WELCOME TO SMARTER Spending. Over the coming weeks, we’ll be sharing expert advice and real-life experiences, giving you the tools to spend more mindfully and get more from your euro.
“Around two weeks before I’m out of contract with any provider, I’ll start shopping around for a new deal.”
Dublin-based mum Ellie Kistnen has made many financial changes over the years to get her to a place where she’s debt-free and in control of her monthly spending. One habit that’s helped her keep her outgoings as low as they can be is a proactive approach to her fixed monthly bills:
“I realised that searching for the best prices for things like electricity and refuse charges each year was one way I could cut my spending without affecting my quality of life.”
She gives a couple of recent examples:
I swapped utilities provider in January and got a 44% welcome discount for the year. I was also able to get €10 a month off another bill by calling up the provider and asking if they were able to do me a better deal. All of those things mean less is coming out of my account each month, and they only took five minutes each.
Ellie’s suggestions are timely, given the significant spike in the cost of living here in Ireland in recent months. Ireland’s Consumer Price Index for December 2021 showed a 5.7% annual increase in prices versus 12 months previous – the largest annual increase in prices since 2001.
Brexit supply chain issues, post-pandemic price hikes, climate change and – most recently – severe political instability in Europe have all combined to a rise in how much we’re spending on everything from groceries to utilities.
If you’re aiming to keep your bills as low as possible right now, where’s the best place to start? Morgan O’Connell, a financial coach and the founder of Arrow Coaching, shares his expert take…
1. Get familiar with your incomings and outgoings
Before you set out any financial goals, get clear on what your current situation is: what’s coming into your account each month, and what’s going out. You can do this with a spreadsheet or keep it simple with a pen and paper, but your aim should be the same either way, says Morgan:
You want to end up with an itemised list of what you’re spending on average each month across all categories and where money is dribbling out of your account without you noticing. Food, utilities, entertainment, transport, education, loans, childcare – it should all go on the list.
Putting this list together will take a bit of “grunt work” but it’s an essential step in seeing where exactly you can make savings. “Having all of this information allows you to take stock, and gives you ultimate clarity to make financial decisions down the line.”
2. Don’t just shop around for one service – do it for them all
“As soon as a contract is up for any service, alarm bells should start ringing,” says Morgan. He suggests making a note of what you’re in contract for – your mobile phone, your insurance premium, your electricity provider, and so on – and also noting when those contracts end.
That way, you can do your research ahead of time and make the smartest choice for you and your situation. “All the information you need about monthly fees, prices per unit and all of that is out there and readily available, so it’s up to you to seek it out,” he adds.
3. Be realistic about the time that you need
As Ellie Kistner notes, switching service providers only takes five minutes, but the switch is just one small segment of a larger task. Don’t forget about the research and prep time, says Morgan:
I find that shopping around is a task some people half do, and then end up not seeing through to completion. I’d recommend setting out an hour or two per bill. Within that time, gather all the information, make a decision on whether to switch or stay, and take action on that decision.
That way, he says, “you can tick the job off your list in full, and it’s something you don’t have to think about until next year.”
4. And give your bank statements some attention too
Getting up close and personal with your bank statements is another way to stay on track with your monthly outgoings, says Morgan. He recommends casting an eye over your online statements every few days, with a few goals in mind:
One, you want to educate yourself about your day-to-day spending patterns. Two, you should be keeping an eye out for any strange transactions or payments that are higher than usual. And three, you’re taking stock of subscriptions and other fixed payments, and asking yourself, ‘Do I really need this?’ If the answer is ‘no,’ then take action.
Your overall aim, says Morgan, should be to “control the things you can control. If you’re feeling squeezed at the moment, look at what you’re spending, and the areas you can make changes, and go from there.”
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