To gain a better understanding of your money, ask yourself these questions:
1. How much do you earn and spend each month/year?
Know what’s coming in and what’s going out, including where it’s going. How much are you putting towards fixed expenses versus fun spending (needs versus wants)? Use our easy personal money planner to help you on this.
2. What’s your current net worth?
The amount left over after adding up your assets and subtracting your debts. Also, consider which debts are good versus bad.
3. How is your credit profile?
You can get a free copy of your personal credit report from the Central Credit Register (www.centralcreditregister.ie) or pay for a copy at the Irish Credit Bureau (www.icb.ie).
4. What are your short-term and long-term financial goals?
“If you fail to plan, you plan to fail.” Knowing where you want to be short-term (1-2 years) and long-term (3+ years) is the first step toward getting there.
5. Are you maximizing the tax-relief benefits of savings in an of the many pension options
Putting your money to work for you without sacrificing flexibility is a win-win. Listen to our recent article on RTE radio on this topic (2nd article on list).
6. If you have children, how much are you saving towards their future education costs?
Third level education costs between €7,000 and €12,000 per year per child. Are you saving and are you saving enough to cover this cost?
7. Do you have enough money in your emergency fund?
Three to six months-worth of living expenses is a good starting point for an emergency fund.
8. Are you taking advantage of available tax reliefs?
Good tax management helps you keep more of your money in your pocket each and every month. But a lot of Irish families fail to take advantage or claim back taxes owed to them. Get familiar with how the system works and how to put more money back in your pocket.
9. Do you have an updated will, power of attorney and beneficiaries named?
Having a will in
place is just the beginning. You should update it along with every significant
life change (marriage, divorce, birth of children/grandchildren, etc.).
10. Do you have the sufficient insurance coverage?
If you have dependents (spouse, children or otherwise), planning for the unexpected is crucial.
Life, illness and disability insurance can offer peace of mind.
Personal financial planning does not have to be a complicated process but you do need to begin somewhere. MoneyWhizz provides a range of options to help you begin. You can use our online or downloadable budget planners to get you on your way and make the best financial decisions for your financial well-being.
Frank Conway is a Qualified Financial Adviser and Founder of MoneyWhizz