How to earn more money, and how make it stretch a bit further: these are two sides of the same coin; one is about investing, and the other is about saving. But both are a daily worry for the hundreds of thousands of Spanish households which are seeing their expenditures rising greater than their income. Can anything to be done to balance the books?
For example, are websites that compare prices of goods and services any use? What about the many apps that are supposed to help us find bargains? The social networks? Is it possible to renegotiate a mortgage, or a rent reduction?
Do energy-efficiency certificates for homes really mean lower electricity bills? Is it possible to earn extra income from playing the stock exchange? In short: is it possible to save money and earn money at the same time?
Save, save, save has become the mantra of our times. And Juan José Peso-Viñals, a partner at Daemon Quest consultants, says that in terms of consumer goods and services, the two most effective ways to find bargains are through websites that compare prices, and through shopping clubs.
Around half of cellphone users in Spain now use their smartphone for buying goods, according to advertising agency madvertise, a figure that points to radical changes in the way we shop, and not just in Spain.
Pricing pressure has become so extreme, some stores block smartphone use
In the United States, the pressure on retailers has now become so extreme that some stores have decided to block the use of smartphones to compare prices because they know that, as often as not, a better price is to be found among their competitors.
There are now several price comparison websites to help families do their shopping, such as Money, PocketMoney, Mi presupuesto, or Money Saver. There are also apps for smartphones such as Supertruper, which compares prices by scanning a product's barcode or by typing its name in. Other apps that hunt down bargains are Appzapp or Appsfire.
There are also any number of specialist apps, such as Kayak and Skyscanner, which compare hotel and flight prices, or GasAll or Gasolineras Baratas for motorists in search of low-cost fuel, or for those without a car who want to share a ride, such as Amovens or CarPooling.
These tools, some of which are free, confront us with the idea that saving is as simple, and at the same time as complicated, as planning outgoings and earnings.
"The whole thing is about identifying what you can cut back on without reducing your standard of living," says Francisco Marín of the European Association of Financial Advisors and Planners (EFPA).
The key is knowing what to cut without reducing your standard of living"
This approach, which involves maintaining a certain standard of living while paying the lowest price, accounts for the explosion of shopping clubs such as Groupon, Privalia, and Ofertix, which in recent years have enjoyed a boom.
"In the first quarter of the year, sales have outperformed last year's, and exceeded our goals," says Miguel Giribit, the head of Privalia's Spanish operations.
It would seem that the internet is the most effective means for developing a money-saving strategy. "Technology has demolished entry barriers, multiplying economies of scale, and generating price pressures that only exist online, and which consumers are taking advantage of," says Pablo González, an expert in social networks at Ernst & Young consultants.
The trend is now spreading to the social networks. A recent survey by marketing firm Social Bakers shows that the main reason consumers give for following brands via social networks, is to take advantage of promotions. "Around 20 percent of Privalia's sales are via Facebook," says José Luis Nueno, a lecturer at the IESE business school.
Spain is now the fastest-growing market for online shopping in the European Union. Analysts at consultants Forrester say that it will continue to grow by around 18 percent a year until 2017, by which time it will be worth an annual 9.1 billion euros.
The stock exchange can be used to make extra money by small investors"
But that the good old-fashioned cut-out-and-keep coupons is about to disappear any time soon. Low-cost supermarket chain Dia still hands out such tokens to customers, and insists that these can sometimes mean savings of up to 50 percent on someone's shopping.
Similarly, the popular fashion retailer Mango says that most of us still prefer to look round a real store for bargains, although the company admits that more and more of its customers also compare prices and look for bargains on its website.
But if this mounting obsession with saving money proves one thing, it's that it is easier to cut costs in some areas than others. For example, buying a car: the average price of second-hand cars continues to fall thanks to the government-backed Pive 2, a minimum 2,000-euro discount on new car purchases if the buyer turns in a vehicle which is 10 years old or more.
AutoScout 24, a website for used cars, says that the average price for a second-hand auto is 12,248 euros, almost three percent down on last year. But sellers need to know that a new car loses 20 percent of its purchase price after one year, and 60 percent after five years.
Time hits car prices hard, but it's no friend to family budgets either. "When we are told that the recovery will only come about in the long term, many people are left feeling very uncertain about the future, and what is going to happen to them and their family. They ask themselves if they will be able to hang in there for much longer," says psychologist Vicente Prieto.
My advice would be to buy corporate bonds or open a savings account"
"Such circumstances don't necessarily need to trigger a psychological crisis, but they can be the cause of emotional ups and downs," he says citing problems such as psychosomatic illnesses, stress, irritability, alienation, depression, and insomnia.
One way of combating the stresses produced by Spain's declining economy is to resort to any money-saving prescription. Perhaps doctors will have to start taking the impact of the economy on our mental health more seriously, and that making small savings where we can constitutes a small victory in a long and difficult struggle.
Keeping a roof over our heads, whether that means paying the mortgage or the rent, is the cause of many a sleepless night. But there are simple and effective strategies that can help.
"If you have a mortgage and you are not able to make ends meet every month, perhaps the time has come to renegotiate with your lender. If you really are in difficulty, they would much rather find a solution jointly rather than end up taking your home away," says Luis Corral, CEO of Foro Consultants.
If you can't find the money to meet your monthly rent payment, "then it's also time to renegotiate, this time with the owner or the agency, because property owners will always prefer to have a tenant who pays regularly, even if it means a smaller amount, than to have an apartment or house empty, with the costs that this still involves," adds Corral.
If we remove rent or mortgage repayment from the equation, the three basic costs of maintaining a roof over our heads are electricity, gas and water bills. This trio of utilities shares a common characteristic in that they are all getting more expensive in the midst of Spain's worst economic crisis since the country's Civil War. With this in mind, the OCU Consumers and Users Organization has come up with a number of strategies to reduce spending.
1. Electricity. The best money-saving option is to change to a time-based tariff. If your home can account for 30 percent of its consumption between 10pm and 12 midday, for example, then make the switch. This could mean a total saving of up to 10 percent. If you cannot push the bulk of your energy use to this time band, the best option is the TUR: literally standing for "Last Resort Tariff."
2. Gas. The consumer experts advise against having the same gas and electricity supplier. The only advantage is receiving a single bill. Tariffs are always better when received from different companies. It is also important to consider those offers that build in a boiler-maintenance contract, which tend to be short term deals.
3. Water. There is little new to be said about saving water: showers are better than baths, if you bathe every day; turn the tap off while shaving or washing your teeth; and install a household flow limit. A few figures to chew on: the amount of water used to do the washing up twice a day ranges from between 120 liters if done by hand with the tap on, or half that amount if the sink is filled with water, and 25 liters in a dishwater once a day.
In terms of reducing utility bills, the experts at Euroconsult remind us that energy certification will be obligatory from June 1 for all properties, whether on sale or for rent.
Carrying out the necessary renovations to a home can mean energy savings of up to 60 percent. For example, a 100-square-meter dwelling in Madrid that upgrades from E (the least efficient level, and which applies to around 70 percent of all properties) to A (the most energy efficient), can mean savings of up to 2,500 euros a year.
Paying the electricity bill may be a squeeze but, unlike death and taxes, is to some extent avoidable. But Silvia Piedra and Jaume Duch of legal team Cuatrecasas, Gonçalves Pereira have a few ideas.
Given the high levels of non-payment of bills (a problem that is hitting the self-employed and small businesses particularly hard, the taxman has decided to allow them to pay tax only on earnings that have been paid. Similarly, although there are increasingly fewer tax-deductible items, the tax office this year has introduced a new measure to help taxpayers who have paid the deduction for amounts deposited in special savings accounts for first-home buyers but who in the four tax-free years such accounts are granted, have not been able to purchase their home yet.
So much for saving money; what about earning more?
The Washington Post earlier this week published a story about Dylan Collins, a 25-year-old who has racked up six-figure earnings working as a day trader at the stock exchange. Collins says that most of what he knows he learned as a teenager playing online poker.
His story, which for many people proves the link between casinos and the financial markets, is something of an exception, although one that appeals to more and more people.
"It's true that the stock exchange can be used to make extra money by small investors. It has become quite fashionable," says Daniel Pingarrón, an analyst at IG Markets brokers.
"But it is tough out there, and although there are no official figures, it seems that a lot of people who try to play the markets get their fingers burned, or worse," Pingarrón warns.
Leaving aside the more radical options, the markets allow for a number of different strategies that can bring in some extra cash each month. For example, Ahorro Corporation has some interesting advice. "It is possible to set up a portfolio of shares that provide a flow of dividends that generate earnings on a regular basis," says a senior broker there.
This is a somewhat optimistic outlook, to say the least. The Ibex 35, Spain's index of leading companies, has fallen by about half from its record levels a decade ago. If we really do believe that at some point Spain will once again begin growing, then there are grounds for believing that the Ibex will once again rise; look at the S&P 500, or Germany's DAX, which are once again at their height.
And playing the stock exchange is, above all, a long game, notes Santiago Daniel, head of investment at Deutsche Bank's Madrid operations: "It is not clever to try to predict what the markets will do in the short term, nor to think that one is smarter than the markets."
Miguel Ángel Bernal, a lecturer at the IEB Stock Exchange Studies Institute, has advice for the more modest would-be investor. "Under the present difficult circumstances, my advice would be to buy corporate bonds, or simply to put your money in a savings account that guarantees three percent a year, which isn't bad, considering that inflation is around one percent."
The strategies outlined above, which combine saving, tax breaks, investment, and consumption habits, can offer a little help in getting through the ongoing financial crisis. But they also offer a way to begin thinking about different strategies for living, for using the money we have, especially when times are hard.
At the end of the day, "We have to find the hope and the strength to get out of bed each day, and make our way in the world. It is possible to live on very little money, but it is impossible to live without hope," says Vicente Prieto.