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The current recession has left many families worse off financially and those people who are still fortunate enough to be in employment will now face having to pay more in income levies and health levies from May after the recent crisis Budget was announced.
With mortgage interest relief for people with mortgages for more than seven years disappearing, young families being dealt a blow with the withdrawal of the early child supplement, job losses, pay cuts and pay freezes, money management has never been so important for a lot of people.
There are ways you can try and make these difficult times a bit more comfortable by following these tips.
Making clearing debts a priority
If you have savings, use these to pay off your credit cards or loans and save yourself on the interest you are paying.
For example, for someone who has savings of €1000 and earns interest of 3 per cent in an account, they will expect to make €30 in interest over a year, before tax.
However, if they owe €1000 on a credit card with an interest rate of 18 per cent, they will add €180 to their debt over the year.
Paying off your high interest debts with savings will ultimately leave you better off.
Build up your funds
If you have been able to clear your debts, it is now a good idea to build up an emergency cash cushion in case you are faced with losing your job or have to pay out for something unexpectedly.
You should aim to create a fund of about six times your monthly earnings and ensure this money is put aside in to a savings account with a good rate of interest.
Try to reduce your bills
Look through the bills you pay out with particular attention to your home insurance, motor insurance and life insurance policies,
Premiums for home insurance have risen dramatically by 25 per cent in the past year, but the Financial Regulator has said there are good savings to be made on insurance policies by shopping around for lower quotations.
Ask for help
There are many organisations that can help you with your money management. The Money Advise and Budgeting Service (MABS) have 52 offices around the country offering free, confidential and independent advice to people in serious debt.
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