Key Post: How to save - any tips?

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bluebean

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I'm looking for a post that was on these boards a few months ago. It was from someone who was in their mid-twenties and who was looking for advice on how to start saving. The advice given included writing everything down, shopping around etc.
I've used the search option but can't seem to find the post. Can anyone point me in the right direction?

Thanks
 
Re: How to save - any tips?

Thanks O. I can't find the exact post I was looking for, but I'm off to have a read of the Guide to Savings now.

thanks very much
 
Re: How to save - any tips?

For budgeting the MABS budget calculator is as good as anything - or else just do you own in your favourite spreadsheet application.

[broken link removed]
 
Re: How to save - any tips?

One of the suggestions was "pay yourself first", ie save at the beginning of the month instead of the end of the month. This only works if you can convince yourself to live within your means for the rest of the month. It makes no sense to save at the beginning of the month and borrow at the end!
 
Re: How to save - any tips?

Set up a direct debit from your salary (if possible). What you don't have, you don't generally miss. Try €100 per month.

If you get travel expenses - save 80%.

If you get a bonus - save 80%

If you get a salary raise - save ... you've guessed it ;)

Marion :hat
 
Re: How to save - any tips?

I always find that when a payrise is due (increment,PFF benchmarking whatever) is the best time to increase my payment, which is in my case is taken from my wages, to the Credit Union.

This way you don't suffer a fall in the amount of money you have to spend each week, you just stay where you were while others just go ahead and spend the rise.

It works for me, you don't feel the pinch as much
 
Re: How to save - any tips?

Thanks everyone, some good ideas there. Murt10, can I ask you how much it costs you in charges to have the direct debit from bank to credit union?
My biggest problem is that I get paid monthly, and still can't seem to get over the notion that I have loads of money to spend at the start of the month and suddenly I end up with nothing left for the last week and a half!
I've started tracking everything I spend, writing it all down and already I am beginning to see where I am going wrong. I'm spending quite a bit on 'convenience foods' like sandwiches or ready meals. I need to get myself organised a bit better so I can cook at the weekends and try and make it last for as long as possible.
Any other saving idea's would be gratefully appreciated, thanks!
 
..

I'm in the same boat as others here in that I find it hard to hang on to whatever I have in my pocket.

I've found that the only option is to operate a direct debit into a second account (that I can't get my hands on as easily) on the day my salary is paid into my account. My advice would be to start small with an amount that's easily manageable (20 euro a week?) and build up as your comfort levels allow.

Depending on your bank, direct debit charges may apply but if you're paid monthly this won't amount to more than a few euro a year - cheap enough for the outcome it's providing.
 
saving

I know in AIB, I have a 'feeder' account that I pay 70 a week into, and no charges. Its great for saving ... I don't even miss it because its gone every friday morning when my wages go into my account before I even get to check the balance.
 
Re: saving

Some employers will allow direct salary deductions to a savings plan or a credit union free of charge.
 
Re: How to save - any tips?

My employer stops my Cr Union out of my wages on payday and lodges the rest to my bank account. (Basically it's the same idea as Mickeyboy and Bamboo having a separate account for saving). If the money isn't in your account you can't spend it.

Obviously it's not going to work if your living above your means and spending more than your earning. There is only one answer to this problem.


Murt
 
Re: How to save - any tips?

I have a standing order coming out every month on payday to my Credit Union account, so the money is gone before I have a chance to see it, plus my credit union account is in my home town which is about 70 miles away so it is not easy to get at the money (no ATM machines) either. nearly means taking a half day off work so usually manage to leave the savings untouched
 
Re: How to save - any tips?

Hi Cushtie,

Ya, I'd be in the same boat, credit union is in my home town which is about 100 miles away so I'd be fairly unlikely to go that far to get out some money!

Does anyone know what the rate of interest on a deposit account is in the credit union these days?

thanks
 
Re: How to save - any tips?

Hi Bluebean - The interest rate (dividend) varies from one CU to another. Last year mine paid 3% (2002) but this year the divi was only 2.25%.
 
Re: How to save - any tips?

The interest rate (dividend) varies from one CU to another.
Click to expand...

Actually I don't think it's absolutely correct to equate CU interest and dividends and the payments under each heading may be different each year. As far as I know dividends are paid on share accounts while interest is paid on deposit accounts. Most people have share accounts but when the amount in shares exceeds a certain CU specific limit the excess is put in a deposit account. This is because there is a limit on what proportion of shares any individual member can have in his/her CU. Some CUs may also offer the choice between share and deposit accounts - I'm not sure...
 
Re: How to save - any tips?

Um OK - Its just that I never reach this figure of where you actually have a deposit as oppose to a share account.
 
Saving Tips

The best way to save is to avoid unnecessary expenses.

Beware in particular of credit cards - that 20 euro a month is actually nearly 250 a year, plus government charges.

Also I find it best to avoid regular payments as much as possible - for example if you don't need a landline, get rid of it - savings 25 pm plus call charges. However if you are spending more than 80 a month on a mobile to landlines, it may be cheaper to get a landline. Avoid memberships etc, that you don't use - total waste.

Don't overinsure yourself. Only insure yourself to the value that you actually need. Same goes for health insurance. The "cash back" schemes that VHI and BUPA now operate are only good value if you get back more than they cost you.

Analyse your costs - for example, anybody who opened a once free AIB cashsave account will now be charged as much as a current account for this account. Close it and open a cash account with Ulster Bank or NIB - they are free.

Don't bother with an overdraft if you don't need it. Its a temptation and if you do run into money problems you'll reduce further your available balance. Also they are expensive. Also some banks (NIB and at least one of the others) will give you free banking if you don't require an overdraft.

Don't oversave - I made this mistake once and ended up running up more debt and by the time I cashed in my savings it has cost me more in interest from overdarft and Credit cards than I had made in savings. Try to pay off your loans and cards first.

Change your mortgage to a cheaper provider.

Don't assume that because your car loan/mortgage etc is with your old bank that you cannot change. Oh yes you can! Remember that they don't feel any emotional committment to you as a customer.

Pay regular savings as soon as you get paid, but also try to put away anything left over at the end of the month.

A notice savings account or account book is good as you cannot spend on impulse.
 
Re: Saving Tips

Having recently started budgeting properly, my recommendations are:

Sit down with a pen and paper. Write down every expense you have (Mortgage, Groceries, Car Loan, Car Tax, Petrol, Oil, Kid's pocket-money etc.)

Next note down all income that you have. If your spending is more than your income, then you have some serious thinking to do as to how you can reduce expenditure. MABS offer advice for those who find the situation unmanageable.

Formulise all this on paper or on a spreadsheet. Decide how much you will pay yourself from what remains. When you next get paid, withdraw this money from your account. Put away your passcard for the rest of the month. Keep a sheet and write down any additional expenses that occur that are not in your budget.

As a rule, I suggest you try and save 1/10th of your after-tax income (Include this in your budget). Save with a Credit Union or in a demand account. Have this deducted from your account on the day you get paid.

At the end of the month, get a bank statement and compare your budget against the actual figures. Move any leftover money into your savings account and start from zero again for the next month.

It will take a few months to 'streamline' your budget. It is important that your budget is accurate and that it includes ALL expenses, budgeting for those expenses that happen once/twice a year (Car Insurance, Tax, Heating Oil, Holiday, Christmas etc). It is normally these occassional expenses that cause all the trouble.

I have being doing this (for my family) and find it great. I find the idea of paying youself a wage works really well as you know exactly how much you have to spend for that month and are not constantly checking the account (or constantly being in a state of fear about checking it).

For a family with a joint account, it is an excellent approach. I have met many partners who are in a constant state of rowing over who spent what. With this approach, both parties have their own 'wage' which they can use for whatever they like.

Anyway, that's my experience. I hope it is of some use. I have a budget spreadsheet done up if anyone is interested.
 
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