Laughing all the way to the bank

This Cork writer is saving over €5,000 every year and is now passing on his secrets, says Colette Sheridan

TO save money, make changes, not sacrifices, says How to Save 5,000: This Year and Every Year author James O’Donovan. It’s as simple as cutting the cost of your family’s daily orange juice and milk bills.

First-time author O’Donovan is an IT worker in Cork, married to primary school teacher Rosaleen. The couple have an 8-year-old son and are “not on the breadline”, but were impacted by austerity in 2009. “Before you know it, you’re down €10,000 net,” says O’Donovan, 42. “That’s a huge figure, so I decided to do something about it. I looked at all our spending and started with the small stuff. When it comes to saving, you have to see what you’re spending and find a cheaper way of getting the same stuff.”

O’Donovan’s family was using three oranges a day to make fresh juice. “We used to buy oranges in Tesco at 55c each. On average, we were spending approximately €600 a year on them. We started to buy packs of seven oranges in Aldi which, at the time, worked out at 27c each. So, we reduced our bill by €303. We were going through five litres of milk every week and by switching to an own-brand, costing 40% less, we saved €103 per year.”

O’Donovan says use own-brands. “If you search around, you will be able to identify quality and you can still buy Irish, which is important. Between oranges, milk, and buying own-brand tinned tomatoes, we immediately knocked €450 off our grocery bill.

“In 2009, when I decided to cancel the budget in our home, we saved €2,500,” he says. In 2010, the O’Donovans saved €5,000. In 2011, they saved €6,741.

O’Donovan’s online course (€49.99 for a one-year subscription) is divided into 12 modules, a month on each area, from groceries to utility bills.

“It has an in-built savings tracker. You type in what you’re saving, who you have switched to, and what your savings target is and how close you are to it. It keeps you motivated. There’s a calendar, which reminds you when your insurance is due,” he says.

Of house insurance, O’Donovan says its biggest cost is for the rebuild if the house was destroyed by fire.

“The majority of insurance on houses is based on rebuilding costs from the time of the boom, which, of course, were higher. There’s a good chance that many people are over-insured. The Society of Quantity Surveyors in Ireland will tell you much it costs to rebuild your house.”

O’Donovan has a different provider for house, car, and mortgage insurance. “I switch every year. I tell the new company that they have to do better than the old company. They usually will do that,” he says. Insulating a house is a financial outlay. O’Donovan says cut the cost of heating a house by switching providers — every year. “If you make a switch every year, you’re guaranteed a 10% discount. You then go back to the normal rate, but you should switch again after the year.” Savings can be made in less obvious ways. Parents of young children buy batteries for toys. “Instead of replacing batteries, you can recycle them if you invest in a battery charger (about €90) and rechargeable batteries which, while more expensive than ordinary batteries, last for years ... The rechargeable batteries, and the recharger, will pay for themselves in a couple of months,” O’Donovan says. Buy a flask and a mug for working-day coffee rather than pay €2-€3 per cup.

O’Donovan says his family’s biggest saving is on groceries. Low-cost supermarkets and own-brands make this possible. Combine this with a no-waste policy. “A recent survey found that an average €1,000 worth of food is thrown out of households every year. People buy too many vegetables, milk goes sour, and also people don’t understand the best-before date. When the best-before date has expired, you can still eat the food. It’s the use-by-date that’s important.” How to Save €5,000 by James O’Donovan, Oaktree Press, €8.99 in paperback; eBook costs €2.99. www.howtosave5000.com.

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