By Dave Kavanagh
Every choice you make, every activity you do, every change you contemplate, are in some way connected to your finances. You have income. You have expenditure. The aim is that the first one is always greater than the second, that leaves you with “disposable income”.For most people, the income side is relatively constant. So how can you improve the amount you have left over? On the spending side. The first thing to realise is that most people don’t accurately know the full details of their expenditure. They’ll know some of the main and regular ones, but not all. You can test this by trying to list everything that you spent last month, then look at what you actually spent. They will rarely match. (Think of the last time you took €50 out of an ATM to buy something for €10, for example, what did the other €40 go on?) So the first step is to undertake a strict monitoring of spending for a month. Every cent spent on anything, whether cash, cards or direct debit. Log it every evening. After a month, you’ll have something to work with. The first thing you will usually no-tice is that you spent money on things that you really did not need to (and often wish you hadn’t!) This can help moving forward with reducing spending. But what else can you do? A few tips to cut spending further and hence, improve how much you have left over each month:Carefully study 3 months’ bank statements. Make sure that you can account for every single transaction. On a regular basis, I encounter people who have been paying for things that they should not be. Direct debits they forgot to cancel. Subscriptions no longer relevant. Doubling up on things like house insurance (happens a lot!). Make a detailed list for grocery shopping (and don’t shop while hungry). This leads to only buying what you actually need, a lower bill at the till and less throwing out of food gone off. Also, check your receipt after going through the till. “Acci-dental” over-charging is far more prevalent than you may realise. (Since I began keeping record, one store has overcharged me 65 times!) Compare before you shop for larger items. Just because one store has a fridge you want reduced from €950 to €850 in their “Sale”, does not mean another store nearby that does not cur-rently have a sale on, is not selling the same one for €799. A little research can produce big savings. Com-pare utility providers. Whether it’s electricity, gas, broadband, mobile phone service or similar, there can be substantial savings to be had by switching to better deals. Check when car/house insurance renewals ar-rive. Don’t automatically accept a renewal premium without checking around. A few phone calls could save you hundreds of euro.Review premiums on life cover/mortgage protection/serious illness cover. Especial-ly if you arranged it directly with a bank or insurance company that could only quote you for their products. Massive savings can be made doing this, as you pay for them over such a long period.In over 20 years of helping people with their finances, I have never seen anyone NOT make savings by doing the above. If any-one would like the free budget spreadsheet in excel format that will calculate totals as you input them, just email email@example.com with Budget in the subject line. Happy saving!
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing firstname.lastname@example.org or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM and TV3.