Happy New Year! Christmas is over and it is time to embrace the blank page that is 2018, writes Gráinne McGuinness.
If you have big plans ahead for this year, best of luck with them. Big plans can often mean big financial adjustments, and if yours fall into that category, it is never too soon to get started.
If you are hoping to buy a house this year, you are probably saving already but, if not, start. First-time buyers generally need at least 10% of the property price as a deposit before getting a mortgage, for almost everyone else it is 20%. Aside from showing steady savings you should also clear down as much other debt as possible. Any loan repayments you have will reduce the repayment amount the bank will allow, clearing car and personal loans will allow you to borrow more if needs be.
You should also make your finances as clear as possible. By that, I mean making all your income and outgoings clearly visible on your account. If you pay rent in cash or give money to your parents for staying in the family home, change it to a regular payment between accounts. It helps to establish a repayment pattern. If you tend to save in dribs and drabs as you can afford, try to regularise it to a weekly or monthly payment. Do some rates research
online rather than simply applying to whatever bank you have your current account with, competition in the mortgage market is increasing so you may do better elsewhere.
If your new year is coming with a bundle of joy, then brace yourself for a tsunami of change, particularly if he or she is your first baby. Irish parenting site mummypages.ie estimates that a baby’s first year can set parents back about €4,000. This includes the cost of nursery furniture, car seat, pram, clothing, and food.
Families also need to plan ahead for childcare costs, particularly if both parents are working full-time. Aside from immediate costs, new parents should also need to reassess their long-term financial plans once they begin their family. Consider making an appointment for a financial planning session, either through your bank or with an independent financial adviser. Life cover should be upgraded for both parents.
A common mistake is to focus on earnings only but the contribution of a parent who stays at home is hugely valuable too. A recent Royal London survey found 29% of those surveyed predicted the yearly value of employing someone to do similar work to
a stay-at-home parent to be within €20,000 to €30,000.
However, comparative cost- analysis research reports the average pay for this job could be more in the region of €42,000 a year.
Parents should also consider starting long-term savings to cover education and other costs down the line. An Post have savings options geared specifically to the children’s allowance or you can discuss other long-term options with a financial adviser.
Tackling existing issues can be as dramatic a change as new life events like buying a home or starting a family. If you are struggling with debt and are determined that 2018 is the year you get on top of it, don’t feel you have to do it alone. There are organisations out there ready and able to help, and the Money Advice and Budgeting Service (Mabs) service should be the first port of call. Not everyone even needs to attend its service. It has a number of online budgeting tools at www.mabs.ie and a helpline available from Monday to Friday, 9am to 8pm at 0761 07 2000. Mabs says many clients can negotiate with creditors themselves with the help of these resources alone.
If you prefer to sit down with someone you can make an appointment to attend for free and confidential expert advice. Before your first appointment you can expect to be asked to write down as much as you can about your current circumstances — who lives with you, what income is in your home, how you spend money, regular bills, and what debt you are carrying.
Mabs has a new service, Abhaile, to help homeowners struggling with mortgage arrears. Dealing with debt is stressful and exhausting, so don’t feel you have to do it alone.
Deal of the week
I wrote recently about the importance of home insurance and new figures from www. insuremyhouse.ie suggest homeowners can save hundreds of euro on policies.
The home insurance experts have run some numbers which show that Irish banks, where many people get home insurance as part of the mortgage process, can charge higher premiums than those which brokers can secure. In five cases, the range was €131 to €357.
Deirdre McCarthy of insuremyhouse.ie said: “Home insurance is one of those areas where you can pay a lot or a little for the same product. January is popular for home insurance renewals, so now is the time to get your affairs in order”. Insuremyhouse.ie offered tips on how to get the best value. Most insurers will offer discounts for those with alarms and/ or monitored alarm systems. Increasing the excesses on your policy will invariably reduce the premium cost. Check policy ‘add-ons’.
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