MAKING CENTS: Make life easier by taking control of your finances

Consumer advice with Gráinne McGuinness

Are you fed up of New Year’s resolutions yet? No sooner have we polished off the turkey than we are surrounded by admonitions to declutter, get fit and generally revolutionise our lives. There are two problems with many of these lists. One is they ask you to do far too much at once — presented with a list of ten changes to make, most of us will end up doing precisely nothing. The other is they are too general — “get fitter” means running a marathon to one person but getting off the couch for a walk three times a week to another.

The same is true of financial plans — the ones that work best are those that are manageable and specific to your situation.

If you are just starting out.

• The sooner you take control of your money, the easier it is to establish and achieve goals. Set up a budget as soon as you start earning, writing down first your net income and then both your regular bills and day-to-spending. Have a think about what you would like to achieve in terms of saving this year. Does your current pattern allow for it? If not, have a think about how to adjust your habits.
• Even if you have no immediate goals, start the savings habit; everyone should have an emergency fund. Start as low as you like, but review it every three months to see if you could put away a little more. Automate it to make life easier, have your savings debited from your account on payday. You won’t miss what isn’t there.
• If you haven’t thought about health insurance before, do it this year. The younger you start the lower your premiums will be; and people over 35 are penalised for not getting cover sooner. Check out www.totalhealthcover.ie for advice on the right policy.

If you hope to get a mortgage.

• Make your finances clear and regular, the aim is to make it obvious to your bank that you have the capacity to repay. If you are paying rent in cash or paying money at home, change to have a record of it on your current account. Similarly, if you save cash to a credit union or post office account, change it to a regular payment debited from your account.
• Pay down other debt. The mortgage repayment will be your major outgoing, so the less others you have the better. Clear any credit card debt first of all, but if possible, clear down any personal or car loans ahead of time too.
• Your income is just as important as your outgoings. If you work irregular hours or are on a short-term contract it will count against your application. Talk to your employer or a recruiter to see if you can arrange something more permanent.

If you are starting a family

• Life insurance is vital for those who have dependents. You may have cover for your mortgage but that isn’t sufficient if you have a young family. Talk to a broker; a term assurance policy should give you peace of mind at a reasonable cost.
• If you don’t already have health insurance, consider getting it now for the whole household — if you do have it, review to get the right policy for your changed circumstances.
• Look at long-term savings too — it can be hard to think about at such an expensive time but there will be education and other costs down the line. An Post have options for families to save their Children’s Allowance, find out more at www.statesavings.ie.

If you are worried about debt.

• The worst thing you can do is try to ignore money worries. If you have been ignoring letters from the bank or know that your credit card debt is getting out of hand, sit down and address the situation. Get all your financial information together and if you have been hiding debt from a spouse or partner, let them know the true picture.
• There is a multitude of help available. Make an appointment with your local MABS office and take it from there.They will help you get a clear picture of your finances and advise you on where to go from here. They can also help act as intermediary with your creditors and put you in touch with more specialist help if needed.

DEAL OF THE WEEK

It’s a busy time of year for car insurance renewals and many drivers are getting an unpleasant surprise when they get their new quotes.

Your insurer is obliged to make contact with you at least 15 days before your cover lapses so use that time to shop around and see if you can get a better deal.

Until February 28, Aviva is offering eight weeks free cover and 10% off if you buy online.

The deal is available to new customers with a minimum of one year no-claims discount.

Benefits include 24-hour breakdown rescue on all fully comprehensive and thirdparty fire and theft policies, a courtesy car for up to seven days (terms and conditions apply) and unlimited windscreen cover when using their aligned repairer network on all fully comprehensive policies.

It also offers up to 50% discount if you have had no claims for five years, with all discounts applied subject to minimum premium of €280.

Get a quote at www.aviva.ie.