What was TS Eliot thinking when he described April as the "cruellest month" in his poem The Waste Land? April is a walk in the park compared with January, especially if you lived out the dying days of December throwing cash around like a Versailles courtier.
The last pay day for people who are paid monthly was more than four long weeks ago, and many such folk still have a few days left before they get paid again. The good news is that, as a result of the October budget, pay packets should be bigger in January than they were in December. How much bigger depends on how much you earn. No matter what the Government might say about it being a progressive budget aimed at tackling inequity and helping people with very little, the reality is that the biggest winners of Michael Noonan’s final budget before the general election were double-income, two-child households in which both adults earn €75,000 a year.
A cut in the main rate of the universal social charge means that a single person earning €30,000 a year will earn the princely sum of €25 more this month than they did last month. That will work out at €300 over the next 12 months.
A working couple earning a combined salary of €150,000 will have an extra €150 to spend this month, which works out at €1,800 between now and next Christmas. If they have two children, they will also get a further €10 each month in child benefit payments, which comes to €120 over the course of the year.
In the coming weeks, talking heads from both Government parties will be bigging up this budget and making sure we know how much they gave back. But how much did they give back and how far will the extra cash go? We thought it would be a good time to look at just what can be done with the money they have returned to the Irish taxpayer.
SINGLE INCOME: €30,000
An additional €25 a month works out at €5.76 a week. To save you doing the maths, that’s 82 cent a day – or half a short-distance bus fare in Dublin.
To be honest, like that bus journey, the extra cash is not going to go a very long way.
Coffee
If you’re partial to a cup on your way to work, the budget bounce will allow you to buy about two large Americanos, enough to get you through the first two days of the week. You’re on your own from Wednesday on. Alternatively you could buy yourself a week’s supply of freshly ground coffee with the money.
Eating in
According to the Insolvency Service of Ireland, a single adult can reasonably be expected to spend about €60 a week on food, so the extra money Michael Noonan will give our fictitious single person earning €30,000 will allow them to increase that spend by 9.5 per cent.
The €5.76 will buy two litres of milk, a loaf of bread and a pound of butter. Alternatively you could go for the Super Savers in the likes of Lidl. Every week the shop sells veg for 49 cent; with your windfall you could buy 11 items.
Party on
A pint or a glass of wine in a pub or one of the more affordable starters in a restaurant such as Milano.
Go farther
The extra money will cover the cost of just one return bus journey from the bus depot in Donnybrook into Westmoreland Street in Dublin city centre. If you want to eschew public transport and use a private car, you will be able to go a little farther. A litre of petrol will take you about 10km, which means, based on today's prices, you will be able to travel an additional 55km each week thanks to the budget changes. However, the huge spike in the cost of car insurance will take at least half your monthly gains away, which means that you will only be able to drive about 25km more each week.
Dress up
The €25 won’t go far if you plan on doing your clothes shopping in Brown Thomas or in the Dundrum Town Centre, but if you confine your purchases to Penneys you will do okay. A woman will be able to buy a new season top and a pair of jeans once a month, whereas a man should have enough to buy a T-shirt, socks and a pair of trousers.
DOUBLE-INCOME HOUSEHOLD WITH TWO CHILDREN: €150,000
Assuming this double-income couple are earning equally, they will be €160 a month better off. On the surface that puts them in a much better position than our single-income, no-children earner on €30,000 – but they have substantially more outgoings too.
Taking care of the children
The biggest outgoing for many parents will be childcare. While the additional children’s allowance of €5 per child a month will be welcome, it is not going to make much of a dent in the cost of putting a child in a creche. The cost of a creche varies depending on where you are in the country, but a fee of €200 per child per week is not uncommon. With creche fees of €800 per month, the budget bounce of €160 starts to seem a little miserly. Costs fall once children hit school-going age, but few working parents of two children will have much change out of €600 a month.
Holiday
Although the money given back to our fictional double-income, two-children household will not make a huge dent in the cost of childcare, if it were put aside it could make the difference between having a holiday and not having one. If this family puts aside the entire €160 between now and the end of July, they will have saved €1,120, which would cover about half the cost of a fortnight on a campsite in France. However, flights have to be added on, as do living expenses, so the €160 would have to be set aside for the full 12 months to cover about half the total bill. Alternatively, you could go on holidays on June 18th for two weeks and the year's savings of €1,920 would cover the total cost, including flights (two weeks' camping starting on June 18th costs less than €1,000 and the flights are cheaper). Just don't tell the school we suggested that.
Eating in
A family of four should be able to eat very comfortably for a whole week with a budget of €160. If you can plan and cook and budget well, you might even be able to eke two weeks of each month out of the tax savings.
Party on
An additional €40 a month would allow a couple to cover the cost of a babysitter for four hours once a week for the rest of the year. The actual cost of a night out would have to come on top of that, of course. And the babysitter might need a cab home, too.
Dress up
We had a quick look in Mothercare and reckon that you could easily kit out both children for a year with the savings and still have enough change to take the family to Funderland in December. Alternatively you could put the whole lot aside each month until December and it would easily cover the cost of next Christmas, which might make next January that little bit less cruel.
