The starting point when managing your household budget is to take a financial photograph of your current position. Be honest with yourself and itemise everything – your expenditure, your income, your assets and your liabilities. Establish your objectives, both financial and personal – Where do you want to be in one year, 5 years and at retirement? Write them down!

Then prepare a budget, this is a detailed plan of your financial journey from your starting point to your desired destination.

Focus on your outgoings and identify cost savings. If you cannot increase your income, making some cost savings will be vital to enable you to reach your desired financial destination. 

Some practical tips for cost savings are

• Look at all regular payments – Do you know exactly what you are getting for you each one? Are they necessary? Is there better value available?
• When was the last time you used the gym membership?
• Are there cheaper options available for electricity, gas, mobile phone service, fixed line telephone, broadband?
• Turn down your heating thermostat by 1 degree.
• The rebuilding cost/reinstatement value of your property may have dropped as building costs have dropped – so why is your house insurance cover increasing every year?
• Some life assurance costs have reduced. Have you become a non-smoker?
• Do you throw food out every week? Make a note of it and only buy what you plan to consume. Stick to your shopping list and don’t shop when you’re hungry. Look at the Economiser software on the National Consumer Agency website to find out what the average household spend is for your family size.
• Look at your credit card(s) - If you have an ongoing balance, is there a better interest rate available to you by calling your provider and/or moving your account elsewhere? At present some credit cards charge a lower rate of interest than a new personal term loan from your bank!
  Mortgage and loan repayments - This area may be your most significant outgoing. Record the interest rate and payment terms on each loan and explore possible alternatives. Be very slow to give up a tracker mortgage rate if you have one!

This article was written by:

Paul Lucas

www.GoodFinancialHousekeeping.ie

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Paul lives and works in Celbridge and please contact him is you are looking for financial advice!