Sinead Ryan: ‘Make sorting out your fraught finances the top resolution for this year’
Now is the time for New Year resolutions, and what better one to make than to do things a little bit differently so that 2019 isn’t as financially fraught as 2018? There are some really small changes that will make a big difference.
Firstly, know you’re not alone. New research from Switcher.ie reveals that 95pc of people worry about their finances, with one in four expecting to be worse off in 2019. People worry about not being able to save, meet unexpected expenses or afford a holiday. Thankfully, with the economy almost at full employment, job loss won’t be a worry for as many, but of course, shorter hours or pay cuts are a possibility for some. So, what can you do?
1. Tie in financials to New Year resolutions. Many of us choose this time to give up booze or fags. Why not put away the money you would have spent and save on the double? A 20-a-day smoking habit adds up to around €4,380 a year. Cutting back on just three drinks a week will save €780.
2. Every household needs a rainy day fund in case of emergencies. Your credit card should not be it. Set up a deposit account (it’s free) to run alongside your current account. Download your bank’s app and name it “emergencies” so you’re not tempted to dip into it. Drop in what you can, when you can, but do it on the day you are paid, not when you have ‘spare’ money, because nobody ever does. Even €50 is the start of a better habit.
3. Clear out your wardrobe, shed, attic etc. We all have items we don’t need, even Christmas gifts or dodgy sale ‘bargains’. You have a few options: firstly, recycle those you can for regifting during the year. Then, consider selling on eBay or DoneDeal anything which could fetch you money (jewellery, bicycles, laptops, toys and furniture are popular). You’d be astonished what people will buy.
4. Make 2019 your year to switch providers of everything from insurance to utilities. Look at a monthly bank statement and highlight with a marker everything on direct debit. Do you know what it’s for, and why you bought it? Can you do better elsewhere, or do you need it at all?
5. Draw up a budget. This may sound boring, but it is enlightening. Knowing exactly what you spend is important, especially when it’s so easy to ‘tap’ your card to pay for things. Many banks have budgeting tools in their app – AIB’s is particularly good, so keep an eye on where your money is going.
6. List debts, in order, from the highest interest rate down. This will usually be your credit card, followed by personal loans, credit union loans, car loans and mortgage. Clearing the most expensive is your priority. Then the freed up repayments can go on to the next.
7. Get help. Most of us are useless when it comes to understanding financial products like loans, and credit providers rely on it. Organisations like MABS exist exactly for that reason and are fantastic. Give them a call on 0761 07 2000.