Tag Archives: #financialplanning

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20 Ways to jump start your financial future

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The cost of living crisis is changing how we manage money. The following is a comprehensive list that includes some starting points, as well as some more complex strategies, for those who want to jump start their financial future and make a long-term commitment to financial success.

Improve your financial literacy

Don’t know much about managing your money? The Competition and Consumer Protection Commission provides impartial and comprehensive information to help you make the best financial decisions for your needs covering saving and budgeting, interest and debt, investments and retirement, and more.

Start a money journal

Explore your attitude towards money, your hopes and fears and your dreams for financial success. Doing so can help you crystallise your long-term goals so you can make a plan for the future.

Write down your long-term life and financial goals

Include them in your journal, along with a timeline for achieving them.

Reconcile your bank accounts

Check your bank account debits against the payments you’ve made, and make sure any pending bills are either paid or scheduled.

Compare interest rates for savings accounts

This is a perfect place to start building or expanding your emergency fund. While you’re at it, commit to saving a specific euro amount or percentage of your income each month.

Make an extra credit card payment

If you carry a balance on your credit cards, start paying down the card with the highest interest charge.

Determine your net worth

List your assets (what you own), estimate what each is worth and add up the total. Next, list your liabilities (what you owe), and add up the outstanding balances. Subtract your liabilities from your assets to determine your net worth.

Estimate how much money you need to retire

Wondering how much money you need to live comfortably in retirement? Use a free online retirement calculator to figure out a rough estimate. This is one to try.

Organise your important household and financial accounts

Would your loved ones know how to run your household or understand your last wishes if you became sick or injured, or died suddenly? Start organising your important documents and accounts, store them securely and share their location with a family member, financial planner and/or solicitor.

Create a budget and track your spending

To get a handle on where your money is going, try creating a budget and tracking your spending.

Automate your savings and investments

One of the least painful ways to save and invest is to automate the amounts you want to set aside each month, so you won’t be tempted to spend them.

Contribute to a retirement savings plan

If you don’t have access to a government or company pension, consider setting up your own retirement savings account. If your employer offers such a plan, consider your options for enrollment, and make a plan to participate in the programme.

Shop for insurance

Plan to purchase insurance to protect your assets in the event of an unplanned occurrence or death. Types of insurance coverage include health, life, income protection, serious illness insurance.

Look for ways to lower your monthly bills

As contracts for things like your mobile phone, cable service or utilities expire, do some comparison shopping to see if you can reduce your monthly spend. You may even be able to negotiate a lower rate with your current provider.

Create or update your will

If you have a will already, take the opportunity to review and update it as needed. If you need a will, schedule an appointment with a solicitor or appropriate estate planning professional to create one.

Make some extra money by selling unwanted items

Looking for a way to reduce clutter and make some quick cash? Explore the many online tools for selling your unwanted Before doing so, be sure to review secure ways to handle payment and delivery, and research common scams.

Create a personal document retention policy

Learn how long you should keep important paperwork, such as contracts, loan documents, tax returns or account statements. Create a system to purge documents you no longer need, and scan and save the ones you need to keep.

Talk money with your child

Does your child understand the concept of saving money? Help your child open a savings account and understand the basics of paying bills and building credit.

Start a 3rd level education savings fund for your child

While the average cost of sending a child to primary and secondary school might seem high, the expenses associated with third level education are in a different ballpark, with accommodation representing a substantial average annual cost. One measure families can take to help avoid putting their households under financial pressure is to ensure early planning around their children’s education, adopting measures such as early life savings schemes.

Make an appointment with a CERTIFIED FINANCIAL PLANNER™ professional

As the standard of excellence for financial planning, the CERTIFIED FINANCIAL PLANNER or CFP® certification helps the public identify financial planners who have met the rigorous competency, ethics and practice standards necessary to engage with financial planning clients. In addition, CFP professionals pledge to place their clients’ interests first, an important point for those looking to build a long-term, trustworthy relationship with a financial planner. If you are looking to talk to a CFP, then please just contact Daragh at Coleman Financial Planning.

Source: www.fpsb.ie, September 2022

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Investing in Challenging Times

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Having weathered a global pandemic over the last 2 years, you’d think we’d be due a bit of good news for a change. Unfortunately, 2022 will be a tough watch when the producers of Reeling In The Years get to work on their latest instalment. We are still investing in challenging times!

Rising interest rates, spiralling inflation, astronomical hikes in fuel prices and most tragically of all, Russia’s brutal invasion of Ukraine, have all been constant features in our daily news.

So, with so many economic and geopolitical issues going on is it any wonder, I am being asked regularly, is now a good time to invest?

The reality is that at any point in the last 200 years of the stock markets existing there has always been a reason not to invest.

Time IN the Market

The key to investing in challenging times is to remember that it is ALWAYS about time IN the market and not about TIMING the market.

The more time you apply to an investment, the lower the risk it becomes.

Making short term predictions or investing based on a ‘hunch’ is no different to walking in to Paddy Power and placing a bet.

Short Term Option

For individuals with money on deposit you will not be surprised to learn that the banks are not going to pass on the forthcoming interest rate hikes for quite some time. With inflation currently at a 30-year high, the real value of your savings is losing money.

Having said that, everyone should have at least 6 months net income on deposit. They should also have funds to cover emergencies and future large spends such as holidays, home improvements or family education costs for the next 3-5 years.

Don’t bother shopping around for a decent rate, your money on deposit is there to be accessible and secure not to generate growth.

Medium to Long Term Option

For those with savings that are not required in the short term or you want to have the funds 5 years from now you need to commit your money to an investment that will generate growth.

Long term consistent growth can only be achieved by investing in the great companies of the world. That is through stocks and shares or equities. The portion of your investment in equities should be linked to your comfort level and attitude to risk.

Diversify, diversify, diversify!

Applying time to your investment is one way to manage risk and generate growth. The other is to spread your investment across different asset classes.

A balanced investment will generally invest 50%-65% in global shares with the remainder spread between bonds, property, commodities, and cash.

Even within a balanced portfolio most funds will be invested in over 500 companies. So you are never putting all your eggs in one basket.

Be Disciplined – Stick to the plan

The final and most important component of investing in challenging times is to be disciplined and stick to the plan.

It is quite natural to want to cash in or step out of your investment during periods of volatility. History has taught us that a bell doesn’t ring when the market bottoms out. By attempting to invest when you think ‘the coast is clear’ is likely to result in you missing out on some of the days that deliver the strongest returns.

Seek Advice

Your investment should be structured around your needs and your risk tolerance. It should be viewed as an important element of your overall financial plan. For that reason, it is important to seek out advice. An impartial professional advisor will work with you throughout your investment journey.

To discuss the investment options that are the right fit for you just get in touch with us here.

 

Source: Charts from Dimensional Fund Advisors 2022

 

 

 

 

 

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An Investment Savings Plan to meet your future needs

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Many of you will have heard me talking about the 3 Savings Pots you need to have.

Saving for a future financial commitment such as 2nd or 3rd level education fees makes perfect financial planning sense. For the purposes of this article I’m going to focus on Pot 2 – The Medium Term Savings Plan.

A recent survey carried out by Zurich Life estimated that the average cost of sending your child to college is €6,178 per year.

And if the students are studying and living in rented accommodation the annual cost goes up to €12,109.

Eye watering figures when you look at them!

The solution to all financial challenges is to plan ahead and save regularly.

Saving money on deposit is fine for the short term. But with deposit rates at close to 0% p.a. and inflation currently around 5% p.a. the real value of your savings is being eroded.

However, if you commit your savings to an investment plan, you can benefit from steady, consistent growth over the medium to long term.

You can select a plan that is suited to your attitude to risk and your ability to ride out the short term periods when investment markets are rocky.

Using the example of a family saving to fund their two children (currently aged 10 & 12) going to college, the following savings would be required.

The investment saving plan can also be boosted by adding a lump sum at the start to reduce the monthly commitment or reduce the amount of years you need to invest for.

The key to having a successful investment savings plan is to;

  1. Know how much your savings goal is
  2. Select an investment profile that you are comfortable contributing to
  3. Stick to the plan

For more information on how to start your investment savings plan it is important to seek impartial and professional advice that is tailored specifically to your needs and experience. Just get in touch if you’d like to have a chat about your savings pots.

 

 

Please note source of all figures and charts above is Zurich Cost of Education in Ireland survey 2021. The figures quoted are based on the following assumptions;
  • Your dependant starts college when they are 19 years old.
  • Each dependant spends 4 years in college.
  • All dependants are assumed to have the same living arrangements while in college.
  • Student Accommodation is accommodation provided by the college whereas Rented Accommodation is privately rented accommodation.
  • We have allowed for inflation for all of the College Costs in the table above of 1% per annum from now until the first year that college starts.
  • No single contribution has been included in the estimated figures above.
  • The regular contribution per dependant ceases once that dependant starts college. The savings term for each dependant will vary.
  • We have allowed for an annual management charge of 1.25%, a regular contribution allocation rate of 101% and no surrender penalties, all of which may change. These assumptions are based on a standard charging structure.
  • A government insurance levy (currently 1%) applies to this policy. The contributions above are inclusive of this levy.
  • Your monthly contributions are assumed to increase by 1.5% each year from now until your dependant starts college.
  • For savings terms of 5 years or less we have assumed a gross investment return of 4.30% per annum on your savings. For savings terms greater than 5 years, we have assumed a gross investment return of 4.40% per annum on your savings. This is not a forecast because the value of your investment may grow at a faster or slower rate than assumed and the value of your investment may be expected to fall from time to time as well as rise.
  • We have assumed that on death, encashment, partial encashment or assignment of the policy or on each 8th policy anniversary, tax is deducted on the gains made at the current rate of taxation, being 41%.

 

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What happened to the pension in my old job?

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Clients ask me this question regularly when we meet. So what does happen with your old pension?

We are often solely focused on a fresh start and looking forward when we move job. We neglect to address what we’re leaving behind – our own pension funds!

What you are allowed to do with your existing plan can vary. This depends on the structure of the pension scheme. You may be entitled to leave the funds in the scheme until you reach retirement age (normally 65) however there are other options that will allow you take control of your pension fund, control how you invest it and control when and how you draw it down.

For example you can transfer it into a:

  1. Pension plan with your new employer.
  2. Personal Retirement Savings Account (PRSA) and continue saving in to it.
  3. Personal Retirement Bond (PRB) and access it from the age of 50.

Like all important financial planning decisions, your individual goals and objectives will determine what option is best for you.

As a starting point you should seek out independent advice from a trusted advisor.

So if you’re wondering what you do about your old pension, get in touch with us today at Coleman Financial Planning to discover what option suits you best.

Make a start on giving yourself the retirement options you deserve!

 

 

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Why saving for education is so important

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Saving for education, it’s something that we often put on the long finger. There are so many other priorities, especially when children are small. But there’s lots of reasons why saving for education is important. And it’s never too early to start.

Recent research showed that over a third of Irish parents had no savings in place for their children’s education. It was estimated that the annual cost of sending a child to college could be between €5,000 and €10,000 a year and even more if they are living away from home. That’s a substantial sum over a number of years of third-level education, especially if you have a couple of children.

We all want to give our children the very best in life. A good education is part of that. It may seem early to start but time does fly. As part of your overall financial plan, you can look at how to start putting a little aside regularly to cover future education costs.

There are lots of investment savings plans available for anyone looking to start saving for education. These range from low-risk investments to more adventurous options.

The first step to selecting the right one is to talk with a professional adviser who can tailor the right solution for your needs.

If you need some help in getting started, we’d love to hear from you, just get in touch.