Introducing the MoneyDoctor: We’re long time fans of the MoneyDoctor, John Lowe here in Red Oak Tax Refunds. Not only does he offer great advice, but he makes everything so simple and understandable. Because as well as being smart with Tax, we know there are so many ways in which we can be smart with our money, that are very achievable. I’ll leave it over to the MoneyDoctor then to describe his 5 money saving tips for this Autumn.
5 top tips to save money this autumn
- Plan it – there is a difference between saving and investing – saving is generally short term and immediate while investment is for a minimum period of three to five years. You have to work out initially, how much disposable income you have – that is, after tax, and after rent/mortgage, household bills, food, petrol and “spending money”. You might even know how much money you can afford to put away already. The most important decision about savings can be summed up in one word – START. By planning to save, you are setting immediate goals – for holidays, that new plasma screen television or funding Christmas presents etc So SAVE SMALL BUT SAVE OFTEN – whether a bank’s Regular Saver account, the post office or your local credit union.
- Cut down your banking bills – Overdrafts and especially those exceeding the limits should be a no-no. Apart from the arrangement fee and the high interest rate ( 11% – 15% ), once you have exceeded your overdraft limit, referral fees ( currently € 4.44 and charged EVERY day once the overdraft limit has been exceeded ), surcharges ( an additional interest over that already being charged – can be another 12% ) and unpaid fees ( when the bank decide to send back your cheque and not honour it – you are being charged € 12.70 for this transaction ) all take their toll on your disposable income. Credit cards are similar – try and use it like a charge card and pay off when the bill is due. Best credit card interest rate is AIB Bank’s internet based Click Card at 8.5% but be wary of taking out cash – they charge a whopping 23.4% from the time you withdraw ! You should also shop around for the best mortgage and loan deals, not to mention those insurance premiums – life, health, travel, even your car – they should all be compared with the best on the market – or through an adviser.
- Find the RIGHT savings / deposit accounts – there is no point in saving in a current account. Albert Einstein was accredited as saying Compounding is mankind’s greatest invention as it allows the reliable systematic accumulation of wealth. Many of the top deposit accounts have some minimum and maximum thresholds so you need to do a little research to find out where is the best account for you With the government’s blanket guarantee on deposits in Irish owned financial institutions til at least the end of this year and safety in the state owned bodies like An Post and Anglo Irish Bank, you now only have to find where the best rates are. Therefore your choice is simple
- Ensure your deposit – taker is safe and secure, not to mention compliant and regulated.
- Once this is established, it is a simple matter of finding the best rate – better in your pocket than theirs
- Cut down your household utility and travel bills – when you analyse your household bills, you will find you may have left the lights on for too long, or not used the washing machine on the night-time rate or had the central heating blazing while you were away for the weekend. Buy discounted bus passes, use www.tolltag.ie , a bicycle – over time, not only is it cheaper but better for you physically – or the Last Minute type holidays. You will find many ways to reduce those overheads. Adhere to the Money Doctor mantra – STOP SPENDING, AND IF YOU MUST, ENSURE BEST VALUE
- Diversify
- Don’t put all your eggs in one basket Invest across the board so if one investment goes down, others will thrive.
- Make sure you have provided for your retirement across a broad range of assets including the set up of a pension plan. The main priority should be to preserve your wealth and not look for spectacular returns. If it is too good to be true or you don’t understand the investment, walk away.
- Never let the tax tail wag the money making dog – in other words, tax efficiencies or not, an investment should still stack up on its own merits whether there is tax relief or not.
John Lowe, Fellow of the Institute of Bankers, is managing director of Money Doctor the trading name of Providence Finance Services Ltd Stillorgan Co Dublin and author of the best-selling The Money Doctor Finance Annual 2010 plus 50 Ways to Wealth ( both Gill & Macmillan)
Log on to the web sites or iTunes for podcasts “How to get rich this week” For seminars or consultations tel +353 1 278 5555, email jlowe@moneydoctor.ie or www.moneydoctor.ie