If New Year resolutions are not your thing and 2017 ended up like your bank balance (broke) then the following are sure ways to get your personal finances back on track and keep them there for 2018!
1. Stop paying the minimum on your credit card – this is a sure way to give away a lot of your hard-earned money to large multinationals. Credit cards can be a really convenient way of paying for goods and services but if you repay using the minimum payment option, you’ll end up paying a whole lot more than you might have planned for.
2. Don’t leave the car insurance renewal to the very last minute – give yourself enough time to call around to your existing provider and at last three of their competitors for the best deal.
3. Avoid the ‘pay monthly’ option on home insurance – and go for the pay-all-at-once option. Paying your home insurance monthly means you actually take out a ‘micro’-loan and loans cost money. In fact, your home insurance will cost anywhere from 5% to 8% more when you choose the installment payment option (this works for car insurance too!).
4. Love public transport – if you live in an urban area with lots of public transport, the State actually pays you to use it to get to and from work (there are even schemes for bikes). So let the extra cash burn a hole in your pocket with the tax savings you’ll collect when you use the taxsaver scheme.
5. Claim back what is rightfully yours…its estimated that Irish people leave anywhere up to €800 Million in unclaimed tax in the Government coffers each year! To make matters worse, people are allowed 4 years and provided a really simple process to claim their cash back, but to no avail! So go ahead and claim back part of that €800 million tax windfall!
6. Put a brake on smoking! A a pack of cigarettes costs about €11. The ‘average’ smoker in Ireland blows through about 12.71 cancer-sticks per day which means the ‘average’ smoker burns through €2,541 per year in after-tax income. Saving by quitting is simple maths really!
7. Live on detail – money details that is! Details really do matter when it comes to managing money but if your goal is to save more and spend less, details will be your guiding light. For example, if you have never checked your retirement savings account statement then you are probably paying a bundle in excessive fees; and if you don’t know how to get a copy of your retirement account balance, ask your benefits / HR team!
8. Set your financial goals – setting financial goals can really provide the benefit of giving you a focus. Make sure those goals are set within your financial capacity. For example, if your goal is to save €3,000 over the course of a year, then break this down to a month-by-month financial goal. It will make the goal a lot more achievable.
9. Badger for receipts – we really mean this, when you spend money, get a receipt! This is especially important if you want to achieve your financial goals. Without receipts, your spending will be like driving to your destination in complete darkness; possible but highly improbable.
10. Don’t gamble! – it’s a sure way of showing others that you have a loose relationship with money. For example, banks and credit unions take a really dim view when they see online gambling accounts during a loan application process.
11. Obsess about your profile…you credit profile that is – it really is your most important profile and with the new Central Credit Register taking on the role of the old Irish Credit Bureau, this monster of a database will have far reaching consequences for those that care. Remember, you’ll be entitled to a free copy once per year to get it and review it!
12. Embrace financial education – Ireland has one the lowest levels of financial literacy in Europe but one of the highest rates of investment management fees…knowledge matters and lack of it costs. Take every opportunity to learn about how money really works!
Frank Conway is a Qualified Financial Adviser and founder of MoneyWhizz.org, the financial education service that promotes better financial skills in schools, colleges and in leading employers as part of corporate well-being.