As I write this article, Irish hearts have been broken by Denmark and in particular a footballer named Christian Erickson. Not for the first time, Irish soccer supporters must revisit their holiday plans for 2018. Irish Credit Unions have drastically reduced their estimates on the amount of Rubles they will be lending out next summer and the Russian phrasebooks can be put away.
From a financial point of view, the 5-1 hammering is not a great result for the FAI or indeed the Irish economy. Think of all the pubs, restaurants and TV salespeople that were looking forward to a bumper summer next year.
As consumers, it’s tempting to be drawn into the good cheer and maybe spend more than intended on merchandise and paraphernalia surrounding the celebrations. It’s in our nature to spend first and pay back later. But what if we decide that for 2018 we will buck that trend? Let’s start saving before we spend. Easier said than done I know but hopefully the following tips will help:
Even governments need them! You should know what you spend weekly, monthly and annually on essentials such as rent/mortgage, food, car, insurance, clothing, bills etc. Add an amount for hobbies/entertainment (we do have to live). Is there any left?
2 Open a savings account.
If your budget shows a surplus each month, then you should be able to save. However, it’s a common problem that at the end of each month, we’ve managed to spend everything and there is nothing left to save. To avoid this, you should set up a direct debit to your savings account at the start of each month – close to pay day. Once the money is gone from your current account, you will find it hard to spend it. I recommend a savings account that is difficult to access so you will think twice about that impulse buy. Hopefully, over time, you will build up a rainy day fund for financial emergencies such as household or car repairs.
There are savings to be made on all your utilities by shopping around. From my own experience in 2017, the time taken to switch energy provider was small as the process was simple and there was a definite gain to be made. My phone and internet contract required a much larger investment of time but it is possible. There are websites to help you find the best deals and sometimes a simple phone call to your current provider might result in them offering you a better deal to stay with them.
4. Mobile phone.
This comes under switch too but deserves its own separate point. You need to go back to basics. We use our mobile phones more than ever before so you should review your usage and make sure that your existing plan is right for you. You may be tied into a contract with a particular provider but they may have a different plan that is better suited to your personal needs. Exceeding your data allowance is costly. Some phones will allow you to set up a warning when you are about to reach your limit and this simple update could help you avoid a shock bill.
5. “Look after the pennies and the pounds will look after themselves”.
The only piece of financial advice I remember from my parents and, bar the upgrade required to cents and euros, it is just as true today as it was when I was young. Shop around. Cut out unnecessary spending. What immediately comes to mind is the amount of money spent on lunches or coffee which can be made at home for a much lower cost. For our pension scheme members, we have put together the following video which shows the amount that can be saved over a year by just cutting back on one daily expense.
6. As a pension provider, we have to finish on this essential piece of advice; read your annual pension statement.
Learn about your pension scheme benefits which may also include death benefit and illness cover. If you are in any doubt about what is covered, call us and we will take you through the details. Your annual statement will indicate your likely income in retirement. Is your future retirement looking bright financially? If not, consider saving an additional amount through your pension arrangement. These extra contributions are known as Additional Voluntary Contributions (AVCs) and will increase the amount of income you will receive when you retire. The government will help you with one of the best legitimate tax incentives available. For every €100 you save, the net cost to you is only €60 with a contribution from the Revenue of €40 (if you are a higher rate tax payer)
A lot of what I’ve said is just stating the obvious but when it comes to making resolutions in 2018, consider some financial ones and set yourself some goals. You never know, some small changes now and you might be in a position to fund a trip to the World Cup finals in Qatar in 2022. Whether you’ll be cheering on a revived Irish team remains to be seen.
If you wish to discuss anything in the above article in more detail, please contact your usual CPAS contact and we will assist you however we can.