? Most of the channels we watch are actually available for free anyway. The free-to-air satellite boxes that turn up in Lidl and Aldi every now and again cost less than €100 and you can get a version with a recorder for a few euro more. The dish needs to be put up which apparently you can do yourself if you're handy, and that's it. No more monthly TV bill. This alone will save you at least €30. There's always a catch though isn't there? You're not going to get Sky sports on free-sat so this option isn't going to work for sports nuts.
Mobiles – save €15 per month
There are now an unbelievable 8 mobile phone suppliers operating in Ireland. They offer the most confusing array of tariffs and plans ever conceived and are utterly baffling to most mere mortals. However, it’s worth trying to make a little bit of sense of them because you can save lots of money. Here’s an example: a basic bill-pay plan with 175 call minutes and 100 texts can be had for €20 from 3 Mobile. On the other end, it’ll cost €35 from O2 – that’s 75% more expensive. www.callcosts.ie is a good place to start if you want to get a mobile price comparison.
A few more savings in Personal Finance
Despite the condition of the banks, there are still some things that can be done to shave a few euros from your personal finance bills and add a few euros to your savings.
Credit Cards - €24 per month savings
Believe it or not, you can still switch credit cards. There are still banks that are open for business, looking for new customers and offering good deals. Considering that there are 2.27 million personal credit cards in Ireland and the average debt on each one is €1,246 it’s not surprising. So if you’re carrying a balance and have good credit, it’s worth looking at transferring that balance.
Switching to a six month 0% introductory offer could net €141 in savings over six months. A six-month 0% balance transfer is available from Tesco Personal Finance, a ten-month 0% balance transfer is available from One Direct (which is an An Post/MBNA partnership), and a twelve-month 3.9% balance transfer is available from Ulster Bank. So there you go. None of them are Irish regulated banks, but if you can save money on interest it’s worth going for it.
Current Accounts - €8 per month savings
Switching to a no-fee current account could save up to €72 per year. It’s surprisingly easy to switch current accounts and quit paying fees. There are even rules to make the switch as straightforward as possible; the Irish Banking Federation’s Switching Code requires that all direct debits and standing orders must be set up on the new account by the banks on the customer’s behalf. And with some current accounts paying interest, customers could save even more.
Now is not a time to neglect savings, particularly for households with lump sums. Easy access accounts and strong interest rates are still available from responsible institutions with good credit ratings. If you’re concerned about where you have your money, there are a number of non-Irish regulated banks operating in Ireland including RaboDirect, Nationwide UK, Ulster Bank, National Irish Bank and Leeds Building Society.
Of the overseas banks, the best easy access rate is 3% from Nationwide UK, which is worth considering because the government has put up the rate of DIRT on term deposits of more than one year from 25% to 30%. The standard rate of DIRT has gone up by 2% to 27%.
How much will you lose from this budget?
So that’s it! Hopefully some of these will be useful when you’re trying to find a way to offset the budget losses that the Brians have inflicted on you. Now all you need to know is how much you’re actually going to lose.
There are a number of easy ways to find out how much your income is going to fall as a result of the budget. The quickest and easiest is KPMG’s budget calculator. Then there’s the “Annexes to the Summary of 2011 Budget Measures” available from the Department of Finance. These are fairly detailed but worth a look. Both are linked below.