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Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk. With Aviva Insurance.
Now we have a question for you, because according to a new survey out today, one in five people in Ireland would run out of money within a month if their income stopped overnight. So just think about that for a minute. How would you be able to survive if your income stopped for a month? Because people in their 30s and 40s we hear are most exposed.
A quarter of them could only last one month without their wages. So Henry McKean has been looking at this for us and he is here.
Chapter 2: What does the survey reveal about financial stability in Ireland?
Hello, Henry. Hello.
Good morning, Claire. And you're right. People are broke. They are struggling. And this new research from Royal London Island, they specialize in life insurance and pensions. They say just under six months is the average length of time people believe they'd be financially stable following a halt to their income. And men report a stronger financial buffer than women. I'm not sure why that is.
I think it's because... men don't realize how expensive groceries cost. 20% say they could only last less than one month if their regular income stopped tomorrow. And 25% say they'd manage for three months at most. I met these people of all ages and backgrounds, and I asked them, if their income stops tomorrow, how long could they last on their savings?
If I lost my job tomorrow, I tell you now, it'd be pretty hard. You just have to survive it and struggle through life day by day and just pray to God that a bonus has come to me or something. Pray for a miracle.
Chapter 3: How long can people in their 30s and 40s survive without income?
So pray for a miracle and as somebody said to me the other day, as long as you have breakfast in the morning, you'll be okay.
As long as you have breakfast. But you need food. You always need food. And you need food all the time. You always need food. You do indeed. To keep everybody happy. To keep everybody fed.
This is a personal question. Right. How much money do you have under the mattress or in your bank account right now?
Well, I have about eight euros in the credit union. That's the truth.
You're 40. If you lost your job tomorrow, how long could you go for? How long could you pay for bills, pay for your accommodation, pay for all your expenses?
Not long at all. A couple of months, I'd say. If you had no income, how long could you survive? Two weeks at the most. You know, you need an income to fare groceries, for different stuff in life, you know. Do you have any buffer?
Do you have any savings?
None at all, no. I don't have any savings at all. I lost my sight a couple of years ago and lost my job and had to use my savings, you know.
And can I ask you how you lost your sight?
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Chapter 4: What are the views of individuals on their financial buffer?
Well, I wouldn't say blue chip or gold plated, but definitely I'd be protected for a while. But I guess the state pension won't stop.
So the state pension will continue and you have your private pension and you've enough?
I've enough. I'd cut my cloth, I'd go on the beans and toast if anything changed.
Do we all need to do that, go on beans on toast, because prices are so high? And even people who are working are struggling to even get by. I do.
I think the prices have definitely gone up, but I suppose there are ways of... eating cheaply, however electricity and all that has gone up quite a lot so that really has an impact and if you have young families it's horrendous.
You're a civil servant, how long could you go without an income? How many months could you last?
Not even six months, like, you know, you'd have to be different into your savings and that's kind of it.
So you could do six months, that's something.
Okay, maybe. So you'd be able to pay the bills.
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Chapter 5: How do personal circumstances affect financial stability?
How much should you have in your buffer? If you've got a maybe two-income household that's really steady income, probably three months take-home pay will be enough.
But if you've got a one-income household and that income is quite erratic, maybe you're a freelancer, you work on projects and you get paid a lump sum and then nothing for months until the next project finishes and you get another lump sum, then you should have six months take-home pay in your buffer. And people go, three months? Six months? Sure, I'll never get to that. You will eventually.
But... there's good news. There's a piece of research out there from the US that suggests that just having $500, let's turn that into euros for us, just having 500 euros in your buffer is enough to dramatically turn down financial anxiety. Having 500 euro in a buffer is enough to help you turn over and go back to sleep when you wake up at two in the morning worrying about money.
A buffer is the key. It's the cornerstone. It's the foundations of being good with money. But not only that, it's also the key to turning down the volume on financial anxiety. Get the buffer in place and you'll have the short-term problem sorted out. Beyond that, then you have to start thinking about what if something major happens? What if I'm out of work, long-term sick?
That's where the things like insurance has come in. Get some advice on that one.
Owen McGee there and his buffer advice. Thank you very much, Henry, on that report on how you'd cope if your income stopped tomorrow. If you've had a think about it and you've wondered how you'd get through a month or more, do let us know.
087 1400 106.
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