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Tip the Balance – Keep an eye out for small print

News of the World, January 25th, 2009

Diarmuid MacShane

The Trouble with Saving Money

A recent Financial Regulator survey told us that two thirds of us     were going to make changes to our personal finances as we enter 2009. Even without the difficult times the country is facing into now, one of our most popular New Year resolutions has always been to spend less and save more.

So, this year if you’re going all out to cut your costs and save a bundle, you’ll be keeping your eyes open for the best offers and deals on everything from food to phone bills. But are all special offers the great bargains they seem, or could we go too far and end up spending more than we’re trying to save? Here are a few things to watch out for:

Thinking of changing your television or phone package or your insurance coverage? The headline figures suck you in, but make sure you check the sneaky small print before changing.

Speaking of small print, find out the costs when introductory period ends – particularly with 0% credit card offers. When your 6 months free are over, you could be hit with a higher rate than you’re paying now.

If you’re changing service providers – phone, television, broadband, banks, etc., make sure you’re getting exactly the same as you had before. Are you getting the same service and benefits from the new company at the lower price – particularly when it comes to insurance? If the lower price seems to good to be true, it just might be!

Sometimes you might want to cancel a contract early because you want to change to someone else because they’re cheaper. You should check to see if there are contract cancellation penalties. Mobile and broadband companies will probably make you pay out the rest of the year before you can leave. NTL will even charge you €10 if you downgrade your service, even though you’re staying as a customer.

Many people will switch credit cards to one with a 0% introductory rate. You should remember that by default you’ll end up paying the ridiculous government credit card tax twice. You’ll be charged once when you close your old card, and once again on the new card – €30 too much tax for you to pay. Get a “letter of closure” from your old provider and send it to your new one to let them know that you’ve already paid the tax for the current year.

Retailers will put up big flashy sale signs to try to get us into their shops – making us think that we’re going to save some money. January sales are normally only held to get rid of the stuff nobody wanted before Christmas, so make sure that you check that what you’re buying is actually on sale. Don’t be afraid to ask if you have to.

You should always be careful not to assume that just because an item marked as “on sale” in one shop, that it can’t be bought cheaper somewhere else. You should always shop around to confirm the item isn’t cheap somewhere else.

A popular trick by retailers, supermarkets in particular, is to offer 2 for 1 and multi-pack offers. Remember though – just because something is on sale, it doesn’t mean you have to buy it. Surveys tell us that 30% of grocery purchases are eventually just dumped. Do you actually need the items? Do you really need 2 for 1 or 3 for 2?

Finally, it’s important to remember that saving money by buying cheap doesn’t always mean you’re getting value for money. It could cost you even more in the long run – particularly when buying bigger items like clothes, electronics, furniture etc.

This was my first lead article published in my new column in last Sundays Irish News of the World.

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