By Dave Kavanagh

People who rent privately where they live, compared to home owners, can be a lot more vulnerable. Apart from the obvious points, like rents being increased or having to move out if a property is being sold, there are other potential events that could prove problematic for renters. As we saw in the early part of the pandemic, where many people’s incomes were drastically reduced, those with mortgages were permitted to avail of “payment breaks” with minimal effort. Unfortunately, those renting do not usually have the flexibility of this option. When someone cannot work due to illness or injury, they may suffer a loss of income, either immediately or after a short period, resulting in the inability to pay rent. This could lead to eviction and all of the problems associated with it. While those renting may not have been exposed to the kind of financial advice as someone going through the mortgage process, there are still safeguards that can be put in place. One option is Income Protection, paying them a portion of their income if they were unable to work due to illness or injury. This could be the difference between affording rent or being evicted. Something not often considered by renters is Life Cover. If one of a couple renting passed away, this could allow the surviving partner (or family) to purchase their own home immediately without the need for a mortgage. Similarly, Serious Illness Cover could pay out a tax free lump sum on diagnosis of one of the illnesses covered, giving another layer of financial security. Better to consider these options earlier rather than later.

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 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

Many people are in the “it’ll never happen to me” group, when it comes to planning for events that could potentially impact finances. Let’s face it, nobody wants to think that anything “bad” will happen to them but the reality is, bad things happen whether we like it or not. The three areas that are most prevalent to this topic are, Life Cover, Serious Illness Cover and Income Protection. Of course, we would hope that we are not going to die prematurely, we are not going to get seriously ill and accident or illness will not prevent us from being able to work. Sadly, in this small country of ours, over 7,000 people die each year NOT of natural causes (under age 65), we are heading towards 43,000 new cancer cases every year (the cause of more than 50% of Serious Illness claims) and the average time off work for an income protection claim is close to 5 years! When I do group talks, I often ask the question whether anyone’s close family or friends have been affected by cancer? I have only ever had one person say “no”. When I ask whether the same close family or friends have ever won the lotto jackpot, not surprisingly, it’s (almost) always “no”. Yet with odds of 10.7 million to 1 to win the lotto jackpot, people spend a relatively large amount of money each week on lotto (and Euromillions and scratch cards etc.) believing and hoping that it will happen to them. The same people have a 4 to 1 chance of being diagnosed with one of the Serious Illnesses covered BEFORE they are 65. We often review people’s finances and see that they have their vehicles insured, their house insured, their pets, mobile phones, lap tops and jewellery insured but not themselves! It’s not until one of these events happens that people can fully appreciate the financial loss that is suffered. An important detail is that even if people have cover in place from a few years back, they could well be paying over the odds premium wise or it may no longer be most appropriate. Take the time to check what is most appropriate for your specific circumstances.

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 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

Every year, I see examples of people who have done all the right things in preparing to apply for a home loan to purchase their new home. They have saved regularly to build a deposit, maintained stable employment, avoided taking out new loans (and made sure any existing or previous loan obligations were paid in full and on time), conducted their current accounts efficiently, etc. but sadly, they don’t get to proceed with their house/apartment purchase (certainly not in the time frame they wanted to) because they cannot get their mortgage protection life cover accepted. This can be for a number of reasons but primarily it comes down to this.When you apply for any form of life cover, it is underwritten based on your current and past medical history. If someone has had any adverse medical conditions, if deemed serious enough, it could prevent cover being granted. More commonly, someone may have been recommended by their GP or consultant to have certain tests done, but they never got around to it. This would usually prompt a life company to postpone a decision until the tests are done and satisfactory results are available. Depending on the type of tests, this could take months to get sorted. For these reasons, anybody planning to apply for a mortgage should research how they will be underwritten for mortgage protection at an early stage, particularly if they are concerned that a past medical issue could be a problem. In the current climate regarding Covid-19, many are even getting their mortgage protection in place early and extending the term so that they are certain of having cover in place, when it is time to draw down the home loan. Once cover is in place, any new medical issues that arise will not be relevant.

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.i 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

During a consultation with new clients recently, I asked if they had serious illness cover in place. They said that they did. When I asked for the details, they were unsure so searched for their policy details. It turned out that they had PPI (Payment Protection Insurance) and misinterpreted the word “illness” somewhere in the description. They did not have serious illness cover. (The PPI “might” have paid out a few hundred euro towards their mortgage payment if the person covered was out of work due to illness or injury and only after a 2 month period and then stopped after 12 months, whereas serious illness cover can pay out a tax free lump sum on diagnosis of one of the conditions covered). It was yet another reminder that most people do not know the important details of plans that they pay regularly for. As people’s circumstances change, it’s important to be up to date with knowing what you are actually paying for. Here is the very least that you should know about any protection plans that you have in place:

Life Cover: How much cover is there? When does it expire? Is it dual or joint? Does it have a conversion option? Is it level, increasing or decreasing? How much does it cost?

Income Protection: What is the deferred period? (The length of time you have to be off work due to illness or injury before payments commence). What level of cover do I have? Up to what age will payments continue if I could never return to work again? How much does it cost? Have I claimed my tax relief? (I.P. premiums are tax deductible).

Serious Illness Cover: A.K.A. Critical Illness Cover or Specified Illness Cover. What level of cover do I have? Is it stand alone or accelerated cover? Is it dual or joint? When does it expire? Do I have the option to extend cover without further medical evidence? If you don’t know those details, it’s time to get out the paperwork and find out. You’ll be glad you did.

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.i 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

For many reasons, people often put off having to deal with their finances (it’s not the most fun exercise!) despite the fact it can give them peace of mind, reduce outgoings and often leave them with more money left over each month. But what are they really saying?
“I’ll have a look at that after Christmas”. Often replaced with “after Easter”, “after the holidays”, “after the kids go back to school” and a few others. What is actually being said is “I’ll name some time in the future so that I don’t have to deal with it now”. Let’s face it, you can easily find 30-60 minutes once a year to deal with something this important. You’ll be glad you took the time. “We have everything in order already”. Great. That is if it’s been reviewed in the last few months, but on closer examination, it often hasn’t been looked at in years and circumstances have changed. It’s important to keep things relevant to your current personal circumstances. “Our bank sorted everything for us”. Your bank may have sorted a few things, but in most cases, banks are tied to one company, so a fair comparison cannot be made, meaning you could be paying way over the odds for whatever the bank has put in place for you. Dealing with an advisor who is not tied to one company and can compare other options is the only way to make sure you get the best value. “I’m busy at present, I’ll give you a shout in a few months”. Let’s face it, going through your finances is rarely on anyone’s list of favourite activities. But the fact remains, if there is an activity that you like you will make time for it. Burying your head in the sand is rarely a successful solution to most problems. Someone once told me that they had no time and in the same conversation told me they had queued for over an hour in a drive through for doughnuts. (They were also up to date on all the soap storylines!)

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 www.financialcompanion.ie or phone 087-6414570, 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 and TV3.

By Dave Kavanagh

A tax that is often not considered and doesn’t usually make the Budget headlines each year is Capital Acquisition Tax. In 2019 in Ireland, there was €455 million collected in Capital Acquisition Tax. This covers both inheritance tax and gift tax. It also includes estates that may have been taxed in previous generations. For example, if someone left an estate worth €2,000,000 to an only daughter, she would (in the current tax year) have a tax bill of almost €550,000. After she pays the bill and puts what’s left in the bank, any interest is taxed (DIRT). Guess what happens when she passes and leaves her estate behind? It’s taxed again! Spouses can leave any amount to each other tax free. After that, the three thresholds are, a) Children - €335,000, b) Other close relatives - €32,500 and c) All others (including cohabiting partners) - €16,250. Everything received above these is taxed at 33%. So, is there any way to prevent it? There are two main actions that can either reduce or eradicate such a tax bill. The first is to take the time to plan when making a will. Let’s say a value of €750,000 was being left to 2 adult children. (Not a big estate if you combine a house, savings and a life policy). This would create a tax bill of over €25,000. Instead, if €670,000 of it was left to the 2 children and the balance between a few grandchildren, there is no tax bill. The second thing that can be done is for the person leaving the estate to take out a Section 72 plan. This is a type of life policy that is allowed to pay any tax liability without adding to the value of the estate. It becomes particularly important for anybody that does not have children to plan things out, as even other relatives can only receive €32,500 before any balance is taxed. These thresholds are particularly important for anybody in the process of planning or making their will.

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 www.financialcompanion.ie or phone 087-6414570, 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 and TV3.

By Dave Kavanagh

It’s human nature to want good things to happen to us and conversely, for bad things not to happen to us. A constant example I see of this, is the vast amounts of money that is spent on the lotto every week, despite the odds of winning the jackpot of 10.7million to 1, compared to the numerous people I talk to that have no preparations in place, for the potential financial loss in the event of a serious illness or even a fatality. Considering that in Ireland, you have a 1 in 4 chance of developing one of the conditions covered before age 65, and, according to one of the main life companies’ claim statistics for 2021, 32% of their death claims were under age 60. The difference between how people affected by such occurrences will be impacted financially, is usually dependent on how people have planned and prepared. Of course we don’t want bad suff to happen, but it happens frequently whether we want it to or not. (Exponentially more frequently than the aforementioned lotto jackpot wins!)

Whenever I talk to people who have just reviewed their own individual circumstances and put appropriate plans in place, they talk about the “peace of mind” that this gives them and the fact that it is one less thing to worry about now that they are up to date with the knowledge that sufficient cover is now in place to prevent any major financial loss, should one of those “bad things” happen. It requires a conscious act of making the time to look at your own situation and finding out the levels and types of cover that are suitable and affordable for you. A simple phone call or email may be all you need to get started and having one less thing for you to worry about.

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 www.financialcompanion.ie or phone 087-6414570, 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 and TV3.

By Dave Kavanagh

When advising clients and analysing their finances, I ask them how long (if at all) their employer will pay them if they are out of work long term due to illness or injury. In some cases, it is standard and can be something like 3 months at full pay, then 3 months at half pay and then a pensionable rate of pay. For many, they are not sure and when they look through their employment contract, it states “at employer’s discretion”. Many people realised how vulnerable they were when the pandemic arrived, dropping some incomes from €600 or €800 per week down to €350 of PUP. Many don’t give much consideration to how they would cope if they suffered a loss of income for an extended period because they think “it’ll never happen to me”. Sadly, many find out the hard way following an injury or illness that keeps them out of work for months or even years. This is where having Income Protection in place, can be the difference between maintaining a level of income that keeps your lifestyle virtually unchanged, or dropping to a level that could force you to use up any savings and also get into financial difficulty.

So how does it work? Depending on your circumstances, you choose an appropriate level of cover. This is based on not exceeding 75% of your salary, less any state income entitlement. You also choose a “deferred period” which refers to how long you are off work before payments commence. The premiums are based on factors like your age and occupation, as some occupations would leave you more at risk of not being able to work. There is also tax relief on premiums paid for income protection, which could mean up to 40% of your premium is refunded by way of adjusting your tax credits. If dropping from your current income to the state benefit of €208 per week is something that would impact badly on you, perhaps it is time to consider.

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 www.financialcompanion.ie or phone 087-6414570, 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,

By Dave Kavanagh

Another start of a year and despite Covid 19 still present, many people will still be intent on embarking on making some positive changes or improvements in their lives. The most recognisable of these is the ‘losing weight” one. 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 improve your wealth? 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. Keeping a detailed spending budget where you log every day what you spend (not just the name of the shop, but the actual items) Lets you look back and accurately see what you have spent on the things you actually want to cut down on (one person told me “I can’t believe I ate 38 packets of crisps last month!!”) As for the xmas leftover junk, it can either go in the waste or on your waist. Make the right choices, one day at a time, and you bank account will thank 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 info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or phone 087-6414570, 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 and TV3.

By Dave Kavanagh

Recent surveys by the Royal London Group, have clearly illustrated the advantages in seeking fi-nancial advice. In Ireland, it showed that of those that received advice, savings were 55% higher, the average pension pot was €128,933 compared to €62,600 with those who had not sought advice. The vast majority felt more in control of their finances and felt they were getting the best value with the financial products that they paid for. In these times, Covid-19 has made people more anxious about money. So what stops people from seeking advice in such a crucial area of their lives? Some answers were, “I think it would be too expensive”, “it’s probably not for me” (believing it’s only very wealthy people that need advice!), “my bank looks after all of that” (when the bank is likely tied to one company and cannot fairly compare options for them.) Or “too proud or embar-rassed to let someone go through our finances”. In some ways, this can be likened to some people choosing not to seek medical advice (until potentially too late!) believing that it’s trivial or they can deal with it themselves. The one constant I’ve seen in all my years of advising clients, is the peace of mind and feeling of control that they feel. Even if the exercise of examining and analysing their finances uncovers some mistakes or wrong choices, at least they can now take action to rectify their situation, and move forward with confidence. If, like many, you are considering making New Year changes to improve your life in some way, you could do far worse than include a review of that which is connected to almost every aspect of your life, your finances.

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 www.financialcompanion.ie or phone 087-6414570, 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 and TV3.