We all need to keep sight of what’s important. The financial choices we make should be determined by what we value most, family, financial independence, security. Regardless of where you are in life whether your single, married, divorced or widowed financial planning and money management should always be one of your top priorities.
When it comes to financial security women can often find themselves in a vulnerable position because of many factors and not all of them relating to the gender pay gap. Maternity leave, breaks in employment, working part-time and a lack of financial awareness contribute to women being more likely to encounter financial hardship, later in life.
So what’s the answer? What can you do to take control and improve your finances?
Know what you earn and what you payout
What do you earn? What is your gross pay? What is your net pay? What do you pay in tax? Do you know what tax credits and allowances you’re entitled to? https://revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/index.aspx Where is your money going? Carry out an audit of your bank statement each month/quarter and any subscriptions you’re not using consider cancelling them.
Pay yourself first
Before you pay your bills, before you buy groceries, before you do anything else, set aside an amount of your income each month to save. From the day you start working put the money into your pension or your savings account. It can be as little as €20 each month so long as the first payment you make every month is to yourself.
Do you have a savings account? You should. It doesn’t matter how much you save it’s important to have a savings account. Have a goal – a holiday, a car, your child’s education, an emergency fund. You can set up a direct debit each month after you get paid so it goes directly into your savings account.
Protect your earnings
As a contributor to the household income you should consider the risk to your family’s financial situation if you become sick or injured and are unable to work. How will you pay the mortgage, utility bills, the car loan? Your income is your most valuable asset. Too many people could find themselves financially vulnerable if they lost their main source of income. While it’s not something any of us likes to think about, we need to be realistic when it comes to protecting our income. Talk to us about your options.
Plan for your retirement
Whether to have your own pension or are relying on your spouse’s pension make sure you know how much you are projected to have at retirement. Just because you’re paying into a pension whether that is a private or company pension does not mean you will have enough. You need to review this annually to make sure it’s still sufficient for your needs. You may have to add to your pension pot, look at alternative options, consider working for longer, or downsize. Talk to your financial adviser to get the full picture and a list of viable options. What happens if your spouse pre-deceases you? Will you be entitled to their pension? If you’re divorced have you made arrangements with regard to your pension or your spouse’s pension?
Investing is really the only way to grow your money to a level that can help to provide you with your own financial security. Most deposit accounts earn little or no interest at the moment, while negative interest rates are impacting on the value and returns on standard savings. Nobody knows what the future holds so it’s important to get your money working for you to achieve your goals
Watch what you’re spending
Watch what you’re spending. Easier said than done, I know, but if you’re trying to save with a goal in mind a little self-discipline goes a long way. There are plenty of apps available to help you budget and keep track of what you’re spending your money on such as Homebudget on the app store, Moneylover and Revolut. Just giving up your morning takeaway coffee (€2.45) on your way to work can save you over €570 per year. Think before you spend, do you need it?
Get financially savvy sooner rather than later
If you start saving for your retirement in your 20s or 30s, “compounding” alone can make a real difference to your savings and won’t cost as much. You can still start saving in your 40s for a pension however to have the same amount in retirement you will need to contribute more.
Talk about your finances with your partner
It is so important to discuss your finances with your partner and make important decisions together. Don’t wait until there is an issue to be addressed. Making decisions together ensures both parties are aware of their financial affairs and should something happen to your partner you are not left in the dark about your financial situation going forward.
Get independent financial advice
Finally, it’s so important to get your own financial advice and take control of your finances. A financial planner will help guide you to make more informed decisions about your finances, keep you focused on your short term and long term goals while taking into account your current and future lifestyle. Ensure you have that financial cushion to withstand whatever life throws at you. Give us a call on 091 778677 to find out where you stand financially and what you need to reach your goals?