All over the country this month, PAYE workers’ jaws are dropping. Opening their pay packets or bank statements, they’re discovering just how big an impact both Budgets have made. There’s one hell of a chunk missing from your take home pay.
If you are now struggling to meet your monthly bills you should be cutting back as much as possible. It’s only going to get worse after the next round of tax increases that might include a property tax, carbon tax, child benefit tax as well as higher income taxes.
If you are a typical earner your two biggest outlays (after taxation) are housing and food. If you’re on a fixed rate mortgage and have had your mortgage interest relief cancelled, then you should speak to your lender to try and temporarily extend the term of your loan and/or revert to paying interest-only payments to lower your monthly outlay.
Meanwhile, food prices are still coming down, but cutting out processed food, junk food, eating in more than eating out and being diligent about comparison shopping, means that you should be able to cut your food bill by at least 10 to 20 per cent from last year’s levels.
A typical family spends over €10,000 a year on groceries; and such cuts represent a savings of between €1,000 and €2,000.
Another huge outlay in this country is the cost of running a car. Plenty of headlines have been written about the benefits to our pockets, health and the environment if we would simply ditch our cars and start walking, cycling and using public transport again.
That’s all very well, but cars are very useful things if you don’t have access to decent public. Even if you do, cars are very handy for picking up and delivering children and groceries and doing other necessary errands.
However untenable it may seem at first glance, these are all reason why I think it makes sense to consider substituting someone else’s taxi for your own car in these trying financial times.
According to an AA survey conducted last June, the annual cost of running a new, middle range family car worth €24,500 is about €11,500, taking all associated outlays into account – insurance, NCT, petrol (€2,000 on the latter).
That’s €950 a month, €221 a week or €31.57 a day, an expense that wouldn’t necessarily reduce by much even if you do try to substitute unnecessary trips by walking or using a bike.
Instead, you could rent a Ford Focus ‘people carrier’ for five days for as little as €153 right now: multiply that by 52 weeks and it would only cost €7,800 (not including fuel).
But even this is a lot of money especially if you know that your car will lay idle for more than just two days every week.
So why not consider substituting your local taxi service for your car? It certainly merits consideration by anyone living within a few kilometres of their work or mainly uses their car for domestic purposes.
It would take quite a few taxi trips to have you spending €30 or €35 every day, i.e. the €7,800 to rent a car, or the €11,500 to run your own.
Even just the insurance, road tax, NCT and petrol on the AA’s example of a €24,500 family SUV amounts to nearly €3,900 a year, or over a tenner spent on taxis for every day of the year!
Until this country adopts the wonderful, cost efficient car clubs that exist in the UK (about which I have written in this column), your local taxi firm, if there is one in your neighbourhood, village or town would be only too delighted to set up an on-going tax account for you and your family.
It does require the loss of some driving spontaneity, but such a service would undoubtedly come at a generous discount too.
Jill Kerby welcomes reader’s letters. Please write to her via Money Times, The Munster Express, 37, The Quay, Waterford or via email at email@example.com
For all your banking and insurance needs, check out Postbank at your local post office or LoCall 1890-30-30-40