Have a better holiday this year by taking a fresh look at 12 areas where you can make significant savings.
Some of the items below are quick wins to help you get back on track for the New Year, and the others are ones might make you hide behind the couch (they also happen to be the most important ones, like income protection and budgeting). Grab a cup of coffee and get stuck in - they will make your life easier in the long run...
If you don't receive pension contributions from your employer, or you are self employed, you need a pension to ensure you will have enough money to live on when you stop working. It's never too early or too late to start a pension, but if you're starting one late, you'll need to put more into it. The difference between starting a pension at 35 and 40 could mean as much as paying 60% more per month. Remember, in most countries, you can get income tax relief on your contributions, so the net cost to you will be lower.
2. Health Insurance
Living without health insurance can be risky. Obviously there are short term savings that can be made when not paying for health insurance, but it's not worth it in the long run. Hospital fees can result in big bills if you are hit with serious ill health, and putting your trust in the public health system may not be ideal in many cases due to long waiting lists. What you should do however, is review your policy every year. New plans come out regularly, as well as new providers. You may be over or under insuring yourself, so take a fresh look when the time to renew your policy comes around.
3. Income Protection
Income protection pays out a regular cash payment that replaces part of your lost income if you can't work due to an illness or disability. To have income protection insurance cover you must work full-time or be self-employed. Most employers have limits on the sick pay (check your employment contract), and if you end up needing more time off than the sick pay covers, you may struggle financially. You might feel like you are the Bionic Man, and you'll never get sick, but wouldn't you rather have a backup just in case?
4. Tax Refund
This one's easy, and should be part of your yearly ritual! If you've been working, either as a resident in your own country, or you were working abroad, you should apply for a tax refund. We help people like you get tax back every day, so you've got nothing to lose! Registering is easy with Taxback.com and we've got the best support on the planet, so why not give us a shot?
We provide tax refunds from 16 countries
5. Bank Charges (and Credit Card)
One of the impacts of the global economic downturn was that banks needed to charge more to get on the road to recovery, which isn't good news for us consumers. Gone are the no-fees accounts, replaced with monthly charges and per-transaction fees. Credit cards interest rates have also increased, so while spending sprees aren't as popular as they once were, you can still get stung pretty hard if you don't pay off your credit card debts on time. Why not set a monthly reminder on your phone or PC to check the status of your credit card bill? That should keep it under control.
Car loans, holiday loans, short term loans, college loans. They can all provide an essential part to get on with your life, but can be expensive. Paying off loans early can be a great way of saving money in the medium/long term. With savings account interest rates at rock bottom, it makes more sense to put spare funds into paying your loans off early as interest rates are far higher for them. Check our the small print first though to make sure there are no penalties for paying off your loans early.
If you own a house or apartment, why not take a fresh look at your mortgage? Don't think of it as a "set up and forget" service. In most countries it's possible to move between variable and fixed, or to change providers. Why not speak with your broker or mortgage provider to see what options are available to you. Remember, just like regular loans, you can also increase the amount of money that you pay off your mortgage every month, which can take YEARS off the term, and save you thousands! Doesn't that sound good? Check it out.
8. The Essentials
You pay every month for heating (gas, oil or electric), cooking (gas or electric), and for electricity. Most providers offer reduced rates for the first 12 months, as they are focused mainly on getting new customers. It's easy to forget about it for a year, and not immediately spot that the rates have gone up. You should set a reminder in your phone once the 12 months offer is finished, and look into changing providers. You might think that buying a bundle (for example; gas + electricity) would give you greater savings, but in many occassions it can work out more expensive.
We provide tax refunds from 16 countries
9. Communication & multimedia
Gone are the days of just a simple TV & phone bill. Now you're probably paying for broadband, mobile phone, data bundle, video streaming (Netflix), music streaming (Spotify), landline phone, TV and satellite. You may be bundling some of these services together from the same provider, but like the essentials mentioned in the previous paragraph, many of them offer introductory reduced rates for 12 months. So why not look again at your communication bills and see if you can save some money?
10. Savings Account
While savings interest rates may be low at the moment, if you do a little digging, you can find some good rates for long term savings account (3 - 5 years) or notice accounts (where you need to tell the bank 30 days in advance that you want to make a withdrawal). It's easy to set up new savings accounts if you find a good deal - you can fill in the registration forms online and they'll post you out a starter pack.
11. Holidays for less
If you're starting a pension, health insurance policy or income protection, you might find that you have less disposable income with it comes to the Summer holidays. Worry not, there are lots of ways to save money and still get a sun tan. Here's one great example - house swapping! There's lots of house swap websites where you can search for accommodation in the countries you are interested in visiting, and contact the owner to ask if they would like to swap for a couple of weeks. There are thousands and thousands of houses & apartments available, so you are sure to find something. The benefits are that you don't pay anything for accommodation, and you can even choose to swap cars to keep the car rental costs down. You can also save some more money by cooking in the house instead of going out to a restaurant every day.
12. Create a Budget
The only way to keep track of all of the savings above, as well as all of your other expenses (like food, entertainment, transport, etc.) is to create a budget. It doesn't have to be some complex excel file with pivot tables and formulae. Just create a summary of all your expenses, and estimates for variables like food and fuel, and contrast it against your income(s) to see where the difference lies. This should help you identify areas where you need to save money, or you can afford to invest (like paying off a loan early).
I hope this guide has helped you to identify some areas where you can save money to get on the road to becoming financially fit! There's no better time than in January!