With the recent increases in the cost of living, caused by, among other things, fuel price increases, rising electricity, gas and heating oil costs and even rising grocery prices, it’s worth taking the time to see if there are any adjustments that can be made in order to offset some of these price increases. To do this effectively, the starting point needs to be increasing awareness of your current financial situation. While most people will have a fairly good idea of their regular income, reality has shown that many do not have an accurate picture of their spending. It’s one thing knowing the total that left your bank account last month, but in order to identify precisely where savings can be made, a bit more attention to detail is required.

Doing an exercise for a month where you track every cent spent, whether cash, card, cheque, direct debit or standing order, where you log the details daily, so as not to miss anything, can be hugely beneficial and help identify the areas where savings are easily made (if anyone would like the free excel budget spreadsheet that keeps a running total as you key in the details, just email info@financialcompanion.ie with “Budget” in the subject line and we will email it back to you, with instructions and tips.)

Another good starting point is to take out 3 months’ bank statements and make sure you can account for every transaction. This is particularly helpful in identifying payments that you should no longer be making (happens way more than people may think, things like gym memberships that are no longer used, or house insurance direct debits when you have switched to a new provider but forgot to cancel the old direct debit!) This is also a way to identify any potential fraud whilst also increasing spending awareness.

So, once you have a more accurate picture of spending, what can you do to improve things? Did you see multiple trips to your local convenience store to purchase items that could have been purchased much cheaper in the supermarket? Are you paying for lunches or coffees unnecessarily when you could have prepared lunch at home or made coffee in the office kitchen? Next are things like utilities. Looking at switching annually things like electricity/gas/broadband providers is a proven way to reduce bills. When things like car or house insurance renewals arrive, don’t wait until the last minute to renew, make the time to research alternative quotes. An hour online or on the phone could reduce annual premiums by over €100.

Long term premiums such as mortgage protection, life cover, serious illness cover or income protection, have you reviewed lately to see if you can get the same or better cover for lower premiums? This is particularly relevant if you arranged any of these products directly with a bank or insurance company, who can only quote for their own products which may be the most expensive, and could not compare with what is readily available elsewhere. Quite simply, I have never, in all the years of recommending such an exercise, seen anybody who took the time to monitor their spending and research regular outgoings, NOT reduce their monthly spending. The key factor is to make the time.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, financial advice, positivity and motivation.  As heard on RTE 2FM LMFM and TV3.

Firstly, deal with the “new essentials”. If your income has been reduced, work from the figure you are certain of. List essentials like food, utilities, mortgage etc. It may be that you have availed of a lender’s option to have a payment holiday for a few months. If you are still stretched, you may wish to temporarily freeze contributions to things like saving plans or pensions.

Next, prioritise other things that you pay for. Be careful with things like life cover, mortgage protection, serious illness cover etc. If these type of plans were let lapse, there may be difficulty getting them back in place again if your health has changed since commencing (not to mention any impact from COVID-19 on premiums or underwriting.

In reverse, if you were considering commencing plans like these, it would be wise to do so sooner, while there is still a degree of certainty.) If you are in Ireland, welfare.ie is where you can check eligibility for any of the supports in pace.

Fraud – There has been a substantial increase in attempts of fraud, primarily with “phishing” texts or emails. The most common appear to come from banks, PayPal, Apple Support and even Welfare pretending to give you payment information. Do not click on any hyperlinks in these messages and pay closer attention to your banking transactions.

If you have any doubt as to the validity of a text or email, contact the company or organisation directly (not by clicking on a hyperlink but by opening up a web browser and searching for them or contacting them by phone, where possible.

When shopping, make a list of exactly what you need and stick to it. This can reduce your shopping bill and prevent throwing out food that goes off, as well as reducing the time you need to spend in the shops (as well as making sure that you don’t forget any ingredients that you might need to make something like those delicious home-made cookies in the picture!)

Overall, it comes down to making some time to go through your finances, being more aware of exactly what your expenditure goes on and reviewing any plans that you pay for on a regular basis, such as insurances and saving plans. A little time allocated to these things, can help to put you in control of your finances and not them in control of you, therefore reducing anxiety around money.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.  As heard on RTE 2FM and TV3.

There are so many other benefits to reviewing your finances, not least of which, it can leave you with more money! Two of the tips I constantly tell people is to examine 3 months’ bank statements and to do a monthly spending exercise. Going through the bank statements can help identify things that maybe you should no longer be paying for, or that you are duplicating. Keeping a spending diary for a month will give you a clear picture of detailed outgoings, allowing you to identify spending that you could possibly do more efficiently and permit you to make any changes necessary.

The end result of making the time for such an important topic, will not only usually leave you better off financially, but put you more in control of your finances, thereby reducing the stress/anxiety often associated with money. If it’s something you’re considering, set a reminder alarm for a month away, and if it goes off and you still haven’t done anything, it’s time to act. One hour is 4% of your day. Spending this once or twice per year can be hugely beneficial.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form here https://financialcompanion.ie/contact-us/ Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.  As heard on RTE 2FM and TV3.

“Let’s go for a drink?”, “How about a nice meal out?”, “Shall we book a nice holiday?”, “How about an afternoon shopping?”, all questions that are (usually!) met with a positive response. “Shall we have a look through our finances and plans that we have in place?”, not usually met with the same enthusiasm or joy! For many reasons, people put off or avoid having to go through an exercise such as this, despite the fact that it can lead to them spending less and having more money left over each month! So, what excuses do they present to avoid this not-so-desirable activity and what are they really saying? Let’s have a look:

1. “I’ll have a look at that after Christmas”. This is sometimes replaced with “after Easter”, “after the holidays”, “after the kids go back to school” and a host of others. This is a bit like the “I’ll start the diet next Monday”. What you are actually saying is “I’ll name some time in the future, so I don’t have to face up to it or think about it now”. Let’s face it, you can make time to spend 30-60 minutes even once per year to look at something this important. Every year will have Christmas, summer time, back to school time, etc. Once you do, you’ll be glad that you did!
2. “We have everything in order already”. Great. That is, if you’ve done this in the last few months but many people we’ve heard this from, on closer examination, haven’t looked at this area in years and are not really sure what they have. Circumstances change and it’s important that whatever you have in place is the most relevant for your own personal situation.
3. “Our bank has sorted all that out for us”. Your bank may have sorted a few things for you but in most cases, banks are tied to one company’s products which means a fair comparison cannot be done and you may be paying way over the odds for whatever the bank put in place for you. Dealing with an advisor who is not tied to one company and can compare other options is the only way to make sure you are getting the best value for money.
4. “I’m busy at the moment, I’ll give you a shout in a few months”. Let’s face it, going through your finances is rarely on anyone’s favourite activity list. But the fact remains, if there is an activity you like, you can make time for it. Burying your head in the sand is rarely a successful solution to most problems!
5. “I’ve no spare money at present”. This usually comes from thinking that a review is going to either cost them money or they will have to take out something new that will cost them more money. The reality is, a review will usually highlight someone paying too much for something so the end result is, they save money.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.  As heard on RTE 2FM and TV3.

Missed phone calls – Recently, these have come from a +678 number, but many variations from far-away international numbers have been used. They try not to ring long enough for you to answer (usually your mobile) hoping to prompt you to call back. Doing so, can result in either charging your bill exorbitant amounts or using up your credit. Don’t call back just block and delete.

Calls to landlines – Many are familiar with the “I am calling from Microsoft about the virus on your computer” kind of call. Their aim is to convince you that you have a problem that they can fix, either by giving them payment details, or worse, giving them remote access to your computer which could be giving them far more damaging information. Microsoft do not call homes to tell them they have a virus. Do not entertain or engage, just hang up (perhaps tell them you do not have a computer!) 

Calls to small businesses – These are a bit more organised, in that they scour websites for contact information (could be mobiles or landlines) and have the name of your business in an attempt to sound more credible. Again, their aim is to lull you into a false sense of security and make you think you are upgrading, for example, your Google My Business (I received this one today from an 01-533 number!) As with any call of this nature, including someone purporting to be from your bank, hang up and use your own sources to look up the number and call them direct.

Emails and Text Messages – These are widest in variety, due to the nature of how automated systems can generate multiple mails/messages. It can be anything from updating your payment information for Netflix, confirming an order you have placed using PayPal, or letting you know that your monthly payment for your iCloud storage could not be completed. Under no circumstances, give any banking or payment details in response to these type of mails. Genuine companies will not look for them in that manner (or have as many typos/grammatical errors!) More importantly, DO NOT click on any hyperlinks within the message or mail, for example, “to cancel this order, click HERE”. A hyperlink can be made to look like any words (such as “Unsubscribe”) but can either direct you somewhere sinister, or more likely, download malware that give them full control of your computer/laptop/phone. A recent case in the UK highlighted where a lady had clicked on a hyperlink believing a friend had sent her a link to view some properties (she hadn’t properly looked at the email address they came from.) End result, weeks later was, thinking she had received an email from her solicitors to transfer balance of funds for a property purchase, transferred £65,000 to an account that was cleaned out the next day and never recovered.

With all these methods on the increase and getting more advanced, make sure you are vigilant when receiving any of these and do not engage or give any information away. 

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.  As heard on RTE 2FM and TV3.

As a starting point, know your rights and be aware of shop psychology. Under the Sale of Goods and Supply of Services Act, as a consumer, you have the right that anything you buy should be of “merchantable quality”, that is, suitable for the purpose for which it was designed. So for example, if you buy a fridge and 15 months later it stops working properly, you have the right to have it rectified, by repair, replace or refund (usually in that order). If a shop tries to tell you that the warranty was only for one year, you should point out that the warranty is a manufacturer’s extra and that your contract is with the store, it does not affect your rights under the act. Keeping your receipt as proof of purchase is important. 

Shops will use various techniques to try and persuade you to part with your hard-earned cash. One of the main ones is to mark items with signs such as “RRP/NRP €199, Now only €99”. This does not mean that the item has been reduced or was ever on sale at the higher price. If an item is marked as reduced, such as “Sale – Was €199, now only €99”, it must have been on sale at the higher price for at least 28 consecutive days within the previous 3 months (some shops often get around this by doubling the price of something for 28 days in a low, out of the way shelf, and then reducing it back to the original price with a massive “Half Price” sign!) Even if something is marked as “20% off”, it does not mean it is not cheaper in a nearby store that has no sale. (I recently purchased a multi function printer for €159. I researched a number of options for the exact same printer and it was also on sale at various prices right up to €459!) Do your research.

TIPS

Putting some thought and planning into the Christmas season now, can also make things a lot easier. A few practical tips are:

Leave the credit card at home. If you have not got sufficient funds to buy what you need, going into debt at approximately 20% APR, is not a good idea.

Make a list of who you need to buy for and stick to a budget for each that is affordable.

Avoid the panic of last minute shopping. You are more likely to spend more to avoid running out of time.

Discuss with family and friends the idea of doing a Kris Kindle, where each draws one name and buys them a nice present instead of having to buy 20 different ones. You could be saving someone else a lot of pain this way.

Be realistic with food shopping Christmas week. The shops are only closed for 1-2 days, this should not equate to buying the equivalent of a month’s groceries. 

Overall, a little planning and research should leave you getting better bargains and having more money left over. Happy shopping!

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.  As heard on RTE 2FM and TV3.

Positive v Negative -This is a natural desire for something very positive to happen and for something negative not to happen. However, these everyday occurrences will happen whether or not someone has the right planning in place.  One hour is 4% of your day. Spending that much time even once per year can be hugely beneficial. You get the peace of mind that you are up to date with your planning. You get the reassurance that anything you have in place is the most appropriate for your current circumstances (or if not, the opportunity to make it so). You also get the satisfaction that you are not overpaying for something and are getting the best value. Suddenly, the mystery and uncertainty are removed, along with the stress and anxiety often associated with them. In all my years of doing reviews, I’ve never heard anyone regret taking time to go through their finances, but I’ve heard plenty regret not going through them when something unexpected crops up. Remove “money worries”. Make the time.

Dave Kavanagh QFA has been a Financial Adviser for over 20 years (and a Gym Instructor/Nutrition Adviser before that!) He has done advice slots on RTE 2FM, LMFM and on TV3 and does the “Ask the Expert” Financial Advice section on mams.ie and regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.

For more information on this topic, just send an email  and remember, with Financial Companion, there is no cost and no obligation to arrange a review or get a quotation. Contact us to find out how simple it is.

I see so many examples of people with inappropriate levels of cover, both way too much and way too little. The main reason is lack of understanding about how to calculate financial loss that would be suffered in certain events, for someone’s own, specific circumstances.

Example:

Let’s take a couple, “John” and “Mary”. Both aged 35. They have 2 children aged 2 and 5, they have a mortgage that costs them €1,200 per month which is protected with mortgage protection life cover, no other loans and no savings. John’s net monthly income is €3,800 per month and Mary is not in paid employment. He has no pension in work or associated benefits. In the event of John’s death, the mortgage would be cleared with the mortgage protection. Mary would no longer have John’s income coming in but (assuming they were married) would be entitled to a Survivor’s Pension of €267.10 per week (€1,157.43 monthly equivalent). With no longer a mortgage to pay, there is still a shortfall of over €1,400 per month, to maintain the existing lifestyle, continue to pay bills etc. (For the purpose of this exercise, this is a very simplified example, as many other factors may need to be considered). To provide this shortfall, up until the youngest of the children in theory has finished third level education, this would need to be provided for about 20 years, needing a life sum assured of about €336,000. In reverse, if Mary passed away, John would either have to give up working or pay for extensive childcare and associated costs, needing approximately the same level of cover required for Mary.

Note: If they were not married, there is currently no right to a survivor’s pension, meaning the financial loss that would be suffered is even greater. (See earlier blog – Unfair Taxation of Cohabiting Couples) This is one example of how important it is to consider your own personal circumstances.

While taking the time to review these areas may not be anyone’s favourite pastime, doing so can be one of the most valuable exercises you can do. It can also give you peace of mind that you have the most appropriate plans in place for your current circumstances and are getting the best value available. Just don’t make the mistake of putting it on the long finger or it may never get done.

Dave Kavanagh QFA has been a Financial Adviser for over 20 years (and a Gym Instructor/Nutrition Adviser before that!) He has done advice slots on RTE 2FM and on TV3 and does the “Ask the Expert” Financial Advice section on mams.ie and has spoken on Financial Wellbeing at various seminars and corporate wellness events around the country. For more information on this topic, just send an email  and remember, with Financial Companion, there is no cost and no obligation to arrange a review or get a quotation. Contact us to find out how simple it is.

If someone owns their property and runs into temporary, financial difficulty, for example an injury or illness that keeps them off work for a while, there are arrangements that can be made with their lender for a short term, leaving them in a position where there is no immediate impact on their living arrangements. However, for those renting privately, if the same event occurred, they would most likely be evicted if they could not pay rent on time and in full. When someone cannot work due to illness or injury, depending on their employer, they may be paid for a certain period of time, they may be paid “at the employer’s discretion” or they may not be paid at all. Yet, ironically, a higher proportion of people that own their homes have things like income protection or specified illness cover in place. One of the reasons for this, is that at the time of going through a mortgage application process, they are usually exposed to some degree of financial advice, whether from the lender, a broker, or a financial adviser, who may have made them aware of the options available to protect against the unexpected loss of income (or the financial impact of a serious illness). Having not gone through this process, many of those renting are not aware of these same options, despite being more vulnerable in rented accommodation. Another school of thought is that people who are making a commitment to purchase their own home, are more likely to plan for such events so that their long-term plans of owning their home mortgage-free, are not compromised. Whereas those in rented accommodation may not have given the same consideration to their long-term financial security.

In the current climate of expensive rents and very limited property vacancies, the impact on anyone in rented accommodation suffering a loss of income is even more problematic. It’s well worth taking a little time to consider how you would be impacted and investigate what options there are for you. In basic terms, the earlier (younger) someone commences income protection and/or serious illness cover, the cheaper the premiums will be. Income protection will pay a portion of someone’s income if they are unable to work due to illness or injury and suffer a loss of income, after a deferred period and until they can return to work. Specified illness cover will pay out a tax-free lump sum on diagnosis of one of the specified illnesses that are covered.

Dave Kavanagh QFA has been a Financial Advisor for over 20 years (and a Gym Instructor/Nutrition Advisor before that!) He has done advice slots on RTE 2FM and on TV3 and does the “Ask the Expert” Financial Advice section on http://mams.ie/ and he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation.

For more information on this topic, just send an email  and remember, with Financial Companion, there is no cost and no obligation to arrange a review or get a quotation. Contact us to find out how simple it is.

We often review people’s finances and see that they have their vehicles insured, their house insured, their pets, mobile phones, lap tops and jewellery insured but not themselves! It’s not until one of these events happens that people can fully appreciate the financial loss that is suffered. An important detail is that even if people have cover in place from a few years back, they could well be paying over the odds premium wise or it may no longer be most appropriate. I recently had a couple who had given up smoking a few years and this would have allowed them to reduce their premium by about half! The problem was, there was now a medical issue that would prevent new cover and so they remain paying smoker rates because they didn’t review sooner.

Gambling. So, you can gamble on nothing bad ever happening to you and putting your money into hoping that something very good will happen to you but reality clearly shows which is far more likely to happen. As the saying goes, “I’d rather have it and never need it rather than need it and never have it”. There are a range of protection plans to suit everyone’s budget. For the cost of a takeaway each month, you can usually have something in place that would make a huge difference in the event of one of those “bad things” happening. But it won’t get put in place by itself and putting it on the “long finger” will also not get it done (as well as run the risk that your health in the future could prevent you being accepted for cover at all). If you or your family would suffer a financial loss in the event of a fatality, a serious illness or a long period being unable to work, it’s up to you to make sure that you have protected them against such a loss. It could be the wisest money you ever spend and it could cost far less than you might think!

It’s important that people consider their own, specific circumstances, as subtle differences can mean what’s appropriate for one person or family may not be for another. For free advice in this area or if you have any questions, just contact us.

Dave Kavanagh QFA has been a Financial Advisor for over 20 years (and a Gym Instructor/Nutrition Advisor before that!) He has done advice slots on RTE 2FM and on TV3 and does the “Ask the Expert” Financial Advice section on Mumstown.ie  For more information on this topic, just send an email  and remember, with Financial Companion, there is no cost and no obligation to arrange a review. Contact us to find out how simple it is.