In the cold light of January, with festive credit card bills in the post, talk of potential recession and a slew of job loss announcements, it can be easy to feel overwhelmed. And in the search for big lifestyle changes that can make a decent dent in the rising cost of living, there’s a temptation simply to throw one’s hands in the air and despair.
For some, there are easy wins. Anyone with the fortitude to give up smoking will notice an immediate boost to their personal finances. The same goes for those who signed up enthusiastically for expensive gyms only to discover they rarely darken their doors. But for the rest of us, it really is a case of looking at the small wins and seeing whether we can identify enough of them to make a real difference.
Switcher.ie, one of the several price comparison websites in the market, has taken up this challenge, if only to show what might be possible.
It has taken a look at energy bills, where multiple increases in prices over the past year mean families are facing dramatically higher bills this winter. The annual bill for those on the “average” use is expected to have jumped to more than €2,100 for this year.
Against this background, the prospect of making changes that save pennies might seem forlorn. But switcher.ie’s running tot shows that even little tweaks in your daily routine can yield sizeable savings over the course of a year.
Swapping out traditional 60-watt bulbs for modern 5-watt LED alternatives around your home will save you €1.33 a week or almost €70 a year, it says, without any loss of light.
Similarly, it argues, making sure your dishwasher is fully loaded before being put on could halve the number of cycles and could save up to €67 a year. Clothes dryers are regularly cited as one of the most expensive appliances in the home and the switcher.ie figures say a family could save as much as €5.19 a week – a not-to-be-dismissed €270 a year – by opting instead for the slower but more economical approach of an outdoor clothesline, when the weather allows, or a clothes horse in our heated homes.
All told, switcher.ie reckons people could save over €850 a year by scaling back on some off their daily routines or swapping everyday appliances for more energy-efficient alternatives.
Not everyone is going to surrender their hair dryer for a saving of just 65 cent a week, but there’s not much pain in limiting your daily showers to 10 minutes rather than 15 for a weekly saving of €2.13. Turn the thermostat down a notch and you can do even better, the company says.
It’s not all win-win, at least not immediately. Many of the suggestions involve replacing energy-sapping appliances for more efficient options which will involve an upfront cost – such as ditching your desktop computer for a laptop, or relying more on a slow cooker or an air fryer for dinners – but they will pay dividends over time. That laptop will save you over €125 a year in electricity costs, according to the report.
Household dynamics differ widely and not all of the proposals outlined by switcher.ie will work for everyone, but the exercise does show how very small individual savings – as little as 43 cent a week by reducing your clothes washing by one cycle a week – can grow to make a meaningful difference to your household budget.
We’ve been hearing a lot in recent months as European interest rates rise about locking in your mortgage on terms that may be favourable, as some of the banks have been slow to move their fixed rates upwards in line with the European Central Bank moves. But, when it comes to savings, the opposite is true.
With interest rates rising, the likelihood is that better rates will be available on your savings later this year and, potentially, into 2024.
As of now Irish banks are still offering derisory rates on deposits and it makes no sense to lock your money into a long-term product in a desperate search for return. In the same way that they have been slow to increased their fixed mortgage rates, they have also held rates on savings at close to zero, well below any rate of inflation.
The best advice for now, if you have savings looking for a home and you’re too risk-averse to consider other investments, is to bide your time with the money-on-demand deposit accounts and wait for what should be more attractive options as the year progresses.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here. Also, to ensure you continue to receive On The Money, be sure to add the email address you receive the newsletter from to your safe senders list.
