The last five months have changed life in a number of ways, affecting everything from our work habits to the ongoing complexity of socialising and downtime. As a direct result of lockdown regulations and social distancing, our spending habits have also undergone significant changes.
“The Covid pandemic has affected investment markets which in turn may have a knock-on effect on most people in some shape or form,” says John O’Driscoll, managing director of Blueprint Financial Planning & Financial Fitness.
“It is important to remain positive and plan forward, thinking for the future where you can comfortably deal with life’s inevitable ‘rainy days’ — a prospect that allows people to enjoy the things that matter to them in their lives.”
With the unemployment rate above 22% and many still struggling to work from home, people’s budgets are likely to be different, for better or worse, he points out.
“On the one hand, we have the over-cautious who tend to stop spending, versus the under-cautious, who frantically buy anything that takes their eye online.”
Regardless of whether the uncertainty makes you want to tighten the purse strings or increases the desire to spend, now is always a good time to check the health of your finances, he believes. “While uncertainty still surrounds Covid-19, the one thing you can always take control of is your personal finances.”
Having recently launched www.financialfitness.ie — an online financial planning platform where consumers can plan for their financial future from the comfort of their own home, John outlines his key tips for managing money in uncertain times. “Beware of the credit card — banks charge outrageous interest on credit card balances. While it’s great to have a line of credit, if you’re paying back up to 18% interest on the outstanding balance, it’s going to add further financial strain on you.”
In addition, he lists creating a household budget — the foundation of any sound financial plan. “You need to know where your money is going. Make sure you plan your meals and shop accordingly to avoid unnecessary expenditure.”
Doing a tax return also makes sense — have you claimed back available tax relief on medical expenses? Did you know you can review the last four years? “If you are married and on a reduced salary, it may be possible to reallocate tax credits. I would recommend engaging with an accountant or tax adviser on this.”