Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk with Aviva Insurance. Now, if your money often runs out before the end of the month, you might want to feel a little more in control of your finances. Well, help is on hand to do just that because I'm joined by the Director of Financial Planning at Finero Financial Advisors, Carina Dwan. Carina, you're very welcome. Thanks for coming in.
So what are the basics here when it comes to managing your money month by month?
OK, I think there's a few things that people need to do. I'm a big fan of writing down where your money goes, because I do think it has, when you look at it on your phone and you're scrolling through, I don't think it has the same impact as if you actually take out the pen and paper.
So I think the first thing about managing your money is actually knowing where it goes and where it really goes, not where you think it's going. The amount of people that I've met throughout the years that would say to me, oh, no, I'm very good with my money and I don't spend that much, but yet they've nothing left at the end of the month.
So take out a bank statement from last month and write out what's coming in and what's going out. And then you start to kind of build a picture, you know, even get a few different highlighters or something. And, you know, your needs are your things like your mortgage, your rent.
you know energy we've just been talking about that on the programme so they're the kind of things that we need to have your food shopping okay and then start identifying okay what are the things that are nice to have but they can sometimes be the first thing then that you can establish that maybe I can pull back on them
A lot of times when people talk... Now, we don't want people to be miserable either.
The nice to have things are important too, aren't they?
Yes, I was talking to one of the girls outside and I was saying, I'm a big believer in buy the coffee, you know, because things are tough at the moment. And for some people, it's tougher than others. And for some people, especially with remote working, they mightn't get to talk to many people during the day.
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Chapter 2: What are the basics of managing your money month by month?
You know, a lot of people, when they take out the mortgage, they're so... You know, they're concentrating so much on what is going to be the rate and then it begins to roll over. And you'd be surprised at the amount of people that don't actually look at these things. We all, myself included, we paint this picture of how perfect we are and we keep on top of things.
But when we actually start again, go back to it, writing it down, that's when you can really identify, is my money going to the place?
that I wanted to go to and also when you're spending money it's do I want to be working for something I'm paying for it out of my time that I'm using to work so again back to the mortgage like if you could save 0.25% we'll say on a mortgage rate you could end up saying saving a thousand euros in the year for example okay significant It's a big amount.
And when you think about that, the amount of work that you have to put into it, so you gross that up, we'll just say to 2,000 euros.
Chapter 3: How can writing down your expenses help with financial control?
For some people, that could be two weeks of work. And all, not saying it's a simple thing, but like it does take that call to your broker or to your bank. to start that change happen. But it's two weeks of work that you're saving.
The other thing as well is claiming back, if you can, on your tax and things like the renter's credit, which was introduced in recent times by the government. But the take up of that was quite low. Now, I know it's complicated and you have to get your landlord involved to sign forms and so on. But it is so worth doing it, isn't it?
Oh, 100%. And if you go on to revenue in my account, it's actually revenue are great. They're very efficient. So they are. And the system is actually really, it is quite easy to use. So it is. But you can go back for the past four years. If you can claim that back again, there could be a few thousand euros.
Also, depending on where you're employed, you might be able to get allowances for like uniforms, stuff like that, your medical expenses. And don't look at it as, oh, it might just be 20 euros or 30 euros or 40 euros. These things add up, especially if you haven't done your tax return over, you know, that four year period.
Mm hmm.
It could be, you know, money that you can put aside for going back to school in September or for holidays or for Christmas or something like that.
Which makes life easier down the line. You're being kinder to your future self. Exactly. So when you look at people spending, when you get them to write down where the money is actually going, what is the biggest sort of area of flittering away the cash, would you say?
I think it comes down to people's personal habits. So I would, you know, meet people and I know people that late at night they're scrolling and they're buying online. 10 o'clock purchase. So it's hard to kind of say what are the common things because, you know, as we said, you have to have enjoyment in your life.
OK, but when things get more difficult, it is about identifying where can I make the changes? So things like, you know, your food shopping. Some people will go in, we say we buy with our eyes. We're looking at the shelves. There's all these great offers and, you know, two for one. Do you need two of whatever is two for one, you know, or is it just going to sit in the back of the shelf?
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Chapter 4: What are the essential needs versus nice-to-have expenses?
You're paying 20 euros a month and you've never used that station again. So they're the kinds of things.
OK, now the pension then and what people need to do in that regard. So you mightn't have much left at the end of the month, but if you can tighten up your spending, you'd be as well putting that off into putting that into a pension, right?
Yeah. So it's back to one of your earlier points about, you know, you're looking after your future self because we are in, I suppose, we call it a crisis. It's probably just going to become normal life the way the prices are increasing. And that's not going to go away when we hit retirement.
So for people, you know, renting into retirement is going to be a new thing, I think, for people going forward. So, yeah. Pensions are really, it's a long term savings account where you get really good tax relief. So if you can put in 100 euros a month, the government will give you back if you're on the higher tax rate, either 60 euros or if you're on the lower tax rate by 28 euros.
So it's a really good way of saving. I know going back to 2007, people were very, you know, there was awful stories about people losing all their money. But I would say to people, you are protecting yourself for the future so that you have that money there for you to pay the same kind of expenses that you're paying today.
It's huge. Hugely important. So I know you said that buy the coffee, that that's your little luxury. But if you are doing it three times a day and not paying 100 euro into your pension, you might have to look at what you're doing there.
Yes. Well, I think if it's three times a day, there's a few issues there. So there is. But no, definitely. It is about looking at all the different kind of, you know, do you have enough money for now? Do you have that kind of rainy day fund? That's super important. So it is. And then look into the future.
Yeah.
And there are like the three pillars. You have your state pension. We also have auto enrolment now and a lot of people will have a private pension as well. And it's really, again, about finding out what you have. And if you're happy that that's going to be what you have to live off in retirement, that's great. You don't need to do any more. But for most people, it's I know I have a pension.
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Chapter 5: How can reviewing your bills lead to savings?
Where do I maybe need to look, pull back on or can I pull back on certain areas? Know where it's going is the advice. That's exactly it. Yeah, I think that's what it comes down to.
Carina, thanks so much for coming in. Carina Dewan there, Director of Financial Planning at Finero Financial Advisors. Thank you for being with us. The Clare Byrne Show. With Aviva Insurance. Weekday mornings at 9. On Newstalk. Conversation that counts.