Value for Money

Linda Higgins, Consumer Affairs Editor - January 26th, 2005

IT'S that time of year... many of us are down in the dumps, fed up with the cold weather and
short days, and still in shock over the size of the bills coming in after Christmas.

   Many well-intentioned resolutions for 2005 are already falling by the wayside, and vows of
joining the gym or going on a diet have already been forgotten.  

   Meanwhile, there are numerous bills demanding your attention, while your latest bank
statement leaves you reeling in shock.          

   This is a month when you should take stock of your situation, and that includes a careful
spring clean of your finances. 

   You might be astounded to realise just how many easy money-saving tips you can adapt to
your lifestyle - hopefully saving a small fortune in the process.

   If you've previously had a head-in-the-sand approach to your spending, then now is the time
to make amends.         

   Read on for some imaginative and simple ideas that can help save you time, energy - and,
most importantly, money. 

   Many of us are guilty of frittering away our money on silly things. It's known as the
'Latte Factor' - the syndrome where we blind ourselves to what we spend on little indulgences,
and then wonder where our wages are disappearing to.  

   The term was created by American financial expert, David Bach, author of The Automatic
Millionaire, and it refers to the habit of splashing out on a takeaway coffee once per
working day. At an average of  €2.50 for a medium brew, coffee addicts can easily spend  €600
per working year on their caffeine fix.        

   What are the other little sundries that are helping to drain your bank account regularly?
Do you spend a small fortune on ready-made sandwiches, or after-work drinks twice a week? Do
you have an addiction to glossy magazines? Perhaps it's time to take a closer look at your
daily outgoings.      

   Samantha Downes, editor of The Virgin Money Guide, says that this 'lifestyle' money pit is
one of the biggest we deep for ourselves.                      

    "A life of fast food, eating out and dumping your clothes at the the dry cleaner, or
getting your shirts ironed there - these are all big money eaters," she points out. Her
advice, for a start, is to stay in a couple of nights a week, and re-discover your
supermarket.

   One common expense is convenience foods. Ready meals are a handy option at the end of a
long working day, but far more costly than cooking from scratch. One UK figure shows that for
every £1 spent on food in Great Britain, around 30p goes on crisps, snacks, frozen pizzas and
the like. It's a rather sad indictment of our current lifestyles.  

   Apart from the obvious expenditures that you're aware of, make sure that you're not
overpaying in other areas.

   For example, are you unwittingly paying too much tax? According to new figures, 17.4pc of
taxpayers applied to the Revenue Commissioners for a balancing statement on their tax
liability for the year 2003. Of those who applied, 75pc received a refund - with the average
payment amounting to €1,400. The total refund bill was €306 million. Make sure that you're
claiming for all you're entitled to, from medical bills to relief on refuse charges. Check
www.revenue.ie for more information, or contact your local tax office.    

    Diarmuid MacShane is the founder of consumer website Value Ireland, whose slogan is 'Better
Purchasing Decisions Through Better Information.'

    "We've all successfully negotiated our way through the New Year period, and have committed
to our resolutions for the coming months, "  he says. "It's more than likely that at least one
of the resolutions revolves around having more money, or not wasting so much money, or simply
saving more for a special occasion, or that rainy day. "   

    "Value Ireland has devised some useful tips for you to help you plan what you can do to
meet these financial new year resolutions. Following some, or all, of these tips will help you
save money, avoid the dreaded 'Rip-Off Ireland', and hopefully give you a little more to
spare..."   

   Mr MacShane invites Evening Herald readers to log on to www.valueireland.com in order to
access information, and share tips and opinions on the forum. 

   Read on for 50 Top Tips to get you started. Some are easy to implement, while others may
require a bit of time and effort. However, they're all worth the investment.

   After all, becoming more financially aware will certainly benefit both your current
lifestyle and your future security.   

TOP TIPS

GENERAL FINANCIAL ADVICE   

1)  REVIEW your mortgage. If you're in your existing mortgage for a period of time, shop
    around to see what offers currently exist on the market. Rates haven't changed enormously,
    but there are deals available from various banks and building societies. Ring around, or
    search online, and work out if you could be better off. Remember to ask what extra a new
    provider can do for you if you were to move to their mortgage package i.e. with regards
    to fees, penalties etc.) If you find a better offer, ask your existing lender if they're
    willing to do anything for you in order to keep your business.+

2)  CHANGE your bank account. Competition is finally starting to hot up in the banking sector,
    so watch out for new offers and deals. If you like it, then switch. Changing bank accounts
    is not as difficult as banks would like us to think.+          

3)  REVISIT your credit card needs. Obviously, having a credit card at all, and paying credit
    card interest rates isn't very wallet-friendly, so your first aim should be to get rid of
    it, if possible. However, with the provision of a new relief that effectively removes the
    double charging of Government stamp duty on changing credit cards in the last budget, it's
    now more viable to shop around and change credit cards. Look out for companies offering
    low rates of interest for credit transfers.+

4)  REVIEW all bills. Take a month's set of bills and make sure that you still require
    everything that you're paying for. You may have requested a service that you no longer
    require, or are paying for insurance on an item that you no longer have, or that isn't
    valued as highly as it once was. Ring each company and ask if they've any way of either
    reducing your bill through discounts, or a cheaper ways of paying the bills - some
    companies provide discounts for paying by direct debit.+         

5)  CHECK all bills. Since May 2004, 12 major Irish companies - plus the Government - have
    admitted to overcharging a total of 967,500 Irish consumers - to the tune of ö84
    million. In a Value Ireland survey, 42pc of respondents admitted that they didn't check
    every bill before paying. Ensure that only items you expect are included.+ 

6)  SHOP around. As simple as it sounds, shopping around can be one of the best ways of saving
    money. Being aware of as many alternatives as possible when making a purchase allows you
    to make an informed decision. Always research before buying.+ 

7)  ALWAYS have a budget. Keep in mind how much something is worth to you. Know the price
    before buying. If you find it's more than you budgeted for, just say 'no thanks.' Don't
    feel pressurised - just because you're at the counter doesn't mean that you have to buy.

8)  DON'T automatically renew any insurance policy without checking around first for
    alternatives and better deals. For tips on purchasing car, home, and travel insurance,
    visit www.valueireland.com. (Click Here for Tips from Value Ireland)

9)  SELL, sell, sell! Take inspiration from the current TV programmes where people make money
    from old or unwanted items in their homes. Use simple options such as car boot sales and
    local auctions, or internet auction sites such as eBid and  eBbay.+      

10) MAKE sure that you buy assets rather than liabilities with your hard-earned money. You
    need food, clothes and shelter, but if you want to create wealth, you don't want to pay
    rent, interest, or buy things who value decreases (new cars, for example). Buy assets!*

GROCERY SHOPPING                    

11) MAKE use of the website www.shoppingbill.com - which has plenty of interesting
    insights on supermarkets. Check it weekly for the best special offers available at
    Superquinn, Dunnes Stores, Tesco, SuperValu, Lidl and Aldi. Save money, particularly on
    meat, wine and household items by knowing what's on offer before you shop.*

12) BUY basics in basic shops. Visit Aldi, Lidl or your local market once a week - then top up
    at a big supermarket where temptation is too much.*

13) BE flexible. Always buy 'Half Price' or 'Buy One, Get One Free' offers.* 

14) BE brand disloyal. You don't have well-known (expensive) brands just because everyone else
   does! Why would you want to foot the bill for the advertising? For example, milk is milk -
   ö1.19 for two litres is the most you should be paying, and it freezes; butter is butter;
   bananas are bananas, and remember - you 'learned' to like certain beers, lagers, wines and
   coffees. The first time you ever tried them, you hated them. So maybe now is a good time to
   'learn' to enjoy other brands.* 

15) PAY with cash - it feels very different from using cards or cheques.*     

16) BUY items that are reduced because they're near their sell-by date - and freeze them.*

17) BE wary of loyalty cards. They're designed for the benefit of the store - not you! Be
    promiscuous - make the store loyal to you.*  

18) MAKE a list, and stick to these items only. Shopping online cuts out impulse buys. Don't
    automatically throw out vouchers posted in the door - they may save you money on items
    that you buy anyhow.+

19) BUY a water filter jug instead of bottled water.+

20) ALWAYS bring your reusable bags, so you don't end up forking out extra for packing your
    groceries.

ENERGY-SAVING & ENVIRONMENTALLY FRIENDLY TIPS

21) REDUCE, reuse and recycle. Visit www.raceagainstwaste.ie for practical advice.

22) SWITCH off all appliances at the wall before going to bed. Many electrical items use
    electricity even while switched off.

23) VISIT www.esb.ie to find out how you can cut down both on bills and electricity use,
    including information on energy efficient lighting.

24) TUMBLE drying is very expensive. Line drying is free. Or invest in an old-fashioned
    clothes horse.

25) IF you've your heating or immersion on a timer, try switching it on and off by hand as
    needed instead. This uses far less fuel/energy. Turn your thermostat down a few degrees.

26) TRY to get your name off lists for junk mail.

27) SAVE water by showering instead of bathing. A house brick placed in the toilet cistern
    reduces the amount of water used each flush.     

28) TOO much ice in the freezer means less efficiency, so defrost regularly. Keep it filled.

29) DO you really need a cupboard full of expensive - and environmentally unfriendly -
    cleaning products? Check out the alternatives. Own brands are cheaper than named ones, and
    do the same job. Instead of using pricey cream cleaners, try a teaspoon of bicarbonate of
    soda on a damp cloth. Use vinegar to clean windows and mirrors - fill an old spray bottle
    with a solution of half-vinegar, half-water.

30) WHEN buying appliances, choose brands with the most energy-efficient ratings.

PERSONAL EXPENDITURE    

31) DO you purchase glossy magazines each week? Do you really need them? You can read plenty
    of celebrity gossip and features online, for a start. If you've a friend who also loves
    magazines, then why not agree to buy one monthly title each - then swap?

32) MAKE full use of your local library, where you can rent the latest bestsellers for free,
    access the internet. Check out second-hand bookshops. Similarly, rent DVDs and games
    before buying them.           

33) IF your house is overcrowded with books, then sell some - or donate them to a charity
    shop.          

34) GO through your wardrobe and clear-out items that don't fit, or you don't like. Donate
    them to charity. Or the latest trend in America is to host 'swapshop' parties with a group
    of friends, where each person brings along a few unwanted items of clothing.

35) MEN with short hairstyles can save themselves barber fees by investing in a hair clippers.

36) REVIEW your mobile phone, landline and internet usage. Consider changing providers if you
    can get a better deal.   

37) SIGN up for phone or internet banking. It makes managing your bills easier, and saves
    time.  

38) PAY your credit bill on time in order to avoid penalties.

39) INSTEAD of taking out expensive gym membership, rope in a friend and go for long walks,
    runs or cycles, or swim in your local pool. 

40) SET up a change jar, and regularly empty coins into it. It's amazing how quickly it builds
    up.

SAVINGS & INVESTMENTS    

41) MAXIMISE your SSIA contributions between now and when it matures. Your minimum return is 
    25pc.+

42) MAKE your savings work harder. If you've money put away, is it earning the best interest
    possible?+

43) MAKE your savings untouchable. If you've a tendency to raid your rainy day money, then
    put it in a term, or notice, account, where you can't gain immediate access.+    

44) FOLLOW the Value Ireland savings plan. This keeps track of your outgoings - particularly
    your wasteful outgoings. The plan forces you to match in savings any money you've wasted -
    the double whammy will encourage you not to wast money in future.+ 

45) PAY off your mortgage in 20 years, if possible - you'll save thousands.

46) IF you haven't already, then start saving for your pension. 

47) DON'T invest in anything high-risk unless you can afford to lose the money.    

48) ALWAYS read the small print to see if you're being charged fees or commission. 

49) DON'T take the first financial product on offer. Compare rates. The Irish Financial
    Services Regulatory Authority (www.ifsra.ie) publishes reports on different products.

50) FINALLY, once you're in control of your money, reward yourself with the occasional
    indulgence!

USEFUL RESOURCES:       

+ All tips marked with a plus are courtesy of Diarmuid from www.valueireland.com

* All tips marked with an asterisk are courtesy of Bill from www.shoppingbill.com
 

Another site that encourages Irish consumers to swap tips and advice in their busy forums is
  www.askaboutmoney.com
 

Work out your personal budget with MABS (Money Advice & Budgeting Service). Visit
  www.mabs.ie or your local branch for advice on dealing with debt.