Take Control of Your Finances

The financial decisions you make today can have far-reaching impacts for your financial future, so it’s important to be confident in those decisions. With the rise of online shopping coupled with increased credit opportunities and the availability of complex financial products, it’s easier than ever to accumulate debt. So, while spending in general during the Covid-19 pandemic has been curtailed, the long-term need to develop good personal money habits has not gone away.  Doing so will empower you financially and also help you develop financial resilience against expected and unexpected life events.  

Planning Ahead

When it comes to making informed financial decisions, many people in Ireland struggle. This occurs when it comes to decisions that include investing, taxes (including tax relief) and compound interest – something that credit cards use on interest charges. Proper understanding of your finances can help prevent you from overextending your funds in this way and ensure that you are saving for unexpected expenses and using credit wisely.

On the topic of investing, it is important to understand concepts of risk and return. Diversification is a strategy that can be used to manage risk and in so doing, increase the potential return of any investment in the near and long-term. Of course, what is central to good investing is understanding and mitigating it. A pension can be an ideal way of investing for the future and this can be done a number of ways. One can participate in a workplace Occupational Pension Scheme. If none is available, they can pay into a PRSA. Both provide the same levels of generous tax relief and also, investment growth within them is tax-free. Remember that Additional Voluntary Contributions offer generous tax-relief too. These can be used to maximise the percentage of an employee’s net relevant earnings which they can contribute towards a pension.

Protecting Your Personal Credit Profile

Your personal credit profile is extremely important. At present, in Ireland, there are two separate personal credit reports: the Irish Credit Bureau and the Central Credit Register. Both operate independently but also, largely monitor how borrowers repay loans they take out from lenders that include credit unions, banks and car finance companies (to name a few). As with any loan, it is important to ensure loans repayments are paid on time. Failure to do so can result in additional fees and charges on credit cards (and loans too!) but of more seriously significance, an impaired credit record. Where a possibility of financial difficulty arises or is at risk of arising, it is important to engage with your lender in advance and prepare your financial records to ensure a detailed financial conversation can take place.

 

Protect Your Financial Wellbeing

Financial wellbeing is complex. It involves managing your financial resources today and making provision for the future. Managing your present-day financial resources, planning for the unexpected, taking advantage of tax-relief and pension options all form part of a successful money management strategy.