5 Tips for Families Looking for Big Savings

Karl Deeter is a qualified financial advisor and the head of compliance at Advisors.ie and Irish Mortgage Brokers in Dublin. 

5 Tips for Families Looking for Big Savings

I sometimes joke that if you want to make a ‘small fortune’ that you just have to start off with a big fortune and then have kids. As much as I love my children I know – as does any parent – that providing for them is always a balancing act so today I’ll share some money tips you can use that are practical and proven.

Tip 1: Fill Your Boots on Things You’ll Use

A study in the USA looked at people’s ability to save based on their purchases of toilet paper. Without going into detail, the findings were that the best 'savers' tended to buy in bulk when there were discounts and that helped them to lower their costs. You can do the same. If you reckon you'll be brushing your teeth or using loo-roll for the foreseeable future, then don't be afraid to buy in bulk when you see a 2 for 1 or 50% off.

According to the insolvency service people spend about €35 a month on toiletries (many spend much more). If you could save half of that by only buying when big discounts apply you'd save about €18 a month, for a whole year that's €216. If you aren't alone and have a partner and two kids you could easily see that figure more than double, smart buying can save you about €500 a year.

Tip 2: Full Capacity

When raising a family, ‘spare room’ might be about as alien a concept as a romantic cruise, but if you do happen to have a spare room you can rent it out to a student if you live near a college. 'Rent-a-room' is one of the best tax breaks available in the country. Up to €12,000 entirely tax free can be made by renting out rooms. Be careful, if you go over this by a cent you pay tax on the whole lot. If you are thinking of doing it look up the terms and conditions on Revenue.ie. Having extra income to offset costs is a great addition to any household’s finances.

Tip 3: If You’re Worth it Then Get Paid

I play music as a hobby but I get paid to do it, I find it good because it’s something I enjoy and the extra income is always welcome. When I talk about this with people they often say ‘I wish I had something like that I could do’ and it amazes me because usually you can pick out a few things they could do. Everybody has a skill or talent they can use to increase their income, it might be minding children, teaching something, working part time or whatever it is that you can do, but go ahead and do it. A lot of advice is about imposing a brand of personal austerity that doesn’t work out long term because it’s hard to do, all the while overlooking extra income! Don’t get caught up trying to penny-pinch your way rich, the best way to do that is to make more money.

Tip 4: Yearly Beats Monthly

Insurances paid yearly (car insurance, life insurance, mortgage protection and house insurance) are all cheaper by about 10% or more. It isn’t uncommon for the savings across all the insurances that a household buys to find savings of over €200. Why anybody wants to pay more for insurance is anybody’s guess but plenty of people do it, it’s an awful habit so stop it today, pay annually all at once and enrich yourself rather than the insurance company. How can you afford to do that? Easy, rent out a room or make your past-time pay like I just mentioned!

Tip 5: Taxing Times

There is millions in unclaimed tax refunds every year. If you aren’t in the habit of doing a tax return – this goes for PAYE workers too – then go to PAYE Anytime on the Revenue website and register. Lots of jobs have a thing called a ‘flat rate expense’, this is a tax break you get for doing certain jobs, regular jobs, there’s a list you can check. Then you have things like medical expenses and other expenses that you can get tax back on (search for ‘Revenue IT1 credits’ to see the complete list). You can also go back four years to claim for things if you haven’t done so already. We regularly see people find out they are due €500 and more because of this. Revenue want all the taxes they are due and none of what they aren’t due so get your refund if you are due one.

In this short article there is up to €15,000 on the table if you can avail of everything mentioned, some things won’t suit everybody, not everybody has a spare room or the time or inclination to work more, but the important thing is really the mind-set rather than the particulars.

A financially savvy mind-set means you think about money in a sensible way and use what you do have to the best of the ability that you can. Things like buying a little more when certain non-perishables are on sale is an example that was already covered.

As a financial advisor I have long believed I could take any person and irrespective of their circumstances, show them ways to increase their wealth even if they don’t change their income – to do this means coming up with ideas.

That can be hard to do when there is a whirlwind of things to get done as the school year starts, but don’t get caught up, plan ahead, have a few ideas and see what works for you. When you find the things you can do, just keep doing them and then work on the things you don’t do well, nobody gets everything right all the time, but a few good ideas won’t go amiss.

I’m robbing a motto here, but we already know that ‘every little helps’!