Liv­ing costs now at Celtic Tiger lev­els

In­creased tax bur­den sees fam­i­lies pay­ing more for ser­vices

Sunday Independent (Ireland) - - Front Page - Wayne O’Con­nor

THE cost of liv­ing has re­turned to Celtic Tiger lev­els de­spite house­holds see­ing only marginal in­come gains in the last 10 years.

A lead­ing econ­o­mist has warned of a heavy tax bur­den on the squeezed mid­dle — with the in­come tax take in­creas­ing by more than 72pc since the boom.

A Sun­day In­de­pen­dent anal­y­sis of Cen­tral Sta­tis­tics Of­fice (CSO) fig­ures shows con­sumers are mak­ing sig­nif­i­cant sav­ings on gro­cery and cloth­ing bills — but these are wiped out by the ris­ing cost of in­sur­ance and house­hold spend­ing. Steady price growth, de­spite low in­fla­tion, means the cost of liv­ing is now on a par with the year-long pe­riod be­fore the Celtic Tiger ended. Low wage growth since 2008 makes this harder for fam­i­lies to cope and ex­plains why many are not ex­pe­ri­enc­ing a re­cov­ery.

“For a decade there has been very lit­tle in the way of wage growth. Over that pe­riod the per­sonal tax bur­den has in­creased dra­mat­i­cally,” says econ­o­mist Jim Power. “Back in 2006 we had roughly the same num­ber of peo­ple work­ing in the econ­omy as we had in 2018. How­ever, back in 2006 they paid €12.4bn in in­come tax, 27.2pc of the to­tal tax take.

“In 2018, roughly the same num­ber of peo­ple work­ing paid €21.4bn in in­come tax and ac­counted for 38.2pc of the to­tal tax take.” An anal­y­sis of CSO fig­ures shows house­hold in­sur­ance costs have dou­bled, with rises in health bills, elec­tric­ity and fuel spend­ing eat­ing up fam­ily in­comes.

SAV­INGS made on gro­ceries are be­ing wiped out by house­hold bills and in­come tax pres­sures on work­ing fam­i­lies since the col­lapse of the Celtic Tiger, a Sun­day In­de­pen­dent anal­y­sis of Cen­tral Statis­tic Of­fice (CSO) fig­ures shows.

It comes as a lead­ing econ­o­mist said Ire­land’s work­force was be­ing loaded with an in­creased tax bur­den and higher liv­ing costs.

Econ­o­mist Jim Power said the over­all in­come tax take from the work­force has in­creased 72.6pc since the boom.

Weekly gro­cery bills were 13.9pc lower last year when com­pared with 2008. But CSO data shows fam­i­lies are spend­ing more on house­hold charges, in­sur­ance, elec­tric­ity and gas — wip­ing out any gains made over the past 10 years.

De­spite low price in­fla­tion since 2008, the cost of es­sen­tial items have slowly crept up to and even sur­passed boom­time lev­els. The cost of liv­ing is now on a par with 10 years ago, prevent­ing work­ing fam­i­lies feel­ing any gains made dur­ing the eco­nomic re­cov­ery.

Econ­o­mist Jim Power said the squeezed mid­dle was feel­ing the brunt of these in­creases. “For a decade there has been very lit­tle in the way of wage growth. Over that pe­riod the per­sonal tax bur­den has in­creased dra­mat­i­cally,” he told the Sun­day In­de­pen­dent.

“Back in 2006 we had roughly the same num­ber of peo­ple work­ing in the econ­omy as we had in 2018. How­ever, back in 2006 they paid €12.4bn in in­come tax, 27.2pc of the to­tal tax take. In 2018, roughly the same num­ber of peo­ple work­ing paid €21.4bn in in­come tax and ac­counted for 38.2pc of the to­tal tax take.”

In the past 10 years, hourly pay across the work­force in­creased by just €1.40.

A Sun­day In­de­pen­dent anal­y­sis of Cen­tral Statis­tic Of­fice fig­ures shows de­spite low in­fla­tion rates the cost of liv­ing has crept back up to match ‘end of boom’ lev­els.

As well as sav­ings on food shop­ping, the fig­ures show sig­nif­i­cant re­duc­tions in prices charged by high-street re­tail­ers. Cloth­ing and footwear prices are down 54.6pc in the past decade.

How­ever, in­creased en­ergy bills, trans­port costs, in­sur­ance and other house­hold ex­pen­di­ture have pre­vented con­sumers feel­ing the ben­e­fits of the eco­nomic re­cov­ery.

“Any price sav­ings peo­ple make are be­ing eaten up in other ar­eas and if you look at the growth in the mar­ket share of Aldi and Lidl, more con­sumers are be­ing pushed to­wards seek­ing cheaper op­tions where they can,” Mr Power said.

Ris­ing in­sur­ance costs were a huge fi­nan­cial bur­den.

On av­er­age, in­sur­ance costs in the year to last Novem­ber were dou­ble those for the cor­re­spond­ing pe­riod in 2008, just as the Celtic Tiger boom was end­ing. The CSO Con­sumer Price In­dex shows house in­sur­ance has in­creased 54.9pc dur­ing this pe­riod.

Car in­sur­ance has in­creased 56.2pc. Health in­sur­ance is where the big­gest in­creases have been felt — up 141.3pc in the 12 months to last Novem­ber com­pared with the same pe­riod in 2008.

“This anal­y­sis shows tack­ling the claims cul­ture here is ab­so­lutely es­sen­tial if you want to get your in­sur­ance costs down,” said Mr Power.

“Peo­ple who are mak­ing spu­ri­ous claims for all sorts of in­juries are ba­si­cally steal­ing money from peo­ple’s pock­ets.”

Other do­mes­tic charges are also hit­ting con­sumers hard.

Elec­tric­ity prices were up 30.9pc now com­pared to 2008, with gas prices up by more than a fifth (20.9pc).

Even mod­est sav­ings, such as a 3.5pc de­crease in the cost of home heat­ing oil, was be­ing off­set by a rise in the cost of solid fu­els. Coal, bri­quettes, fire­lighters and sim­i­lar prod­ucts are 21.6pc more ex­pen­sive now.

Other fuel costs were also up, with petrol cost­ing 17.8pc more and diesel up 4.8pc.

This feeds in to an in­crease in other trans­port costs.

Bus fares are up 59pc and pas­sen­ger jour­neys by train cost 38.5pc more in the past 12 months com­pared with the year be­fore the fi­nan­cial crash.

Cur­rent health costs are also more ex­pen­sive.

The anal­y­sis of CSO data shows vis­its to a GP surgery is 9.5pc more ex­pen­sive now.

Hos­pi­tal ser­vices are up 25.8pc.

Mean­while, den­tal ser­vices are 18.3pc higher.

The cost of send­ing a child to third level is now 84.6pc higher. It is 26.4pc more ex­pen­sive to have a child in sec­ondary school.

Par­ents whose chil­dren are not of school-go­ing age have also faced in­creased costs.

Child­care costs 13pc more last year com­pared with 2008.

Treats also cost more now. A meal in a restau­rant is 20.3pc more ex­pen­sive. A mea­sure or spir­its costs 15.3pc more. A bot­tle or pint of beer costs 13.8pc more now, while the cost of a glass of wine rose 11.1pc last year.

“From a con­sumer’s per­spec­tive it is a good time to be buy­ing items like clothes and food, whereas, on the other side of the coin we are all be­ing eaten up by in­sur­ances costs and other bills that are ris­ing very strongly,” said Mr Power.

“There has been a mas­sive in­crease on the bur­den of in­come tax over that decade.

“If you com­bine that with the lack of wage growth and su­per­im­pose on top of that the mas­sive es­ca­la­tion we have seen in the price of stuff like in­sur­ance you can see why we have a squeezed mid­dle out there.”

Money Doc­tor John Lowe gives 100 prac­ti­cal tips for tack­ling your fi­nances,

FI­NAN­CIAL

1

Plan a yearly house­hold bud­get — add all your yearly house­hold bills and di­vide by 12. That fig­ure is the amount you need to put away each month to meet those bills just to run your home. Any cap­i­tal or lux­ury spend­ing must be found out­side of this an­nual bud­get.

You could also adopt a monthly bud­get if pre­ferred, but you should put at least two hours ev­ery month into plan­ning your fi­nances to en­sure you are on track with your spend­ing. Re­mem­ber, if your ex­pen­di­ture ex­ceeds in­come, you have two choices — earn more or cut costs. You should in any event query EV­ERY item of ex­pen­di­ture — ask your­self if you need it and is there a bet­ter or cheaper al­ter­na­tive? If you are frit­ter­ing money away, down­load the free Money Doc­tor app to help track and con­trol your spend­ing. 2 Think smart with your sur­plus cash — do not leave sur­plus money in your cur­rent ac­count or low in­ter­est-bear­ing ac­counts. At least trans­fer it into your bank’s best de­posit ac­count and when you need funds to meet com­mit­ments, trans­fer over a cou­ple of days be­fore due. If that de­posit ac­count is size­able, ne­go­ti­ate with your bank. If their rates are much less than, for ex­am­ple, KBC Bank (0.3pc — the best rate on de­mand up to €100,000 at time of go­ing to press) they may have the dis­cre­tion to in­crease that de­posit rate in or­der to hold on to your busi­ness. 3 Check your bank charges reg­u­larly and cut down on your bank bills — there are too many cases of over­charg­ing from all the banks to ac­cept that your bank is not one of them. Some­times, these charges can be waived at the dis­cre­tion of the man­ager — if you don’t ask, there’ll be no waiv­ing. Try and avoid ex­ceed­ing your over­draft per­mis­sion if you have an over­draft. The sur­charges and fees are puni­tive. You should also op­er­ate on­line bank ac­counts due to bet­ter deals, the fact they’re eas­ier to op­er­ate, there’s no wait­ing in queues and you save on time and travel ex­pense. Check out An Post’s Smart Ac­count, Bil­lPay, or my­bills.ie for cur­rent ac­count com­par­isons, log on to ccpc.ie/ cur­rentac­counts or­bonkers.ie 4 Check your mort­gage and loan in­ter­est rates

— some­times we go to great lengths at the ini­tial stages of ob­tain­ing a mort­gage or loan try­ing to en­sure the most com­pet­i­tive in­ter­est rate at the time. Once taken out, there is a ten­dency to over­look the main­te­nance of that loan. You could very eas­ily find out that your lender’s orig­i­nal rate or cur­rent ad­ver­tised in­ter­est rate bears no re­sem­blance to your own. This is also a time to check if, cur­rently on a vari­able rate, you should go fixed, and, if your lender is un­com­pet­i­tive, to see whether you should switch to an­other. 5 Avail of your an­nual Cap­i­tal Gains Tax (CGT) ex­emp­tions — the first €1,270 of charge­able gains to an in­di­vid­ual aris­ing from the dis­posal of a cap­i­tal as­set (eg, shares) is ex­empt. This is al­low­able for each tax year, but is not trans­fer­able be­tween spouses. The rate payable on CGT is 33pc over the thresh­old. For Cap­i­tal Ac­qui­si­tion Taxes (CAT), re­mem­ber the thresh­old from par­ent to child (Group A of three groups) is €320,000 for each child. The tax rate for CAT is also 33pc over the thresh­olds. 6 Check your life and health cover — you could be over-in­sured. Re­view all your in­sur­ances. Are you get­ting the best value? What hap­pens if you or your spouse dies or be­come per­ma­nently in­ca­pac­i­tated? If you took out life cover (with home mort­gages it is manda­tory) you may have been a smoker at the time. Once you are smoke-free for 12 months, you could save your­self over 50pc of the an­nual pre­mi­ums. 7 Health in­sur­ance com­par­i­son — with only three health in­sur­ers in Ire­land (VHI, LAYA & Ir­ish Life Health – the lat­ter bought out the re­main­ing 51pc of GloHealth, plus Aviva Health and merged the two in the sum­mer of 2016), it is re­ally im­por­tant you con­tin­u­ally up­date your­self on the best deal for you. The Health In­sur­ance Au­thor­ity does an ex­cel­lent com­par­i­son of all three and up­dates it. Check out hia.ie 8 Check your gen­eral in­sur­ances — your home build­ings and con­tents — to see if the cover is com­pet­i­tive. If you have com­mer­cial or res­i­den­tial in­vest­ment prop­erty in­sur­ance, is that com­pet­i­tive? Do you re­quire any spe­cial risk in­sur­ance that you ‘risked’ be­ing with­out to date — you may not be so ‘lucky’ next year. Pub­lic li­a­bil­ity, pro­fes­sional in­dem­nity, PC hacker or virus in­sur­ance, even in­sur­ing for that round of drink af­ter a hole in one on the golf course, etc. 9 Avail of any ex­emp­tions on in­come tax li­a­bil­ity

Plus claim any tax re­liefs and al­lowance en­ti­tle­ments up to the last four years. These in­clude med­i­cal ex­penses, rent re­lief, pen­sion re­lief, etc (Text MONEYDOCTOR to 53131 and start the tax re­fund process (nor­mal SMS rates ap­ply).

You may be un­wit­tingly ex­empt from pay­ing in­come tax (eg, an Ir­ish res­i­dent artist pro­duc­ing orig­i­nals that has cul­tural and artis­tic merit, in­come from wood­lands, etc) while you should also en­sure, if self-em­ployed, and your part­ner is work­ing in the busi­ness, that the full en­ti­tle­ment of in­come tax ex­emp­tions is taken up by the part­ner. 10 Pri­vate col­lege fees — tax re­lief at the stan­dard rate is avail­able for ap­proved cour­ses un­der­taken by a tax­payer or de­pen­dents in ap­proved pri­vate col­leges. The cour­ses must be full-time un­der­grad­u­ate cour­ses of at least two years’ du­ra­tion. Post­grad­u­ate cour­ses of be­tween one and four years in pub­lic col­leges and ap­proved pri­vate col­leges now at­tract sim­i­lar tax re­lief. 11 Help your par­ents or be helped by your chil­dren — Covenants are also still pop­u­lar with tax re­lief avail­able for the donor, ie, you. To qual­ify for tax re­lief the pay­ments must be ca­pa­ble of last­ing for at least six years while the re­cip­i­ent has to have un­used tax cred­its to make the covenant work. If a per­son is over 65, their son or daugh­ter can pay them up to 5pc of their in­come un­der a deed of covenant and the son or daugh­ter will get tax re­lief on the amount paid. The covenant must be legally doc­u­mented in or­der for the per­son mak­ing the pay­ment to re­ceive the tax ben­e­fits. Tax at the stan­dard rate (20pc) must be de­ducted and only the net amount paid over. For ex­am­ple, if a daugh­ter gives her mother €1,000 a year, she makes out a covenant and pays €800 to

the par­ent. The mother then gets the other €200 by way of a tax re­bate from Rev­enue, while the daugh­ter also gets tax re­lief of €200. The net cost to the daugh­ter is €600, while the mother gets the ben­e­fit of €1,000. The Rev­enue re­gards the €1,000 as the mother’s. The daugh­ter has al­ready paid €400 in tax (40pc) on the €1,000 and the tax is now be­ing re­turned. Ef­fec­tively, €200 goes back to the daugh­ter and €200 to the mother. The per­son mak­ing the covenant should get tax form R185 from his or her lo­cal tax of­fice and sub­mit. 12 Think pen­sions — if you are self-em­ployed, a 5pc eq­uity hold­ing di­rec­tor or per­haps in an oc­cu­pa­tional pen­sion scheme (where pen­sion hold­ers can make fur­ther pay­ments through an ad­di­tional vol­un­tary con­tri­bu­tion) you should re­view your pen­sion re­quire­ments. Age thresh­olds still ap­ply — eg, at 50 years old, you can in­vest 30pc of your net rel­e­vant earn­ings into a pen­sion plan — while for ev­ery euro you in­vest in the fund, you will save tax at your marginal rate depend­ing on the type of pen­sion.

Just re­mem­ber: if you were re­tir­ing now, ask your­self could you live off the €243.30 per week from the State pen­sion? Less than half the work­ing pop­u­la­tion have pro­vided out­side of the State Pen­sion, while in 2018 there were five work­ers for ev­ery per­son re­tir­ing. In 2050, there will be just two.

The in­cen­tives are still there to start. Apart from the tax re­lief on pre­mi­ums, all growth in the fund is tax-free, plus 25pc of the fund can be taken on re­tire­ment by way of a tax-free lump sum (now capped at €200,000 tax free but any ex­cess is taxed at only 20pc). Still worth it. 13 ARFs (ap­proved re­tire­ment funds) & AMRFs

— re­cent changes in the pen­sion laws now al­low YOU to de­cide what you want to do with your re­tire­ment fund when you have reached the age of re­tire­ment. Up to 1999, the only choice you had was to take out an an­nu­ity (a fixed-rate de­posit ac­count where you re­ceive a monthly in­ter­est cheque un­til you die — a guar­an­teed in­come where the rate never changes) with a Life In­sur­ance Com­pany. When you die, how­ever, the cap­i­tal or fund stays with that life in­sur­ance com­pany and your es­tate loses out.

For PRSA and AVC pen­sion hold­ers, that has all changed now and that fund can now even­tu­ally be passed on to your es­tate through an ap­proved re­tire­ment fund (ARF), in­tro­duced in 1999. Three main con­di­tions ap­ply: › You must ei­ther have min­i­mum €12,700 pen­sion be­fore in­vest­ing your fund in an ARF, or if you do not have a pen­sion; › Put €63,500 of your fund into an Ap­proved Min­i­mum Re­tire­ment Fund (AMRF) til age 75 and; › You then must with­draw 5pc (4pc un­der 71 years of age but 6pc over € 2m fund) of the ARF each year — called im­puted dis­tri­bu­tion. The an­nu­ity sys­tem is still avail­able and has its mer­its too. It is also hugely im­por­tant to have growth in this fund, oth­er­wise you will run out of money. Con­tact your reg­u­lated ad­viser or your pre­ferred pen­sion provider for fur­ther de­tails. 14 Op­er­ate a charge card or a pre-paid card as op­posed to a credit card — credit card bal­ances are nor­mally charged be­tween 9pc and 24pc depend­ing on the credit card com­pany. By switch­ing to a charge card (eg, Amer­i­can Ex­press) you MUST pay off when you re­ceive your state­ment or it is deb­ited to your bank cur­rent ac­count. An­other op­tion is pre-paid cards, where you can only spend what you lodge into the card. 15 Think about other forms of in­vest­ment — for in­stance, gold, rock’n’roll mem­o­ra­bilia, phi­lately or forestry in­vest­ment. Ire­land is the least af­forested coun­try in the EU with for­est cover of 9pc as com­pared with the EU av­er­age of 31pc.

The Ir­ish cli­mate is ideal for tree-grow­ing due to our mild wet cli­mate — trees grow three times faster here than else­where in Eu­rope. Tim­ber prod­ucts are also the sec­ond-largest im­port into the EU af­ter oil.

The EU and the Gov­ern­ment pro­mote forestry through grants and pre­mia pay­ments. They are keen to re­duce agri­cul­tural out­put of which there is a sur­plus in the EU and sub­sti­tute it with tim­ber-pro­duc­ing forests for which there is a grow­ing in­ter­nal EU short­age. 16 Re­view your in­vest­ments monthly — prod­ucts are launched ev­ery week and you should be wary of their per­for­mance on a reg­u­lar ba­sis. Rates change, some in­vest­ments go out of favour — you have to be vig­i­lant. If there is a bet­ter rate or greater po­ten­tial, do not be afraid to move. 17 Claim all your tax re­liefs on res­i­den­tial in­vest­ment prop­er­ties: › 100pc of an­nual mort­gage in­ter­est paid › Main­te­nance & re­pair costs › Ser­vices charges ( in­clud­ing build­ings / block in­sur­ance ) › Prop­erty Man­age­ment Charges › Res­i­den­tial Te­nan­cies Board (RTB) fees › 12.5pc of fur­nish­ings costs for each of the first 8 years af­ter pur­chase (re­ceipts must be main­tained ) › Lo­cal prop­erty tax may soon be off­set against tax li­a­bil­ity on your rental in­come 18 Work­ing from home — if self-em­ployed, you can re­claim par­tial costs by work­ing from home, eg, elec­tric­ity, heat and tele­coms. 19 Save — be aware of the chang­ing de­posit in­ter­est rates. You should also have be­tween three months and six months’ net an­nual in­come in a Rainy Day Fund for three rea­sons: › Emer­gen­cies (your car breaks down); › Sud­den loss of in­come (a job loss); › In­vest­ment op­por­tu­ni­ties (buy­ing a rare Ara­bian oil lamp... ). 20 Rent a room re­lief — Rent­ing a room in your home is tax free up to a limit of €14,000 per year — no ex­penses may be de­ducted and it is not avail­able be­tween con­nected par­ties. One-bed­room apart­ments do not com­ply. 21 Ed­u­cate your­self — there is no ex­cuse not to bet­ter in­form your­self on any fi­nan­cial is­sue. Sem­i­nars, we­bi­nars, the printed works, con­sul­ta­tions and Google — you are not alone.

FOOD, DRINK AND HOUSE­HOLD ITEMS

22 Al­ways shop with a pre-writ­ten gro­cery list — Stick to what is on the list. Men in par­tic­u­lar are dis­as­trous for im­pulse buy­ing. 23 Check to see what you need — be­fore mak­ing out a shop­ping list. Many shop­pers buy items they al­ready have in stock. 24 Cre­ate a daily list for up­dat­ing — if you run short of tea, wash­ing-up liq­uid, kitchen tow­els, etc, these can be added to your main shop­ping list. 25 Look for spe­cial sale an­nounce­ments — in your store, news­pa­pers, ra­dio and tele­vi­sion. It may be worth your while buy­ing a month’s sup­ply of an item you would nor­mally buy, if you can avail of a huge dis­count. 26 Shop only once a month for your non­per­ish­ables — this means you have to plan for the full month and should not over­spend by ad­di­tional vis­its to your lo­cal con­ve­nience store. 27

Keep your re­ceipts — you should track your spend­ing and com­pare prices (a lit­tle black book might be just the job or bet­ter still, avail of the FREE Money Doc­tor APP to track your pre­cise spend­ing habits. It’s avail­able for iPhones and an­droids; just go to your app store, type in Money Doc­tor and down­load). 28 Shop­ping at dis­count stores should not mean that you ig­nore generic prod­ucts in the main su­per­mar­kets — Tesco, Dunnes, Su­perValu, Cen­tra and Spar stores, Lidl and Aldi all pro­duce their own generic goods at con­sid­er­ably cheaper prices than the brand names. In­put all your loy­alty cards on one app, Beep’n Go. It’s free and saves you hav­ing to carry around all those cards. 29 Buy di­rect when you can — all veg­eta­bles and fruit come from the land. If you have ac­cess to a lo­cal farm, buy di­rectly. Apart from sav­ing money, you will ben­e­fit from the fresh pro­duce. 30 Grow your own— if you have a gar­den or a ‘plot’, try grow­ing a few veg­eta­bles, or you could try grow­ing your toma­toes in the house. 31 Buy in bulk — economies of scale ap­ply, in par­tic­u­lar to non-per­ish­ables (tins of beans) and toi­letries (24 roll tis­sue packs). You will need to an­a­lyse your con­sump­tion to eval­u­ate your bulk needs. 32 Don’t buy bulk un­nec­es­sar­ily — a half a ton of nails at rock-bot­tom prices might be fine if you are a car­pen­ter. Spe­cial of­fers such as ‘3 for the price of 2’ might not suit your palate. 33 Use vouch­ers and cut-outs — you will be amazed how all those lit­tle dis­counts add up to big sav­ings on your shop­ping bill; there is no shame in avail­ing of these of­fers. You may even have a dis­count of­fer on the

back Watch of your out shop­ping too for ‘dou­ble re­ceipt. coupon’ days. Look af­ter them­selves. the pen­nies and the pounds will look af­ter 34 Avail of in-store dis­counts and spe­cial of­fers — sim­ply by vis­it­ing your lo­cal store, you might come across a “loss leader” that you might have on your shop­ping list. 35 Shop on­line — this can be cheaper be­cause im­pulse buys no longer ap­ply. De­liv­ery charges are negated by the cost of trav­el­ling to your su­per­mar­ket and park­ing. Not to men­tion the latte. Check out or­gan­ic­su­per­mar­ket.ie, chea­p­eats.ie, coeliac.ie and­good­food­ire­land.ie to name but four. 36 On­line dis­count web­sites — be­fore you shop, you should spend a few min­utes check­ing out some of the dis­count web­sites for economies not just on food — deal­rush.ie , groupon.ie 37 Check the date on all your pur­chases —no point in ar­riv­ing home with out-of-date food fit for the bin. The same goes with food in stock — en­sure that you con­sume foods that have been stored the long­est and, of course, that are still safe to eat. 38 Avoid buy­ing at the check-out and never

ask for cash-back — you are bom­barded with choco­lates, bat­ter­ies, mag­a­zines, etc, in that last-ditch at­tempt to lure the money from your wal­let at the check-out be­fore you leave the shop. Re­sist the temp­ta­tion. Re­ceiv­ing cash-back only in­creases the cost of your pur­chases as the cash-back is soon frit­tered away. 39 Bring your own bags to the store — there is a 22 cent charge for ev­ery bag bought at the check-out used to carry your pur­chases. You could kill two birds with the one stone by buy­ing bio-degrad­able and en­vi­ron­men­tally-friendly bags. 40 Buy food with bal­ance in mind — food and drink should be based on a bal­anced diet. Eat­ing piz­zas and drink­ing fizzy drinks seven days a week is not go­ing to do a whole lot of good for your diet. Plan your meals to re­flect this bal­ance. 41 Avoid snacks af­ter shop­ping — you have been shop­ping for an hour and you go to the store café for a cof­fee and a sit down. Go home and put on the ket­tle. 42 Don’t buy on an empty stom­ach — you of­ten end up buy­ing food sim­ply be­cause you are hun­gry. 43 Bring your own lunch to work — Pre­pare your own roll or baguette and re­fill your wa­ter bot­tle, as long as the wa­ter is fit to drink from the taps. Wa­ter will soon be scarce, so use it wisely — never run the tap wash­ing or brush­ing your teeth.

CARS AND FUEL

44

Re­view your car — does it need re­plac­ing? Could you up­grade the model for ef­fi­ciency pur­poses, eg, cur­rently achiev­ing 25 miles per gal­lon — 40 kilo­me­tres per 4.55 litres. If you were to change, buy a car do­ing 35 miles per gal­lon, you would save 40pc on fuel costs.

45 Change your car to a diesel or an elec­tric

model — apart from the en­vi­ron­ment sup­port through re­duced car­bon emis­sions, you could save hun­dreds of euro by such a change. Bud­get 2018 in­tro­duced the abo­li­tion of Ben­e­fit In Kind (BIK) on all fully elec­tric com­pany cars up to €50,000 in value. 30pc an­nual sav­ings is not to be sniffed at!

46

Avoid com­pany cars — in about 80pc of cases and out­side of most elec­tric cars, it does not pay to main­tain a com­pany car. Ben­e­fit in Kind (BIK) on com­pany cars is pro­hib­i­tive — 30pc of the value of the car when first pur­chased.

For ex­am­ple, a Toy­ota Avensis diesel ver­sion cost­ing €25,520 means that for as long as you have this com­pany car you will pay BIK each and ev­ery year of €7,656 or €638 per month ir­re­spec­tive of the fall­ing value through de­pre­ci­a­tion. Bet­ter to take mileage ex­penses at €0.6348 per mile.

47

Buy a clas­sic or vin­tage car (over 25 years old). Apart from the style, it would be cheaper to buy (and if you deem this car a com­pany ve­hi­cle, the tax payable will be based on the value of the car at the time of pur­chase!) plus they are cheaper to in­sure while there is min­i­mal car tax payable. 48 Re­duce your de­pen­dency on fuel #1 — pool your car and share it with oth­ers go­ing the same way or work­ing in the same com­pany. 49 Re­duce your de­pen­dency on fuel #2 — charge your work col­leagues a fuel-shar­ing fee should they have no car and wish you to drive them to work each day.

50

Re­duce your de­pen­dency on fuel #3 — keep your car in top trim by reg­u­lar car ser­vic­ing, keep­ing the cor­rect pres­sure in your tyres, driv­ing un­der the speed limit, driv­ing smoothly, and no un­nec­es­sary weights in­side the car. 51 Check your tyres for wear — new tyres will be more ef­fi­cient than the worn tyres that cur­rently adorn your car. Over two years old, and un­der nor­mal an­nual mileage, your car can be a death trap any­way. Re­view those tyres.

52

Shop around for fuel — take a note of your lo­cal sta­tions and their fuel prices. Some­times, to grab greater mar­ket share, sta­tions will run a dis­count cam­paign to drive cus­tom through their busi­ness. Look out for fuel dis­count cards and price web­sites such as pumps.ie 53 Re­duce your de­pen­dency on cars #1 —if you are a two-car fam­ily, re­view the need for the sec­ond car. Work out the prac­ti­cal­i­ties. Would pub­lic trans­port — which is im­prov­ing all the time — be more ap­pro­pri­ate?

54

Re­duce your de­pen­dency on cars #2 — would the pur­chase of a bi­cy­cle be prac­ti­cal? Apart from the ob­vi­ous ex­er­cise an­gle, the hum­ble bike costs noth­ing to run and there are even tax breaks for em­ploy­ers to pro­vide the same for their staff. 55 Think elec­tric cars — hy­brid cars are al­ready with us, but the fu­ture car will be an al­l­elec­tric model. Al­ready ca­pa­ble of reach­ing 150kph, with much longer ranges with­out charg­ing, they can only im­prove year-on-year. 56 Car loans are de­ter­rents — if you are a per­son who changes your car ev­ery three years and just re­news the ex­ist­ing (and ex­pen­sive) car loan at that point, try sav­ing over a three-year pe­riod so that you do not need that car loan. 57 Walk — good for the body, pocket and your de­pen­dency on cars.

58 Shop around if you must take out a car loan.

Per­sonal con­tract plans are now the most pop­u­lar form of bor­row­ing. En­sure you read the small print. Some car man­u­fac­tur­ers of­fer 0pc fi­nance to buy their cars. Ex­pect to be charged be­tween 6.5pc (from some credit unions or if you have a re­ally solid re­la­tion­ship with your bank) and 15pc depend­ing on the in­sti­tu­tion you ap­proach. Avoid money­len­ders like the plague. 59 Use pub­lic trans­port — it’s great and ac­tu­ally much more eco­nom­i­cal than main­tain­ing your own car.

LIFE­STYLE AND MIS­CEL­LA­NEOUS NEEDS

60

Brush up the CV — keep your re­sume up­dated. You will never know the day when you may be look­ing for a job. The most re­ces­sion-proof em­ploy­ments can be found in ed­u­ca­tion, health­care, en­vi­ron­ment, en­ergy and se­cu­rity. If you are not in these in­dus­tries, you should brush up your skills, go to night classes or on­line cour­ses. What­ever you do, don’t stay in a sec­tor that is in de­cline.

61 Buy cloth nap­kins and nap­pies, and stick to

your an­nual clothes bud­get — limit your spend­ing on clothes to a bud­get rather than im­pulse buy­ing for that spe­cial party. 62 Look af­ter your clothes — change into ca­sual cloth­ing af­ter work. Hang up ev­ery­thing rather than leave it on the floor or on a chair. 63 Char­ity clothes shops — it is no shame to buy clothes from these out­lets. Firstly, you are help­ing the char­ity. Se­condly, the clothes, of­ten with de­signer la­bels, are far cheaper than buy­ing new. 64 Use eBay to sell un­wanted items — watch out for spe­cial of­fers through­out the year, eg 50pc off nor­mal ad­ver­tise­ment place­ments. Great for sell­ing un­wanted clothes, elec­tri­cal and elec­tronic goods, con­cert tick­ets, etc. 65 Buy generic med­i­ca­tion — you will find brand name medicine al­ways more ex­pen­sive. Ask your doc­tor to pre­scribe generic medicine.

66

Go to your li­brary — all your mag­a­zines, movies and books are there and are free. Soon you will be able to or­der on­line and just col­lect. The good news for au­thors is roy­al­ties are now be­ing paid, al­beit mi­nus­cule, when books are taken out. You now know.

67

Re­view your health club — if you en­joy mem­ber­ship, en­sure you are get­ting value. Mon­i­tor your weight and fit­ness. Same ap­plies to golf clubs, or any sport­ing or so­cial mem­ber­ship. If you are not us­ing it, cut it out.

68

En­ter­tain at home — game nights, movie nights, mu­sic soirées. As en­ter­tain­ment out­side the home be­comes more ex­pen­sive, the sim­pler life beck­ons, but it can also be much more fun and much more so­cial.

69

Plan your an­nual gifts — fam­ily birth­days and Christ­mas presents, spe­cial friends’ gifts. You know you will have to buy, but why wait till the week be­fore Christ­mas to buy — the most ex­pen­sive week of the year?

70 Re­view your cable and tele­coms — do you re­ally need the movie channels and if you are a golf buff, are you re­ally go­ing to spend that much time on Sky Sports and BT Sports, let alone the Golf Chan­nel?

71

Sub­scribe to Skype (skype.com), es­pe­cially if you have to make calls from your lap­top/com­puter to abroad. With over 310 mil­lion sub­scribers and 15 mil­lion on­line at one time, the sav­ings are very sig­nif­i­cant (Skype to Skype calls are free while Skype to land lines are 0.017c per minute). If you have chat­ter­box chil­dren, block all out­go­ing mo­bile calls — the sav­ing could be sig­nif­i­cant while you should al­ways check your tele­com bill and re­view the top 10 most-called and top 10 most ex­pen­sive — it can be very re­veal­ing. What­sApp is equally ef­fi­cient and at no cost.

72

Check with ComReg’s web­site, call­costs. ie. Shop around also for your broad­band. This site gives you all the broad­band op­er­a­tors and var­i­ous costs as­so­ci­ated. The new Euro­pean leg­is­la­tion on roam­ing charges mean it may be cheaper to phone home than send a text mes­sage (which is not cov­ered un­der the new leg­is­la­tion).

73

Shop around for your elec­tronic com­mu­ni­ca­tion hand­sets — mo­bile phones in­cor­po­rat­ing mp3 play­ers, in­ter­net, email, cam­era, video and ra­dio are be­com­ing cheaper and more so­phis­ti­cated by the year. Some of the elec­tronic equip­ment you now have is ei­ther out of date or in­cor­po­rated in new giz­mos. Sell it. Also use recharge­able bat­ter­ies — even plac­ing bat­ter­ies in a fridge will pro­long their life. 74 So­cial net­work­ing — use these web sites to your best ad­van­tage. Face­book, Twit­ter, Linkedin, YouTube, Pin­ter­est, In­sta­gram. Putting your name in front of mil­lions can reap div­i­dends for what­ever your pur­pose. 75 Friends’ hol­i­day homes — you may find that your friends are un­der fi­nan­cial pres­sure and would wel­come of­fers at a dis­count to rent their for­eign hol­i­day homes. A win-win sit­u­a­tion for them and you. 76 Do your own gar­den and handy­man jobs around the house — you will tone your mus­cles, be­come fit­ter plus your gar­den will pos­i­tively bloom — not to men­tion at­tract­ing the ad­mir­ing glances from your neigh­bours. 77 Take hair­cuts at longer in­ter­vals — in­stead of ev­ery six weeks, make it 10. Bet­ter still, cut your own hair or ask a friend to do it. 78 Garage sale — rather than store, hoard or dump your prized pos­ses­sions, sell them from your garage or car boot. 79 Wheelie bins — only leave out your re­spec­tive bins (gen­eral refuse bins, etc, — re­mem­ber there is no charge for the green bin with some firms) when they are com­pletely full. Col­lec­tion charges ap­ply ir­re­spec­tive of weight if you leave the bins out. 80 En­ter­com­pe­ti­tions — scratch cards, news­pa­per, mag­a­zines, ra­dio and TV — some­one has to win and it could be you. If you’re not in, you can’t win.

ELEC­TRIC­ITY AND HEAT­ING BILLS

81 Re­view your gas/elec­tric­ity util­ity provider

— since the suc­cess­ful Big Switch cam­paign from Bord Gais, com­pe­ti­tion is now in­tense. Elec­tric Ire­land are back on the field (they had to wait un­til 40pc of their busi­ness had mi­grated to other providers be­fore be­ing al­lowed back in the game) and with Air­tric­ity, Flo­gas and the new kids on the block En­er­gia, the con­sumer has choice.

Keep check­ing and in­stall a me­ter ( PINERGY. IE & pre­pay­power.ie — the two main pre-paid elec­tric­ity sup­pli­ers. ) 82 Chang­ing your bulbs to CFLs — this will save you up to 20pc of your an­nual bills. They may not look as pretty, but they will put money back in your pocket. 83 Only use wash­ing ma­chines and dish­wash­ers with full loads — like your dust­bin, it will pay you to op­ti­mise the load.

84 Never have the im­mer­sion on with your

cen­tral heat­ing — the im­mer­sion should only be used dur­ing the sum­mer or when you do not need your cen­tral heat­ing. The im­mer­sion is like a ket­tle — it should be switched off when you have heated the wa­ter. 85 Turn your ther­mo­stat down by 1° — you will save 10pc of your an­nual heat­ing bill !

86 Use timers and night timers to­gether with

dim­mers for light switches — also for those wash­ing loads at night. Heavy sleep­ers never hear the din but count the money.

Bet­ter still, in­stall Bord Gais’ Hive­home.ie or sim­i­lar tech­nol­ogy, a sys­tem that al­lows you to con­trol your heat­ing and hot wa­ter through an APP for mo­bile, tablet or PC from any­where in the world... sim­ply bril­liant.

87 Only boil wa­ter in a ket­tle for your im­me­di­ate

needs — there’s no need to put on a full ket­tle of wa­ter when you only want a cup of tea for your­self. 88 Avoid peak time use as much as pos­si­ble (be­tween 5pm and 7pm) 89 Home oil — shop around through the var­i­ous home heat­ing com­pa­nies look­ing for economies. Pay­ing up­front for the year’s oil re­quire­ments may reap div­i­dends. 90 Re­mem­ber to switch off the heat­ing when away — even for week­ends, and es­pe­cially at the on­set of sum­mer. 91 Boiler — if your boiler is more than 10 years old, you could con­sider re­plac­ing it with a new con­denser boiler — this has more ef­fi­cient use of en­ergy and should re­pay in­stal­la­tion costs within two years. 92 In­su­late your house and your pipes — you will save hun­dreds of euro through sav­ing your heat loss. 93 Avail of the en­ergy grants for im­prov­ing the ef­fi­ciency of your home — there are a num­ber avail­able, check out seai.ie/grants

94 Turn off all lights in rooms not be­ing used.

Chil­dren es­pe­cially should be en­cour­aged to turn off lights es­pe­cially in their own bed­rooms when they leave for school on win­ter morn­ings. Min­imise light­ing where you can. Think of us­ing can­dles — it’s more ro­man­tic. 95 Use night­lights, es­pe­cially in the bath­room. They are cheap to run. 96 Take short show­ers and if bathing, have all the fam­ily use the same wa­ter, but not if one of them has just re­turned from a filthy rugby match. 97 En­sure your fridge and freezer is full — if you can­not fill it, place jugs of wa­ter in­side. It is cheaper to run a full freezer than an empty one.

98 In sum­mer, use the clothes line to air your

wash­ing — it’s cheaper than the ex­pen­sive tum­ble dryer. Only use that tum­ble dryer off-peak and prefer­ably at night-time rates. 99 Switch off all elec­tronic equip­ment when not in use — leav­ing them on ‘stand-by’ mode uses 20pc of the nor­mal out­put.

100 Keep in touch with the Money Doc­tor

— by phone at 01 278 5555, or email con­sul­ta­[email protected] › Buy the Money Doc­tor book each year; › Book a 20-minute Money Doc­tor con­sul­ta­tion — only €65 — for a once-a-year fi­nan­cial makeover; › Down­load the Money Doc­tor app from your app store for free to track your daily spend­ing; › Choose the Money Doc­tor sem­i­nar (fi­nan­cially healthy for life ) for your com­pany — an im­por­tant yet en­ter­tain­ing hour-anda-half jour­ney through per­sonal fi­nance in­clud­ing a Q&A; › Keep in touch with Money Doc­tor via Twit­ter (@the­money­doc); Linkedin; Google+; Pin­ter­est and Face­book. Visit the web­site at in­de­pen­dent­fi­nan­cial­ad­vice.ie

PRICES: More con­sumers are be­ing pushed to­wards seek­ing cheaper op­tions

Are you hav­ing trou­ble mak­ing ends meet? Do you run out of money be­fore pay day? Are you ex­trav­a­gant with your spend­ing? Do your fi­nan­cial cir­cum­stances re­quire you to do com­pletely over­haul your life­style and spend­ing? Here, Money Doc­tor John Lowe gives 100 prac­ti­cal and eas­ily im­ple­mentable tips for tack­ling your fi­nances. Armed with these you will have a new-found im­pe­tus to fo­cus on your own fi­nances and start sav­ing money now

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