Start the savings habit with a payday promise
Most Irish people have good intentions when it comes to saving, especially during the long months when it’s five weeks between paydays. In 2017, those awful five-week long months are April, July, September, and December (the horror).
It’s even worse when the bills come through the door at the same time, and the only option you have is to save money by staying in, bringing lunch to work and cutting back on the non-essentials.
You never realise how nice a chicken lunch from the local deli is until you open your own lunchbox to see your leftover dinner.
But it’s amazing how much you can save in just a year when you make a payday promise to put a little money aside each month into a regular savings account. It’s exactly what it sounds like: you set up your savings to come out of your account the same day you get paid – that way you won’t miss what you never had.
Whether it’s for big or small ticket items, a family holiday, a child’s education, a deposit on a first home, or something unexpected, the savings habit is one that should be embraced with gusto.
Getting started with a savings plan in Ireland
Step one. Sit down and write a monthly budget so you know exactly where you stand financially.
Start by making a note of your household’s after tax income. There are loads of simple online budget tools to help you along your way. Factor in your wages as well as any income you pick up doing nixers or freelance work. Every penny counts.
Step two. Next tot up all your bills, making sure to check recent statements to confirm monthly outlays like your mortgage or gym memberships. Knowing exactly where your money is going is the first step towards deciding where to cut back.
Step three. Then factor in your other expenses such as petrol, groceries, utilities and entertainment. For regular bills, take an average from two or three months.
Heating bills will obviously be higher in the winter months but petrol might be higher in summer if you are going on spins with the kids in the evenings – so exercise your cop-on when working out the numbers.
Step four. Next decide on a specific goal. Are you saving for a holiday, a new car, or a deposit for a house? Work out how much you can afford to put away each month and how long it will take you to get to your goal. This could be 10 percent of your net income, or €100 a month. It all depends on your expenses, how much you earn and what you are saving for.
Step Five. Once you have decided how much you can afford to save, you need to put the mechanisms in place to put away some of your hard-earned cash by opening a savings account.
It’s a good idea to set up a direct debit to your savings account each month so you don’t have to worry about it. It might even be worth setting it up as a joint account if you have a partner. The fact that you’ll need their permission to get to your funds means you’ll be less tempted to splash the cash on random impulse purchases. Do you really need those fluffy Yeti slippers or the vintage football jersey? (Exactly).
And there you have it! An easy five-step guide to implementing a payday promise, so you can start saving for the things that matter.
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