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!

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

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.

By Dave Kavanagh

Many couples have joint plans in place for things like Life Cover. That is fine if the couple are married, but not if they are not married. Due to our very dated Capital Acquisition Tax laws, if an unmarried couple have a joint policy, in the event of a claim the survivor could be facing a large tax bill. This is because married couples can give or bequeath any value of assets without there being a tax liability. For a cohabiting couple, they are treated in the “strangers” bracket of amounts you are permitted to receive before tax is due. This did not change in the recent budget, so after a tax free threshold of €16,250, any balance is taxed at 33%. So if we take John & Mary as an example, who have a joint life policy with €250,000 life cover, in the event of John passing away, Mary will be paid out the policy proceeds but also now has a tax bill of €35,887.50 (this assumes premiums were paid from a joint account that they both contribute to, if John paid the premiums from his own account, Mary’s tax bill would be €77,137.50!) So how can you avoid being liable for such a large, potential tax bill? The correct advice when commencing cover for an unmarried couple should be, instead of setting up a joint plan, to set up two “life of another” plans. So John takes out a plan on Mary and pays the premiums and Mary takes out a plan on John and pays the premiums for that. When done this way, if the same as above happened and John passed away, Mary is deemed to have paid for the cover herself and so is not liable to pay any tax, meaning she receives the full €250,000 policy proceeds and no tax bill. It’s worth also noting that unmarried couples that buy a house together can face a similar problem if one of them passes away. The survivor that inherits the deceased’s share of the property may then be liable to pay tax on that portion of the property. There are ways to plan for this and to be exempt. If anyone is in either of these situations, please get in touch for advice.

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

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.