Re-Energise Your Finances Top 10 Tips by Eoin Wilson

After spending 12 years in Financial Services industry, Eoin Wilson set up his own firm, Pure Finance to provide financial planning and to help customers set up financial products in a jargon-free, completely transparent manner. The services that Pure Finance provide are as follows: Pension Planning,  Group Schemes,  Financial Planning,  Investment Advice,  Life Assurance

For further information contact eoin@purefinance.ie or 0867954972 or www.purefinance.ie

Now that the new year is upon us, Gym Memberships have sky-rocketed, and everyone is on a new diet. The most important element of a New Year Resolution is to ensure they’re sustainable and that they don’t only last a month or two. To improve your finances, there’s an element of adjusting your behaviour as this will have a big impact and to make small continuous changes.  In Japan they call this ‘Kaizen’ (small continuous improvements).

These are my top 10 tips for 2020

  1. Review your own Personal Finances, Income and Expenditure

Figure out where you’re spending. I have found that over the years many business owners know their running costs and income needed to sustain their business.  However, they are not as prescriptive when it comes to their own personal finances.  Now is a good time to review your annual spend, and to figure out your fixed costs and variable costs.  This is important as you’ll be able to see how much you’re able to save.  There are many automatic ways to assess your spend.  By opening a Revolut account you’ll be able to see where you spend your money.

  1. Clear your Most Expensive Debt First

Aggressively clear your most expensive debt first and pay off all credit cards.  By paying off your most expensive debt first you’re saving the most interest. Important to draw up a list of all your debts and categorise by interest rate to see which is the most expensive debt.  Also assess to see if you’re able to re-structure your debt.

  1. Review your Mortgage

Mortgage rates have been put under pressure over the last couple of years.  A good way to improve your overall cost of living is to see if you can get a better rate with your current provider or elsewhere.  Don’t be afraid to shop around, and sometimes banks will offer an off the market rate.  Don’t be fooled by cash backs.  Go for the lowest rate always (e.g. Mortgage for €350,000 with a purchase price of €500,000, can get an interest rate of 2.30% 2 year fixed with KBC, source BIS)

  1. Pay a Lump Sum off your Mortgage each year

One of the best ways to reach financial freedom quicker is to clear your debt.  For example, a mortgage of €350,000 over 30 years, with a 3% interest rate will cost you €1,475 per month.  Total interest paid €181,219.  If you changed this to a payment term of 20 years, your payments would be €1,941 and total interest paid would be €115,861.

  1. Pay Yourself First

Make saving a priority.  Most people pay all their expenses and whatever they have left over they save.  Important to reverse this and make your savings a priority.  Make sure you save every month into a savings account and/or retirement account and you will get wealthier over time.

  1. Automate your Finances

Make automatic deposits into your investment accounts at pre-determined times, i.e. at the start of the month.  This is beneficial as you will get used to setting aside this amount, but also you will take advantage of Euro cost averaging.  You will buy into the stock market when it’s at a low price and when it’s at high price

  1. Start Investing in the Stock Market

Set up a mutual fund which will allow you to invest in the stock market.  Shop around and try to get into a fund that suits your risk profile.  Some of the better performing Mutual funds achieved over 20% last year.  (Zurich Balanced Fund)

  1. Start Investing in a Pension

You’re never too young or too old to invest in a Pension.  The younger you are the better it is to invest in a Pension, due to the beauty of compound interest.   The State Pension is now 67 and will be 68 from 2028.  A pension is still one of the best ways to fund for retirement, with tax relief at 40% for higher income earners and tax-free growth on contributions paid.  Company directors also have the added advantage of max. funding and being able to take early retirement if they require it.

  1. Claim all Reliefs

Surprisingly many people are still not maximising their tax back and claiming back relief for medical expenses. 20% can be claimed back on all prescriptions and doctor visits. This is done by completing an Income Tax Return.

10        Review your Current Providers

Review who you’re using for Electricity and all Bills. Many electricity companies use inertia to make money out of their customers in the second year.  www.bonkers.ie will help you assess to see who’s competitive.  Review all your financial payments to see if you can save money.  A useful website for health insurance is www.hia.ie.  Review your banking charges, certain banks have started increasing their annual charges.  However, there are online banks such as Revolut who are often more competitive.  Lastly re-visit your Life Cover and Pension, and make sure you’re getting good value for what you’re paying for.

Please note this article doesn’t constitute financial advice and represents the personal views of Eoin Wilson. Pure Finance Ltd is regulated by the Central Bank of Ireland.

Eoin Wilson is a Certified Financial Planner™ and set up his own business at the end of 2017.  He has over 13 years of experience giving financial advice.  His business is built on credibility, reliability and transparency. His business has grown by word of mouth to over 100 customers.  He specialises in helping company director’s in their 30’s and 40’s manage their money better.  He has specific expertise with regard to Pension Planning, and there is nothing he enjoys more than helping his customers reach their annual goals.

For further information contact eoin@purefinance.ie or 0867954972 or www.purefinance.ie