In the first edition of 2025’s Construction Magazine, Susan O’Mara, CPAS Business Development Manager and Milestone Advisory Director writes. People often see the beginning of a new year as a fresh start, usually leading with their health, and you will certainly see gym memberships increase around this time. Along with physical health, your financial health is an important aspect of your overall health and well-being. The start of a new year is a good time to give your financial health a boost.

Steps towards improving financial health

Financial health refers to the state of a person’s overall personal financial situation. It considers factors such as income, expenses, debt, and savings as measures of overall financial stability. A financially healthy individual has sufficient income to meet their daily needs, pay down debt, save for future goals, and manage unexpected expenses. Improving financial health requires effort, discipline, and a clear strategy. Here are practical steps that can lead to better financial well-being:

Create a budget: A budget helps track income, expenses, and spending habits. Tools like spreadsheets or financial apps can simplify the process and provide clarity on where money is being spent. Knowing your spending habits may help you to take a more practical approach to your budget. Furthermore, looking at your annual budget can allow you to keep track of what you are spending on goods and services. Using this as a reminder to shop around and switch providers for utilities if there is better value available.

Setting goals and saving: Set financial goals for homeownership, retirement, education, or holidays. Automatic savings is a great way to contribute toward these goals.

Pay yourself first: This means that you should prioritise a regular savings amount rather than only saving what is left over after you have paid your bills. Another important part of saving is building an emergency fund. Conventional wisdom tells us that we should set aside at least three to six months’ worth of living expenses in an emergency fund. This financial cushion can prevent debt accumulation during times of crisis.

Reduce and manage debt: Focus on paying down high-interest debt first, such as credit cards or payday loans. Consider debt consolidation or negotiate lower interest rates with lenders if needed.

Protect your assets: Ensuring that you have adequate insurance coverage, such as health insurance, life, income protection, and home insurance, to protect against unexpected financial shocks. You may not need all of these if you have no family and no debt, but you may require income protection to replace an income if you were unable to work due to illness or injury. On the other hand, if you have a family and mortgage, you are likely to need a combination of Life Cover, Income Protection, and Serious Illness cover. Balance is key, and you should speak to a financial advisor to ensure you are not over-covered in one area and under-covered in another.

Retirement planning: If you are not already participating in a retirement savings scheme or pension plan, now is the time to act. This is a fundamental way to protect your future financial health. A recent article published on RTE.ie quoting findings released by the Pensions Council found that a single person would need a pension of €33,600 a year to have a “comfortable” retirement. With the government’s auto-enrolment scheme due to commence in September 2025, pensions will be a hot topic in 2025. In the current pensions landscape, the tax relief available on pension contributions at your marginal rate of tax and the benefit of the tax-free investment growth positions pensions as an efficient way to fund your retirement.
If you are already in a scheme or plan – do you know the value of your fund? Do you know what it will provide for you at your retirement age? If not, find out. All providers send members an annual benefit statement – this document provides you with a fund value as well as an estimate of what your pension fund will be worth when you reach retirement. You may also be able to access this information online in a pension portal. Once you have done your budget, you will have a clearer idea of your income requirements and what they might be in retirement, assuming you wish your lifestyle to remain the same. What is the difference between your ideal income in retirement and the projection on your benefit statement? Do you need to bridge the gap? Even a small regular additional voluntary contribution (AVC) can achieve this in the long term. If you are close to retirement, it may be less about making contributions and more about planning which option suits you best – Annuity or ARF – you should engage with this decision now and not leave it until the day you hit the golden age!

Financial stability
Financial health is an essential part of overall well-being. By focusing on budgeting, saving, debt reduction, and financial literacy, individuals can achieve financial stability and peace of mind.

With the help of technology and a commitment to continuous improvement, financial health is an attainable goal for everyone.

Contact your pension provider to get expert help.

CPAS provides the administration support for the construction sector’s dedicated pension schemes and is registered to provide the core administration services to the Trustees of the Construction Workers Pension Scheme (CWPS) and Construction Executive Retirement Savings (CERS).

Contact Susan O’Mara via email susan@cpas.ie or phone 01 2234949.