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Makes total cents! Finance expert reveals 7 easy ways to save money during lockdown

While most of us are now working from home, have no recreational activity expense, no transport costs and few childcare costs, this is a great time to sit back and review EVERYTHING when it comes to money.


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Save money as well as lives staying at home during this lockdown with top tips to make the most of your cash both now and for your future.

For the quarter ending June 2020 - the first lockdown - deposits in Ireland jumped to €5.3 billion compared to €2 billion for the same quarter in 2019.

It was maintained that nearly €9 billion was ready to be spent in 2021 - that was until the third lockdown came along.

While most of us are now working from home, have no recreational activity expense, no transport costs and few childcare costs, this is a great time to sit back and review EVERYTHING when it comes to money.

So where are the areas that we can save money or even make money during lockdown? Essentially there are two basic areas where you can mind the pennies - and the pounds (or euros) will look after themselves. John Lowe of Money Doctors has some of the answers...

1. Plan a yearly household budget

Add all your yearly household bills together and divide by 12. That figure is the amount you need to put away each month to meet those bills just to run the home.

Any capital or "luxury" spending must be found outside of this annual budget.

You should adopt a monthly budget but you should in any event put at least two hours every month into planning your finances to ensure you are on track with your planned spending.

Remember, if your expenditure exceeds income, you have three choices - earn more, cut costs or prioritise. You should query EVERY item of expenditure - ask yourself, do you need it or is there a better or cheaper alternative?

Email me at info@moneydoctors.ie for a simple, easy to use and understand free budget planner spreadsheet - it tots itself up and has all the categories.

2. 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 current best rates.

If currently on a variable rate, this is also a time to check if you should go fixed. Also check to see if your lender is uncompetitive in this to see whether you should switch to another lender or not. The best mortgage interest rate at the time of going to press is Avant Money's 7-year fixed rate of 1.95 per cent.

3. Check your life and health cover

You could be over-insured. Do a review on all your insurances. Are you getting the best value? What happens if you or your spouse die or become permanently incapacitated especially if you have dependants? 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 50 per cent of the annual premiums. Worth checking out.

4. Think pensions

If you are self-employed, a 5 per cent 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 - e.g. at 50 years old, you can invest 30 per cent 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 € 248.30 per week from the State pension? More than half the current working population have nothing to look forward to but the State pension on retirement.

In 2019, for every person retiring there were five workers, while in 2050 with three times the numbers retiring then there will only be two workers. Think about it.

The incentives are still there to start. Apart from the tax relief on premiums, all growth in the fund is tax free plus 25 per cent 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 20 per cent) Still worth it.

5. 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. Better in your pocket.

Saving on home costs

The pandemic has seen a huge number of workers switch from their offices to their homes. Normally the self-employed would be aware of the ability to reclaim partial costs by working from home for electricity, heat and telecoms. This applies now to the new home workers too with the daily allowance of €3.20 aside from other benefits.

Some of the savings to be made from staying at home and avoiding a day at the office include takeaway coffees (at €2.80 a pop), snacks (up to €10) glass of medicinal wine (€9) plus transport, newspapers and the odd taxi - all amounting to a potential €50 a day just going to work

6. Home heating

Turn your thermostat down just 1 per cent and you can save as much as 10 per cent of the actual cost. Remember to switch off the heating when away and especially at the onset of summer.

Think about availing of the energy grants for improving the efficiency of your home. There are a number available, check out seai.ie/grants. Retrofitting is the new buzzword with grants galore plus cheap loans available ( from, for example, An Post Money - Green Hub ).

7. Review your gas/electricity utility provider

Since the successful Big Switch campaign in 2009 from Bord Gais Energy, competition has been intense. Electric Ireland came back into the field and with Airtricity, Energia and Flogas, the consumer now has choice.

Keep checking and install a meter (pinergy.ie and prepaypower.ie are the two main pre-paid electricity suppliers).

Use helpful websites like bonkers.ie, weswitchu.ie, switcher.ie and choosy.ie to find the best deals.

There are so many savings to be made and money to be earned by staying at home - as well as the favour you are doing the nation in these very strange times. Makes cents.

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