The European Central Bank recently issued the first interest rate increase from 0.25pc to 1.25pc. This may seem like a minor change but for a €300,000 mortgage, it represents €40 per month.
This is just the first incremental increase, with analysts expecting the ECB to increase rates by at least 1.5pc during the next 18 months. That adds another €240 per month to said mortgage and more than €2 billion sucked from an economy like Ireland.
Based on this turn of events, individuals will need to economize in order to further stretch their money. Experts recommend doing several things to reduce spending. Fuel prices continue to increase, making people think twice about owning a second car, even one that has low emissions. Big savings can be gained by becoming a one-car family.
Residential gas and electricity prices are expected to increase in the fall, so now is the time to change suppliers. Families can save £200 annually by doing this. There may be better cable television, broadband, mobile phone, and landline deals out there with other providers, allowing consumers to reduce each bill by £10 per month.
Interest rates on credit cards are soaring so people should look for more inexpensive forms of credit. Credit unions and banks offer cheap loans and some payday loans may be less expensive than carrying credit card balances.
When grocery shopping, people should compare the supermarket brand with name brand products and take advantage of buy one get one free sales.
Those who have been with the same home or car insurance carrier for over three years may be paying too much for coverage. When these policies are due for renewal, people should look online to investigate prices offered by other carriers.
Finally, if a household budget has not been established, it should be and the family will need to stick to it in order to get through these financially challenging times.