Irish Financial Review

Business innovation crash course for students

For the past year, I’ve been delivering a financial education course into second level schools across Ireland. At first, all of the content was only available through a learning management platform but more recently, I expanded the ways in which teachers could access it.

Innovation

All of the financial education material has been developed specifically for TY students.

To date, approximately 120 second level schools across Ireland have requested access to the video lessons and the supporting material including the advanced Questions & Answers plus the Student Money Manager supports.

Talking with teachers, one topic that comes up more and more is how to teach students the basics of starting a business themselves.

Ireland has a long history of patent filings but this trend has gone in reverse since 2008. There are a number of reasons put forward for this, including outward migration, the role of multinationals, the financial squeeze at higher education institutions and more restrictive access to funding through traditional financial services (crowd-funding may facilitate a reversal).

But for students, especially those at second level, now is the time to be giving them the knowledge they require to get them thinking about their own futures and the possibilities that exist across the globe by innovating their own ideas and bringing them to market.  For example, a new trade agreement called TTIP is currently under negotiation (slowly) between the US and EU which when passed would have enormous trade implications. Some of the business challenges would be enormous but so too would be the opportunities.

For many, the simplest steps can be the most challenging. For example, how to come up with an innovation in the first place including evaluating the market to see if that idea can win customers. How to develop a brand, how to sell…all skills that will be in demand and can be learned.

I put together a simple crash course on the basic steps students must consider if and when have an idea, a concept, a product they believe passionately in. Hopefully, some of the MoneyWhizz students can become great innovators…and great money managers also.

If you would like a copy of the Student Innovation Crash Course, please let us know. 

 

 

Report: State of Adult Financial Awareness in Ireland

Adults across Ireland struggle with key financial concepts our new survey reveals. The findings across key areas of personal financial management including borrowing and investing as well as budgeting highlight difficulties families encounter. 

 

2016 Budgeting Tips from MoneyWhizz

2016 Budgeting Tips from MoneyWhizz

Key findings:

  • One-in-four (26%) are prepared to borrow to pay for goods and services, even in a situation where they already have savings on hand earning little or no interest.
  • Almost half of respondents (47%) failed to correctly identify an appropriate use of credit where it could be used for personal advancement.
  • Over six-in-ten people (64%) failed to interpret the correct situation where inflation would have the most negative impact on personal finances.
  • One-in-three (31%) failed to identify the appropriate level of Life protection for specific life stages.
  • One-in-five (20%) failed to correctly identify which information is available on a personal credit report.
  • Half of respondents (45%) incorrectly identified the most suitable place for short-term savings.
  • Four-in-ten (41%) incorrectly identified the best means of managing their money to counter periods of high inflation.

On the positive side:

  • A majority of respondents (93%) correctly identified the negative impact inflation has on personal savings where the rate of inflation is greater than the rate of interest paid.
  • Interestingly, an overwhelming majority (99%) of respondents correctly identified that stocks are uninsured.
  • A majority of respondents (93%) correctly identified that pension contributions offer positive tax benefits even though a cohort incorrectly answered that private pensions have no tax liability whatsoever. Private pensions have various thresholds over which tax is applicable.

Why financial knowledge matters

Overall, the general level of financial literacy is below where it should be if consumers are expected to make informed financial decisions. It is imperative that consumers are aware of how they would be impacted during periods of high inflation, have an in-depth knowledge of tax thresholds on their private pensions and develop a capacity to retire with sufficient financial resources in place to sustain them. Additionally, families entering a period of high cost during their family life-cycle should ensure they have adequate financial protections in place to provide them and their loved ones with adequate financial cover if and when events arise. There are also some worrying and significant gaps in basic financial skills, and this is especially highlighted where over one-in-four would be prepared to borrow at high cost instead of using savings where they may be earning little or no interest payments.

Frank Conway, Founder of MoneyWhizz – the financial literacy initiative said: “Unfortunately, this survey reveals that many adults have important knowledge gaps across key areas of personal financial awareness which can have massively negative implications for their long-term financial well-being.

He added: “It is vital that financial education and personal budgeting is introduced at an early level, especially in schools as an essential life skill.

Survey Methodology: This survey was conducted between December 2015 and January 2016 from online participants. A total of 201 valid responses were completed.

About MoneyWhizz – MoneyWhizz delivers a full range of financial planning seminars across Ireland including Personal Financial Planning, Personal Investing, Retirement Planning, Protecting against Fraud and Financial Exploitation and Home Purchase. A Special Schools Financial Education curriculum has been developed which is currently being included by teachers and schools as a financial education resource. This special schools programme is aligned to OECD financial literacy specifications.

If you would like a copy of the full report, please email us for a copy. 

5 Tricks for Budgeting Success in 2016

It’s easy to become frustrated at the end of a month when a payslip comes up short and one is faced with living on a shoestring budget until the next payday. This is especially true at the start of the year after the Christmas spending splurge.

2016 Budgeting Tips from MoneyWhizz

2016 Budgeting Tips from MoneyWhizz

As a society, we are being moulded to a culture of spend-it-when-we-have-it. Equally, good intentions often fail because there is a lack of suitable long-term planning and adequate contingencies accounted for at the start of a personal budget plan.

MoneyWhizz has focused on some of the most common traps families fall into which impede their personal budgeting plans but once they recognise those traps, will be better positioned for financial success in the year ahead.

  1. Master of the detail

There is no doubt that modern technology has made paying for services much easier than ever before. In fact, the pace of technological innovation is making use of cash a thing of the past. But while the convenience of paying for services grows, the visibility of how we spend cash and pay for those services falls in tandem. Because of this, it is now more important than ever families put aside ‘budget time’ to review and understand the detail of how they spend, and what they spend their cash on. Doing so will return the knowledge…and control over personal spending. Detail really does matter when it comes to spending across a vast array of services including insurance, utilities, fuel, groceries and so forth. Ultimately, the devil is in the detail, mastering the detail of a personal budget will reap long-term financial rewards.

DOWNLOAD YOUR PERSONAL BUDGET PLANNER

  1. Harness some ‘whoops’ cash

A rainy day or some ‘whoops cash’ is a small amount of ready-cash specifically designated to eliminate the need to borrow when little emergencies, such as a car repair bill, a broken appliance or an emergency trip arises. For example, if and when a car repair bill does pop up unexpectedly, this can force families to rely on high-cost alternatives such as moneylenders and credit cards to pay the cost. But such borrowing options reduce personal wealth due to the high cost of interest. Developing a rainy day cash reserve eliminates high cost alternatives and also creates an opportunity for families to review their short-term financial needs and develop a healthy relationship with money.

  1. Build that S.O.S fund

Unlike a rainy day fund, the purpose of an emergency fund is to cover larger, longer-term living expenses for at least 6 months including housing, food, heating, insurance and so forth in the event one may lose a job. So in order to get that emergency fund in place, some serious financial planning needs to take place first, including itemising all of those living costs that will need to be paid and developing the financial discipline to build the cash reserves. Finally, because the emergency fund can be called on at any time, it is vital that money is readily accessible which precludes any long-term savings and investments which may have restrictive access or apply penalties. Remember, one of the biggest reasons families get into serious financial difficulty is due to illness and unemployment. Putting the financial structures in place to get one through a difficult period will pay dividends in the long-term.

POP QUIZ – DO YOU SUPPORT FINANCIAL EDUCATION IN OUR SCHOOLS?

  1. Link to Personal Goals

Personal financial planning should be set against personal goals. If there are no personal goals, achieving a successful outcome will be much more difficult. For example, when it comes to developing a personal savings plan, for those in their twenties, it could be something as simple as travel or perhaps something more substantial, including savings towards a home purchase. But the steps to meeting that goal should be incremental and allow for life’s little hiccups. So, if you plan to put a set amount of cash aside each month, it’s really important to also allow for situations where other financial needs may dictate a short (one or two-month) break from the plan. With a financial plan and contingencies in place, that personal plan will have a much higher success rate.

  1. Be Truthful…with yourself!

It’s not unusual for some people who set out to establish a personal budget to fail because they are in denial about some habits, including smoking. A successful budget is absolutely dependent on those undertaking it to be completely honest with themselves and what they record. Not doing so is a sure way for early failure.

Now is the time to sit down and plan ahead. Download our personal budget planner to get you started to financially fit you in 2016.

Frank Conway is a qualified financial adviser and founder of MoneyWhizz, the financial literacy initiative.

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