Where is my money going? A guide to protecting your household finances this month

Financial ‘vampires’: the subscriptions you don’t use.

Go through your bank statement with a fine-tooth comb. That streaming platform you haven’t opened for three months, the home-gym app you installed in January, or the premium delivery service you no longer make use of. Individually, they seem harmless, but together they can eat up between thirty and forty euros a month without you even noticing. They are small black holes draining your budget. If it isn’t adding value, cancel it today; you can always sign up again.

Your bank isn’t just a piggy bank; it’s a tool.

Leaving all your savings sitting in your usual current or savings account is, paradoxically, a quiet way of losing money. With inflation, money loses purchasing power over time unless it earns a return that offsets rising prices. Your bank, building society or financial institution should not be a simple drawer in which to store money, but a tool that helps you manage both the surplus you need to keep accessible and the savings you will not need to use in the medium or long term.

• Your emergency fund (Access and security): For money you need to be able to access immediately if something unexpected happens, there are basic, very low-risk savings products such as interest-paying accounts and fixed-term deposits. They won’t make you rich, but they may offer some return while keeping your money accessible or giving you time to decide what to do with it. That said, it is worth comparing the terms and bearing in mind that the interest may not be enough to offset inflation.

• Your long-term savings (Returns): If you have already covered your emergencies and have money you will not need for several years, you can take on some risk in an effort to beat inflation, always taking your own risk tolerance into account. Tools such as investment funds or diversified fund portfolios allow you to invest in companies around the world with relatively small amounts. The value of your investment will fluctuate from day to day, and you could make a loss. In return, you aim to earn a higher return over the long term than with traditional fixed-term deposits, although there is no guarantee that you will.

Pay yourself first: your most important standing order.

It is the oldest, simplest and most effective financial trick in the world: don’t save what is left after spending; spend what is left after saving. If you wait until the thirtieth of the month to see what is left, the answer will almost always be ‘nothing’.

The solution is to pay yourself first: set up an automatic transfer for payday each month to move a fixed amount — even if it is just twenty euros — into a separate account. It is the modern equivalent of the traditional piggy bank. Automating this habit takes away the mental pressure of having to decide and helps you build up your savings before the day-to-day temptations take hold.

The theory is simple, but every household and financial institution has its own particular circumstances. Are you being charged fees you don’t understand? Are you unsure whether to pay off your mortgage early or invest? Or do you simply not know how to start building an emergency fund?

Leave your questions in the comments section at the end of the article. In future columns, I’ll answer them and look at the cases you put to me. Let’s talk about money without taboos!