By Dave Kavanagh

There are many situations where homeowners have limited or no savings but may have requirements that need funding, even though their income does not permit them to commit to unaffordable, regular repayments. Imagine you’ve worked diligently to pay off a substantial portion or all of your mortgage, and you find yourself in need of additional funds due to unforeseen circumstances. A lifetime mortgage allows you to tap into this equity without selling your home. The borrowed amount, along with accrued interest, is typically repaid when the property is sold or when the last borrower passes away or moves into long-term care, so there are no regular repayments to make. There are, of course, reasons why they may not be appropriate for everyone’s circumstances. Some of the benefits include access to funds, whether it is to cover medical expenses, modifications to your home, to assist children in purchasing their own home, or any other urgent needs, no monthly repayments and ownership of your property is retained. Some of the factors to consider, include interest accrual, as interest is added to the borrowed amount over time, this may reduce the equity remaining in your property. It can reduce the value of your estate, potentially affecting any inheritance you leave behind. Financial implications: it’s crucial to understand the impact of a lifetime mortgage on your overall financial situation, including potential entitlements to state benefits. The amount that can be advanced will depend on the ages of the homeowners and the value of the property (minimum age is 60). Choosing a lifetime mortgage is a decision that should be made carefully, taking into account your unique circumstances, goals, and needs, including situations where there may be still some of your children living at home and you may have planned to leave them the home to live in after your passing. For further information on lifetime mortgages, you can email info@financialcompanion.ie and put “lifetime mortgages” in the subject line.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing Dave at info@financialcompanion.ie or use the contact form on financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial well being, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

One of the issues with planning ahead to protect you and your family’s financial future, is the fact that we don’t know exactly what the future holds. Will jobs and income change? How long will I maintain good health? Will I win the lottery jackpot in the next 3 years? The uncertainty of the future means that we often plan for a variety of occurrences. One important aspect of this planning is deciding on a term for things like Life Cover. A life cover plan can either be done for a specific term or it can be done as a “whole of life” plan. One of the problems with the old way of doing these was that the premiums were reviewed after a few years and could result in constant, substantial increases, often forcing people to either cancel them or accept a much lower level of cover. With “guaranteed whole of life” plans, you at least know exactly what the premium will always be and the level of cover but planning that far ahead can be costly. A relatively new method of dealing with this issue was introduced from one of the life companies, and it is an addition called “Life Changes Option”. This option gives the policy owners a number of choices once they have paid premiums for at least 15 years. They can then choose to either; a) Stop paying premiums and reduce the level of cover which stays in place until the cover is paid out, or b) Cancel the cover (if it is no longer required) and take a refund of up to 70% of all premiums previously paid, or c) Continue the plan as it is with the same level of cover and premiums. This option has become quite popular when people are looking to future-proof cover as it offers choices that can suit people’s changing circumstances. If they have cleared loans and have sufficient savings, a reduced level of cover might be ideal. If they have strong pensions and savings, they may no longer have a need for cover and can take back a lump sum. For more information on how this type of cover may suit you, ask your advisor or contact me for a free quotation.

By Dave Kavanagh

Considering almost every aspect of your life is connected to your finances on some level, it’s important to make time to review your budgeting, especially as it could leave you with more money left over each month.

A few practical tips:
(1) Carefully study 3 months’ bank statements. Make sure that you can account for every single transaction. On a regular basis, I encounter people who have been paying for things that they should not be, direct debits they forgot to cancel.
(2) Make a detailed list for grocery shopping (and don’t shop while hungry). This leads to only buying what you actually need, a lower bill at the till and less throwing out of food gone off.
(3) Compare before you shop for larger items. Just because one store has a fridge you want reduced from €950 to €850 in their “Sale”, does not mean another store nearby that does not currently have a sale on, is not selling the same one for €799.
(4) Compare utility providers. Whether it’s electricity, gas, broadband, mobile phone service or similar, there can be substantial savings to be had by switching to better deals.
(5) Check when car/house insurance renewals arrive. Don’t automatically accept a renewal premium without checking around. A few phone calls could save you hundreds of euro.
(6) Review premiums on life cover/mortgage protection/serious illness cover. Especially if you arranged it directly with a bank or insurance company that could not compare. Do an exercise where you track spending for one month. In over 25 years of helping people with their finances, I have never seen anyone NOT make savings by doing the above. If anyone would like the free budget spreadsheet in excel format that will calculate totals as you input them, just email info@financialcompanion.ie with Budget in the subject line. Happy saving!

By Dave Kavanagh

Having appropriate cover in place for you and your family is obviously important, whether it is Life Cover, Serious Illness Cover or Income Protection. What is equally as important, is knowing the details of the cover that you have in place. As time moves on and circumstances change, what was relevant for you 5 years ago, may not now be appropriate for your needs. I remember giving a talk to a group of about 50 parents, all of whom raised their hands to signal that they all had cover in place. I then asked how many of them knew (without needing to divulge to the group) which Life Company their cover was with, how much was the monthly premium and what the levels of cover were? Of the 50 parents present, not one of them raised a hand, despite paying for these plans for a number of years. Simple changes in circumstances can make it crucial to review cover details. Starting new employment that may include a multiple of annual salary as a death in service benefit, as well as income protection and a pension, could mean that other cover in place could be reduced or removed. The reverse is often seen where someone had great benefits attached to their employment but then moved to a job that does not provide any benefits at all and had not considered that they need to arrange their own cover.

Another issue that people are often not aware of, is whether any cover they have has a Conversion Option. This is an option that allows people to convert to a new, longer term plan, without any further evidence of medical health. This can be crucial if a plan is reaching maturity or if someone has experienced adverse health issues, where they may not be accepted for cover due to their new medical history or may be subject to restrictions and/or premium loadings. Having the ability to exercise a Conversion Option allows you to “future proof” cover to suit your specific circumstances. While not a fun exercise, making some time at least once per year to review the details of any cover you have in place can be a valuable exercise. If you’re unsure about some of the details, contact your advisor.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

Of course, nobody wants to consider that something bad and impactful will happen to them, but most people realise that every week in Ireland there are unexpected fatalities, serious illnesses diagnosed or injuries/illnesses that prevent someone from working. One of the main impacts of any of these occurrences, is the financial loss that can be suffered either by the individual concerned or by any family members dependent on them. The amount of financial loss can vary greatly, and will depend on the event and also the person’s circumstances. The easiest one to consider is the impact of a fatality. Is there an immediate loss of income? Will there be an entitlement to pension benefits? Is there a dependent partner and/or children? If there are children what age are they and how long will they need to be provided for? What protection benefits are already in place? Is there a mortgage that is protected? Are there any death in service benefits with an employer? Giving consideration to these questions can identify what the potential loss would be and help calculate the appropriate levels and types of cover required. Where an accident or illness prevents someone from working, what is the impact? Does an employer pay them for a period of time? If so, for how long? Would some people be forced to use up their savings in order to make sure that bills are paid and supplies bought? The diagnosis of a serious illness can have a negative impact on finances. In some cases it may just result in a relatively short period off work, a stay in hospital and perhaps a supply of medications. But in others, it could result in never returning to work, needing a downstairs bedroom, a wheelchair accessible shower and a modified car. Having a tax-free lump sum paid out at these times can make a huge difference in someone’s finances. The important thing is for people to consider their own, specific circumstances and the financial impact it would have on them and their family. This will allow them to plan more accurately, but in order to consider these details, you have to make the time to analyse them.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or for information (with no cost or obligation) he can be contacted by emailing Dave directly on info@financialcompanion.ie or you can use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

When applying for mortgage approval, there are several factors that the lenders take into account when considering your application. The three main ones are, Multiples of Salary, Net Disposable Income and Proven Ability to Repay. Until recently, the standard guideline for the maximum borrowing permitted, was 3.5 x gross annual income. Since the start of this year, this was increased to 4 x income for first time buyers. However, with interest rates on the increase, at least one lender has already adjusted other criteria for applicants seeking to apply for the increased multiple. One of the factors adjusted, is the second one, Net Disposable Income. This refers to how much applicants will have left over after paying their mortgage each month, to cover all of the other essentials. This differs from lender to lender, but also depends on the family dynamic. For example, a couple or individual with no children will not be expected to need as much as those with perhaps, 3 children, due to the increased cost of living for those children. The last of the main criteria examined is Proven Ability to Repay. For example, if the proposed mortgage repayment is €1,500 per month, the lender will usually “stress test” this repayment by calculating what the figure would be if rates increased by 2% (often not done if people opt for a fixed rate). So they may be looking for evidence that a figure of €1750 is affordable. This could be illustrated by regular savings, rent, or loan repayments on a loan about to be cleared, or a combination of all. Advance planning can give you a much higher probability of getting approval by considering these factors. Obviously, there are many other factors to consider, such as how you conduct your current accounts and how much you have saved. For first time buyers, at least 10% of the purchase price is required, while for non first time buyers, at least 20% deposit is required. One often overlooked consideration, is to make sure that you qualify for mortgage protection, so this is something to look at in the early stage to make sure it would not be an obstacle to finalising an application.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or for information (with no cost or obligation) he can be contacted by emailing Dave directly on info@financialcompanion.ie or you can use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

When people think about insurance cover for themselves, it’s usually Life Cover that springs to mind. Something that pays out a sum of money in the event of death is not everyone’s favourite topic over a coffee. But other types of cover, sometimes referred to as Living Benefits, should certainly be considered by anyone that would suffer a financial loss in certain eventualities. Firstly, Income Protection. If someone cannot work due to any illness or injury and suffers a loss of income, they can be paid up to 75% of their usual salary, either until they can return to work or up to a chosen retirement age if they can never return to work. Consider what the impact would be if your current salary dropped to the current state illness benefit for a couple of years. Next, Serious Illness Cover. This pays out a tax free lump sum on diagnosis of any of the illnesses that are covered. While companies in Ireland cover approximately 50-60 different illnesses (as well as many more minor events that pay partial payments) the vast majority of claims here, are for Cancer, Heart Disease, Stroke, Multiple Sclerosis and Loss of Independence. The key is to get cover in place while you are relatively young, not just because there is a much higher chance of being accepted for cover but because the premiums are so much cheaper. At present, a 29 year old putting a convertible term plan with €250,000 life cover and €100,000 serious illness cover for a 30 year term, would cost €48.05 per month. A 49 year old doing the same levels of cover but for only a 10 year term (both finishing at age 59) would cost €127.00 per month. Lastly, introduced in recent times is Multi Claim Protection Cover. Similar in many ways to Serious Illness Cover, this option allows people to claim for more events on a needs basis. For example, if someone was diagnosed with cancer, a percentage is paid out. If they were required to stay in hospital for a certain period, a further percentage is paid out, and again if follow up treatment is required, another payment. While everyone’s needs are different, it’s worth taking time to see what is right for you.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing him at info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

So, February 2023. The time when many “New year, new me” changes may have faded into memory. So many great intentions of life improvements were planned: get healthier, spend more wisely, have more money, relax more, stress less, start a new hobby. All noble intentions, with one thing in common – they require you to make some changes and make time for those changes. For some aspects, this is easier than it is for others. Relax a bit more? Sure. Spend some “Me Time” in the gym? Absolutely. Do some work on planning the finances? “Errrrr…maybe I’ll start on that next week”! Without realising it, many people subconsciously view dealing with financial planning as “negative”. Understandably, who wants to sit discussing the potential loss in the event of a fatality, or a serious illness, or not being able to work, or thinking forward to the last third of your adult life? If any of these type of events would cause a financial loss to you or those dependent on you, making some time to at least establish what options are available, is the least you should consider. There are so many other benefits to reviewing your finances, not least of which, it can leave you with more money! Two of the tips I constantly tell people is to examine 3 months’ bank statements and to do a monthly spending exercise. Going through the bank statements can help identify things that maybe you should no longer be paying for, or that you are duplicating. Keeping a spending diary for a month will give you a clear picture of detailed outgoings, allowing you to identify spending that you could possibly do more efficiently and permit you to make any changes necessary. The end result of making the time for such an important topic, will not only usually leave you better off financially, but put you more in control of your finances, thereby reducing the stress/anxiety often associated with money. One hour is 4% of your day. Make the time.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing him at info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.

By Dave Kavanagh

January is traditionally a time when many people embark on making some positive changes or improvements in their lives. The most recognisable of these is the ‘losing weight/getting healthier” one. To give people more of an incentive to maintain what they start, it’s worth noting that if done properly, losing weight can have the added bonus of leaving you with more money at the end of each month. So how does that work?? Well, by “doing it properly” I refer to NOT going on a diet, or buying products with magic properties that will make the weight just fall off. Instead, making small, sustainable lifestyle changes. It can be adding some exercise in week 1, drinking more water (and less alcohol/sugar laden drinks) in week 2, reducing portion sizes in week 3, substituting things like chips for wholegrain rice or pasta in week 4, breaking the association of biscuits/cakes whenever you have a coffee or tea in week 5, etc., etc. Doing it this way, makes it sustainable and when weight is dropped slower over a longer period of time, it is far more likely to be kept off. So how does that help my finances? When I analyse people’s spending budgets, it’s clear that takeaways, alcohol, sweets, cakes biscuits etc. pop up quite frequently. If you keep track of the savings when you cut down on many of these things, it’s easy to see how much you can save. One person I was helping used to enjoy her “treat” of a chocolate eclair most days. When she accepted that she felt bad after eating it and conceded that it was not helping her goal to lose weight, I suggested it was more of a punishment than a treat. I proposed that she put the money into a jar each day and when there was enough, to treat herself to a back massage, which can positively reinforce the good changes someone has made. Make the right choices, one day at a time.

By Dave Kavanagh

Are there actions you can take to make the festive season less of a financial burden? Of course there are.Firstly, manage expectations: Most people can’t remember what they got 2 years ago, so don’t put yourself under too much pressure for “big” presents. Next, leave the credit card at home: At about 20% interest, adding debt for things you don’t need to overspend on, only starts the new year off in a negative.Be realistic with food shopping: The shops are only closed for 1-2 days, do you really need to stock up so much? In the days/weeks after Christmas, make a list of all the things you bought but didn’t really need or through out, and keep it for next year, so you don’t repeat the same mistakes. Kris Kindle: Talk to family and close friends to agree to pick one person and buy them a present for a set limit, to ease the burden.There are things you can also do all year round that can save you enough to cover the cost of Christmas: Switch utility providers, the savings can be quite substantial. Compare before you shop for larger items: Just because one store has a sign saying the TV you want is reduced from €799 to €699, doesn’t mean that another store that does not have a sale on, isn’t selling the same TV for €649. Take the time to shop around when your car or house insurance renewals come in, it can be well worth the effort. Review premiums that you pay regularly, such as mortgage protection or life cover, especially if they were taken out directly with a bank who could not compare. Finally, go through a few months’ bank statements: we regularly find people paying for things that should have been cancelled years before or that they simply no longer require.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing him on info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.