Setting significant financial priorities and goals is important, but we also know that life never quite happens in a straight line. Everyone’s path, from childhood to retirement, is interrupted with speed-bumps, switchbacks and a few cul-de-sacs, so it is a good idea every so often to review your finances to make sure that your money is working for you. Here are some tips to give your finances a clean sweep.
1. Manage Your Credit Card
- Set up a direct debit; you can choose what percentage you want to pay and thus avoid any unnecessary interest and charges by always paying on time.
- Plan your spend; Make a list and decide what you will use your credit card for, to avoid impulse spending.
- Check your statement; either over the phone or on-line, reviewing your account regularly will keep you in control of your spending and avoid accidentally going over your credit limit.
2. Get Protected: Life Insurance is not a Luxury
- If you have dependents, a life insurance plan is not a luxury, it’s a fundamental need. It helps maintain a family’s regular standard of living if something happened to the main breadwinner.
3. Plan a Household Budget
- A family budget can help you control your household spending so that you can effectively use your money to help pay your bills and cover the basics on an on-going basis.
4. Start an Emergency Fund
- Always have some money put by for unexpected events – we never know what’s around the corner. A rule of thumb is to have at least 3 months’ salary saved for emergencies.
5. Shop Around for the Best Rates & Prices
- Use online tools like www.bonkers.ie and www.consumerhelp.ie that helps you compare your spending against what other people are spending in areas such as mobile phones, broadband, groceries and energy.
6. Get Your Tax Back
- Although some tax reliefs and credits have been abolished in the recent Budgets, you can still claim tax back on many items, for example:
- Medical fees
- Renting your home (Rent Tax Credits may apply for individuals who pay for private rented accommodation)
- Renting a room in your home to a private tenant (Rent a Room relief). The income received from renting a room in your home may be exempt from tax. There is an exemption limit, which if exceeded means the entire amount will be subject to tax.
7. Plan for Your Retirement
- In the future, the state pension won’t start until age 68, so having your own pension plan is vital.
- When reviewing your financial plan, take a look at what you need to provide a decent standard of living when you hit retirement age.
8. Become a Super Saver
- Try and get in the habit of putting away as much as you can. So instead of opening just one savings account, you could open a number of regular savers, each designed to help pay for things like holidays, new car, third level education costs and home improvements.
9. Be Smart with Your Investments
- Consider an investment that suits your needs by doing a risk profile test to identify what type of investment is right for you. Generally, best advice is to spread your money across different types of investments and assets.
10. Give Your Finances a Regular Checkup
- It’s really important to regularly review your finances with your Financial Adviser, this way you’ll find it easier to keep on top of things. A Financial Review can provide you with the information, education and advice to help you map and fuel the journey. It can help you to:
- Become a lifelong saver and investor.
- Protect your life, income, health and valuables from unexpected events.
- Make the right investment decisions or tackle long-term retirement planning.