Many of us are being forced to borrow to cover the cost of household essentials
Luckily, there are some simple things you can do to help cut back the reliance on credit
New research published today by Switcher.ie shows most of us are forced to borrow or dip into savings to meet the cost of household essentials - like our rent or mortgage, insurance, energy and broadband bills.
Daily expenses are putting us under pressure
In the last year, over six in ten of us resorted to using credit (like loans, credit cards, or overdrafts) - as well as savings - to pay these basic bills, which suggests that the cost of living is a real challenge.
Many household bills are causing people stress, with almost half saying their motor insurance premiums put them under financial pressure, while four in ten said their rent or mortgage payments, motor tax and health insurance payments cause them stress.
Day-to-day things like electricity costs, broadband and TV payments are also stressing people out - one-third of people admitted to this. The energy price hikes we saw over the past few months could have had an impact on this, with the average energy bill for a year now standing at almost €1,800.
Saving on household essentials
While using credit and dipping into savings can seem like a quick fix, it can lead to longer-term issues, such as rising debt levels and a lack of savings to help out in the event of a rainy day. But how do you stop the cycle of credit?
Well, although we can’t control the cost of living, or our income, we can all take steps to control our spending. The first thing to do is to create a weekly or monthly budget and stick to it where possible. The Budget Planner from the CCPC can help you get started.
Next, you need to take control of your essential household bills. Studies show that many of us stick with the same providers for years and years, which means that we’re overpaying for many of our essentials. Taking some time to shop around for the likes of motor insurance, health insurance, and other services, could significantly reduce your outgoings.
Insurance is a complex product, so if you find that comparing policies is very time-consuming, using a broker can be a big help.
Save over €1,000 on energy, broadband and mobile bills
Many of us are prompted to switch insurance each year, however, the same can’t be said for switching energy, broadband and mobile phone plans, where switching levels remain fairly low - and static - year-on-year.
If you haven’t switched these essentials in a while, you could save well over €1,000 by doing so, which could go a long way towards clearing some residual debt, or bulking up your savings. Here’s how:
- The average gas and electricity customer can currently save €342 by switching from standard tariffs to the cheapest deals on the market.
- The biggest saving that can be made on a broadband, TV and phone plan at the moment is on eir’s Vision TV Essential & Broadband + eir Sport plan, which has a discount of €522.
- If you currently pay €45 for your mobile plan, and you switch to Virgin Mobile’s Unlimited SIM-only plan (with unlimited calls, texts and data), you could save over €300 in a year.
Switching all of these will take you less than an hour, and you could make total savings of €1,164, so it’s well worth taking the time.