Savings used to pay off essential bills
Most Irish consumers are unable to pay their essential household bills with their regular income, a new study shows.
More than six out of 10 consumers surveyed by the price comparison and switching site Switcher.ie experience difficulty making ends meet. The research shows that dipping into savings is the most common method people use when trying to cover essential bills, with 38% admitting to doing so last year.
Consumers have also admitted to using short-term fixes such as credits cards (26%) and borrowing money from family/friends or the bank (21%) to cover the cost of household bills. Others say they have used money given to them by family and friends (11%) while some (4%) have resorted to pawning or selling their belongings to make ends meet.
The research also shines a light on the household bills that cause financial pressure for households — with motor insurance coming out on top (44%) followed closely by rent and mortgage repayments (43%).
Other household essentials, such as property tax (33%), electricity (29%), broadband/internet (26%) and paid TV services (26%) are also identified as expenses that put a strain on family finances.
“With costly everyday expenses always knocking at the door, for many consumers it can be a constant battle to comfortably cover these household necessities with their regular income,” said Eoin Clarke, managing director of Switcher.ie.
“Sadly this research reveals that our efforts to scrape together cash are solving the immediate issue, but are also leaving no space for future savings. Moreover, relying on credit and borrowing money is only a quick fix to a problem that can easily snowball out of control.
“It should only be used as a last resort, otherwise you run the risk of piling up your debts rather than paying them off.
“However, there are ways to stay on top of our household finances by keeping a closer eye on our spending. Setting a weekly or monthly budget is a good place to start so that you can track your incomings and outgoings.
“This will help you work out how much you need to cover essentials each month and how much you’ll have left over after paying off these bills.”
The study also reveals almost four in 10 (37%) consumers say they are in some kind of debt. Of those who have some form of debt, over one in 10 (14%) admit that they worry about it.
