If you haven't done so already, now is the time to audit your finances.
The Budget changes coming in this year will leave almost everyone worse off, whether they are on social welfare or on an average family income.
You shouldn't wait until you are heavily in debt to review your budget – it’s just good practice. And you could save hundreds.
1. Review all your insurance policies
For most people, the combined cost of household insurance, phone insurance, health insurance and buildings insurance is the second highest outgoing every month.
You can save hundreds every year with health insurance by simply switching to a company policy, even if you don’t work in a company.
Strange as this may sound, it is totally above board and legal. By law, insurance companies cannot refuse to offer you this policy if it is cheaper. It’s just they won’t tell you it is.
Customers of Quinn who are on Essential Plus - the most popular plan - can save over €260 a year by switching to the company plan.
Customers of VHI facing increases of up to 45% from 1 February should switch plan before that date.
In VHI's case, the company plan isn't necessarily the cheapest.
The Health Insurance Authority says the T-Thrift plan is the nearest equivalent to the VHI Plan B or Plan B Option.
It costs €772 a year compared to €906.00 for the Plan B or €985 for the Plan B Option. That's a potential saving of up to €214.
But you need to phone VHI to change your plan before 1 February to get these prices. Otherwise consider switching insurer altogether.
In other words, never ever just renew an insurance policy because it's convenient. Shop around.
For more information
RTÉ Money: 5 ways to save money on insurance
RTÉ Money: 'I saved hundreds on health insurance'
RTÉ Money: How to save on health insurance
2. Get a better deal on your phone and TV
Shop around for better deals in everything including your phone, your TV subscription and your broadband. Do not be hesitant to switch provider.
Sky TV has been known to drop the price of its basic to as little as €10 a month to keep customers who threaten to leave. And phone companies have really good deals. They just take time to research.
Broadband is also getting more and more competitive - with mobile phone companies and wireless operators forcing prices down and basic download limits up.
Remember, in this climate everyone is hungry for your business and everyone is willing to negotiate.
For more information
RTÉ Money: minimising the cost of your phone
RTÉ Money: Broadband - we shop around for you
RTÉ Money: Digital TV - the options and the costs
3. Get into the habit of using cash
Cash is king. Leave your debit and credit cards at home. If you are going out to buy a €70 pair of jeans, take €70 with you and spend that. Leave your credit card at home. Ditto with super-market shopping, petrol, lunch expenses, etc.
4. Get into the habit of saving
Get into the habit of saving if you haven’t already. This can be through savings accounts or a pension.
If you are already in the habit of saving, aim to build a cash cushion that will get you through bad times.
“You should have a cash cushion to sit on. I’m talking about six months of household expenditure that you should have readily available. Because if you do lose your job it could take you six months to find the next one,” says David Kuo, director of money website Motley Fool.
Get into the habit of checking interest rates. They change regularly and if you discover the rate is no longer as good as a rival, switch.
Rates of interest on savings are so poor at the moment, you would be forgiven for thinking it’s just as easy to store the cash under the mattress.
Think about how often you will need to dip into your savings, however. If you can lock away your cash for a number of months or years you will get a better rate.
An ordinary unlimited access account at Bank of Ireland will earn you just 0.01% interest. But an account which limits you to four withdrawals a year will give you a 3.25% interest.
More information
Latest rates savings accounts for all banks
Latest rates on lump sum accounts (over €5,000)
5. Bank charges – minimise them
Check the charging structure on your account. All banks are all increasing their charges in the new year, not just Bank of Ireland which has been roundly condemned for its new charges for customers, announced just before Christmas.
The Consumer Association has predicted that all banks will either follow suit or introduce so many stringent conditions for free banking as to make it unavailable for the majority of customers.
Don’t hesitate to move bank. Again phone them and threaten to leave and see if they will offer any special fee-free deal.
More information
RTÉ Nine News: Bank of Ireland announces new charges
6. Don’t ignore your debts
Don’t ignore your debts. Rest assured, there are hundreds of thousands of people like you and there are tried-and-tested ways of dealing with debt. There is always a way out no matter how overwhelming the debts are. And remember, a bad plan is better than no plan because you can always improve on it.
More information
RTÉ Money: Dealing with personal debt
7. Make use of the sales and discounts online
We’ve all become accustomed to spending our money a little more wisely, but impulse buying is still a big temptation. So why not join the best recession fashion fad ever: browse in the shops but go home and order the goods online. Quite often the stock will be cheaper.
8. Recycle or sell unwanted gifts
You can donate your unwanted gifts to a charity shop, or save them up to regift - they might make an ideal birthday gift for a friend or a member of your family.
Alternatively you can make some ready cash by selling them online on sites like eBay or gumtree.
Baby clothes are always popular on eBay, as are computer games. Ebay and Gumtree's top tip is to group lower-cost items in one batch and sell together.
9. Review your gas and electricity bills
The big freeze will mean higher energy bills for everyone. Insulating your home can save you thousands.
Consider switching electricity provider if you haven't done already and work out if there is anything you can do to reduce consumption of energy.
Better insulation in the attic is the number-one recommendation any architect will give to save bills. But you should also check if there is are draughts coming in through door and window surrounds. If so, buy simple draught excluder tape at your local DIY and apply it.
More information
RTÉ Money: how to save on your energy bills
10. Celebrate your success
Now that your have taken a new approach to your finances, remember to constantly correct and adapt your plan according to circumstances.
And remember to celebrate your successes, no matter how small they are. Just do it in a cost-effective manner!
More information
RTÉ Money: Clearing your debts - what to do and what not to do
RTE Money: Deals, discounts and shopping offers
Contact RTÉ Money
Send you personal finance questions to money@rte.ie
Send your tips on personal finance to money@rte.ie
