Analysis: deciphering the complex numbers around energy costs, mortgages and supermarket prices is key to making good financial decisions

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The difficulties many people encounter when learning maths can lead to maths anxiety: negative emotions and behaviours associated with any encounter with mathematics or numbers generally. Educators speak of the maths anxiety cycle, where these negative states inhibit mathematical learning – and prevent individuals' development of the very confidence and skills that would help them to overcome their anxieties.

But the importance of basic mathematical knowledge and skills is undeniable. We live in a mathematical world, and mathematical literacy - the ability to calculate, think and communicate effectively in mathematical situations - is needed to engage with and stake our place in that world.

A context of immediate relevance is the cost of living crisis. News on this topic invariably involves mathematical terms - the unwelcome percentage increases of fuel prices, interest rates and the rate of inflation. Understanding the numbers is key to making good financial decisions.

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From RTÉ Radio 1's Drivetime, Dr. Aoibhinn Ní Shúilleabháin from UCD talks about maths anxiety

In relation to energy costs, it is important to know where your euros are being spent. MoneyGuideIreland.com quotes an average household electricity bill of €2120 (from October 21st, 2022). Averages are much-loved by analysts, but sometimes have marginal relevance to individual consumers. Indeed, averages can be misleading: the average salary in a company employing 19 workers earning €30,000 and one earning €200,00 is €38,500: not an accurate measure of the earnings of an average employee.

But an electricity bill above the average may indicate a need to take stock of your electricity usage. Some key numbers are useful: Electric Ireland imposes an annual standing charge of €302.91 (including VAT), and then charges 43.27c per kWh (kiloWatt-hour; one kiloWatt of power for one hour). Thus a typical immersion heater (3 kW) running for one hour costs 3 kW x 1 hour x 43.27 c/kWh = €1.2981 (one Euro and 29.81c).

And yes, they will charge you for the 0.81c: this adds to a tidy sum overall when you have over a million customers (you might remember Richard Pryor exploiting this in Superman III: his character skimmed the half-cents that appeared on company wage statements and got rich on the proceeds). It’s worth knowing the power requirements of the different devices in your house, and MoneyGuideIreland.com provides a useful guide as to where your money-saving efforts can best be expended.

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From the Financial Regulator, the infamous 'I don't know what a tracker mortgage is' ad as directed by Damien O'Donnell

There’s a good chance that by this stage, you do know what a tracker mortgage is. Understanding the mathematical nature of loans (and savings accounts) can offer a route to saving money. We have left the era of cheap money, but like financial traders who can position their portfolio to benefit from falling markets, it is sometimes possible to take advantage of increasing interest rates.

This is non-trivial, involving interest rates for loans and savings, the availability of savings to make a lump sum on an outstanding loan, and the Byzantine system of charges imposed by lenders for changes to payment schedules. But there is a rule of thumb: when interest rates on loans increase more rapidly than those on savings, it is time to look into a lump-sum payment. The best advice, as always in financial matters, is to shop around, and brokers such as Mortgages.ie provide online calculators to help with the maths.

The most important item in your mathematical toolkit for a trip to the supermarket is a pair of reading glasses. Most supermarkets list the unit price of goods (in small print, below the price itself). This provides a quick means of determining if a 340g jar of peanut butter costing €2.89 is better value than the 510g counterpart at €4.29. Both items list the unit price - the price per kilogram.

Read more: 5 tips to help your kids with maths you don't understand

And bigger is not always cheaper: supermarkets have a curious habit of drawing shoppers’ attention to "offers" of one for 50c - and four for €2 (or even four for €2.50). It’s hard to know if the supermarkets are underestimating their customers’ mathematical skills, or if it is their own that need attention.

So help with calculations is always available, but having a core understanding of the numbers is essential to know what unit cost pricing tells us, and to interpret advice from a mortgage broker. If you want to build those skills, a number of apps are there to help. Many take a game-based approach, although it’s sometimes a Hunger Games approach: winners leave a trail of corpses in their wake.

The "let’s see who can get the most questions right, fastest" approach is the breeding ground of maths anxiety. But there are good options, allowing users to learn at their own pace. You could do worse than download the Khan Academy app, take a deep breath, and make friends with the mathematical demons of your previous learning experiences.

The views expressed here are those of the author and do not represent or reflect the views of RTÉ