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The cost of living in Ireland has continued to fall and has dropped by the highest levels in 40 years, giving some welcome relief for hard up families struggling to get by during the economical downturn.
Figures suggest that the cost of living fell during February 2009 by 1.7 per cent largely due to the decreases in transport, clothes prices and mortgage costs.
The Consumer Price Index showed that living costs fell for five consecutive months leading up to February, with a fall of 0.4 per cent for the second month of 2009 alone.
Overall prices are now broadly the same as in the summer of 2007 and February was the second month running that saw negative inflation, with the rate at its lowest level since 1960.
So how has this affected your cost of living and why do you need to know what it is?
Adding up all your expenses to get a clear picture of your cash situation is an essential step that helps with every aspect of your life.
As well as allowing you to plan ahead for the future, it can also help you to prevent problems before they arise and give you clear indications at ways to cut back unnecessary spending, even highlighting areas where you can see some disposable income.
Drawing up a budget is a quick and easy way to see all your incomings and outgoings and can be done simply using a piece of paper and a pen.
Draw a line through the middle of the page and with the help of a few bank statements, write down all your income for one month on the left had side.
On the right hand side are your outgoings, which will inevitably be a longer list and should include rent, loan payments, mortgage payments, bills, food costs etc.
The more honest you are the better the results will be and although it might look a bit frightening to start off with, at least you will not have any nasty surprises coming up.
By deducting your outgoings from your income, this will give you your disposable cash. If you are not living within your means, it may be time to make small non-drastic long-term changes and identify any spending that you can live without.
Rather than using pen and paper Click here for our Income & Expenditure planner and your Financial Plan Calculator.
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