The big idea is to map out a spending and savings plan

Whether or not you make financial New Year’s resolutions, you no doubt want to improve your finances in the coming year. And a quick review of the last decade may help us shape decisions for the next one.

The big idea is to map out a spending and savings plan

Whether or not you make financial New Year’s resolutions, you no doubt want to improve your finances in the coming year. And a quick review of the last decade may help us shape decisions for the next one.

We finished the year with the pantomime that is Brexit and we have some sort of certainty about what the neighbours across the Irish Sea are doing. It poses challenges, particularly for exporters, but at least there will be some clarity by the end of January.

Ireland is coming into 2020 in relatively good shape: It has been one of Europe’s fastest-growing economies for the last five years and employment is expected to rise again this year, although at lower levels than previous years.

Yet, there are many people on the ground who I speak to who are not feeling the economic growth.

Wages may be rising but many people are struggling to balance their monthly spending, as rents and house prices rise.

There are some simple methods we can use to bolster our finances.

These include budgeting in January, to checking up on insurance coverage in April and reviewing retirement plans in October. The big idea, however, is to map out a spending and savings plan.

Budgeting may seem like a bore, especially in the middle of winter but rather than think of it as a financial killjoy, view it as a way to ensure of having enough money to enjoy.

One way to navigate the drain on finances is to set aside a reasonable amount every month from January, just for next year’s Christmas and New Year spending.

Then the focus can be put on long-term goals, such as saving for a house or retirement.

I suggest to my clients to keep their essential expenses, such as for the mortgage and rent, utilities, insurance, and groceries, to about 50% of their spending.

Dining out, TV and leisure should account for no more than 30% of spending, with the final 20% slice should be for savings for a variety of things, including for children and retirement.

Credit cards should be avoided because, unfortunately, most of us fall foul of the high-interest rates they charge on a monthly basis.

Track everything in lists such as things you would like to buy.

When it comes to your finances this is especially important, and writing out goals can help us accomplish them.

Claiming tax back can bolster finances. Although some tax reliefs and credits have been abolished in recent budgets, there are still reliefs available, including medical fees; renting out a room in your home; pension and income protection plans; mortgage interest; and fees paid for approved third-level courses.

Revenue’s website www.revenue.ie provides a full list of tax reliefs available. The simplest and most underused tax tool is the small gift exemption, which allows parents, grandparents and rich aunts to gift children up to €3,000 free of tax.

Looking across the Atlantic, the US economy is performing very strongly.

There has been an unprecedented decade of growth in stock markets, with the US stock market reaching record highs under the impeached US president, extending the longest bull run in history.

Finally, this is the time of year I tell clients to make or update their wills— according to Irish Life, most people do not have a will and less than half have not updated their will in the last two to five years.

Nick Charalambous is managing director and financial advisor at Alpha Wealth in Cork and Dublin.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited