Are you starting the New Year in debt? You're not alone...
Many of us are forced to borrow to meet the cost of household essentials.
New research, released today by Switcher.ie, has shown that almost two-thirds of consumers say they had to borrow to meet essential household costs last year.
The borrowing included using credit cards, overdrafts, and bank loans, as well as loans from family and friends. On top of this, people also said they dipped into their savings to pay for essential bills.
What does this mean?
Only a quarter of people didn’t have to borrow or use savings to pay bills last year - which means the majority of us are struggling to meet the cost of running our households without resorting to borrowing.
This isn’t surprising, considering the energy bill alone for the average household comes to €2,060 per year.
What can I do about this debt?
If you’re starting this year in debt and you want to do something about it, there are some steps you can take to ease the pressure, for example:
- Draw up a realistic budget, including repayments. Having a good budget - and a schedule for repaying the money you owe - will really help you get on track. Include all your income and outgoings, as well as a buffer for unexpected expenses - and stick to it.
- Switch to a zero interest credit card. Most banks offer introductory offers on credit cards, where you can transfer an existing balance and will pay no interest for a set number of months. You could consider switching to one of these cards, and then paying it off in the interest-free period.
- Cut down on your energy usage. You can make significant savings by making small changes to your energy usage - for example turning off lights when a room is not in use, or plugging out appliances rather than leaving them on standby. Our energy saving guides will help you get started.
Switch to make big savings
In addition to having a good budget, making savings on household essentials will really help on a day-to-day basis.
For example, the average energy customer can save up to €342 by switching from standard tariffs to the cheapest deals on the market.
As well as this, there are lots of deals out there at the moment on broadband, TV and phone plans. Switching to a new broadband, TV and phone provider could save you up to €330 - and many providers offer cash back, free Netflix or other perks, too.
And, if you’re one of the many who watches the majority of their TV via a streaming service, you may want to consider whether or not it is worth your while paying for a paid TV service, or if perhaps a broadband only deal is better for you.
Start as you mean to go on
Although it might seem daunting, tackling this debt head on will really help you to start the year on the right foot.
And remember, switching only takes a few minutes, and the savings you make could go a long way towards clearing that residual debt!