Last week, Munster-based financial adviser Carol Brick offered three steps individuals and families can take now to start 2020 in a better position.
This week, she is following on from that with additional advice for a cohort who I believe are particularly inclined to put financial planning on the long finger - families with children and teens.
While acknowledging that the maelstrom of work, school, sports and other extracurricular activities leaves time for little else - what should families prioritise?
“Let’s face it that once you have a family, your financial matters change dramatically,” Carol says. “Prior to now, you may not have thought about your finances frequently but all that suddenly changes with the arrival of kids.
“Suddenly you are presented with definite, sudden financial needs to address. By spending time assessing on those needs today, you will give yourself a head start on meeting some crucial family financial objectives tomorrow.” Carol highlights a number of priorities, starting with the cover you have.
“If one or both of you cannot work and earn income due to illness or injury, your household could struggle to meet all of its basic expenses including education, medical expenses, or even paying the basic household bills,” she says.
Income Protection Cover and/or Serious Illness Cover will provide some financial support in such an instance. Some employers do provide an element of sick pay but that may prove insufficient and only lasts for a short term.
“Even if we look at the startling statistics relating to cancer alone in Ireland - by 2020, 1 in 2 people in Ireland will develop cancer during their lifetime. You need to ask yourself in the case of serious illness knocking on your door, could your household continue on only a fraction of its current income? If the answer is no, then seek immediate financial advice.”
Next up is a task many of us hate even thinking about - estate planning. We might not like it but Carol believes it is never too early in life to consider it.
“Putting a will in place is a very smart move, especially if you have children,” she says. “By doing this, some of the many advantages would be that you are ensuring that your dependents are provided for financially, you are protecting your partner if you are unmarried, and avoiding any possible family disputes later etc. The process of putting a will in place is neither expensive or too time consuming so there are no excuses not to have one.”
Another area where families need to get started as early as possible if planning for college costs.
“When all costs are considered including fees and accommodation, the [cost of sending a child to college], which I’m sure most will find completely startling, is that it could be as high as €60,000 in total,” Carol says. “And don’t forget this is per child.
“So, the message is very clear: Start saving now. If you could possibly start by saving your monthly children’s allowance and invest it in carefully chosen Unit Linked Investment Plan, you will have a much better chance to meet those future costs.” I asked Carol what common mistakes does she see families with children make, or what important areas they neglect?
“We find that too many parents are not taking the time away from their busy schedules to take proper advice and put a well thought out family financial plan in place,” she says. “It is well worth the few hours it can take and you will be living the benefits of it for years to come.
The sooner you take control of your money and your financial future, the sooner you’ll benefit. We recommend to always speak to a financial adviser.
The main thing is to START now – don’t put if off any longer. The sooner you take control of your money and your financial future, the sooner you’ll benefit.
Deal of the week
It is unlikely you have missed the eye catching ads for GoMo - which bills itself as Ireland’s newest and best value mobile phone plan.
But the dayglo colours and energetic dancers may have inclined viewers over the age of 20 to tune out and possibly miss out on what looks like a very solid deal.
The plan, which is on the eir network, says it will give you all the data, calls and texts you need for €9.99 a month. This is not a time-limited introductory offer, that is the long-term price point.
They describe the call, text and data allowances as limitless but fair usage applies. The limits are high though - 45,000 minutes of calls, 10,000 SMS and 80GB. For most phone users that will be more than enough, it is hard to imagine ever breaching the calls and text limits. For very heavy users of data, Gomo says it may ‘limit the data service’ if it is in excess of the fair usage and affecting other users on the network.
Get full details at gomo.ie.