By Dave Kavanagh

When compared to home-owners, people who rent where they live 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. For home owners, an unexpected temporary loss of income, whether due to illness or occupational difficulty, may mean that they need to make an arrangement with their lender until their income returns to normal. Even in the event of a fatality, the mortgage protection in place will clear the mortgage, leaving the surviv-ing partner (if there is one) not worrying about mortgage payments. Renters don’t usually have any such protection in place. If a loss of income meant rent could not be paid, they would most likely be evicted. With the current levels of rent so high, if one of a couple renting passed away, it may not be affordable on one income. So, can renters protect against such eventualities?Yes, firstly, having income protection in place, which pays out an income if someone cannot work due to illness or inju-ry and suffers a loss of income, would make sure that rent could still be afforded, preventing a pos-sible eviction. Also, in the same way that home-owners have life cover in place to clear a mortgage in the event of a fatality, renters can do the same, with the payout allowing them to purchase their own property mortgage free. Serious illness cover also pays out a lump sum on diagnosis of one of the specified illnesses, which could also be hugely helpful to renters. Premiums for such cover plans, especially for younger renters can be a lot cheaper than people often think. If you rent, it would be clever to give some thought to these.

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

I wrote a piece a couple of years ago following a series of interactive talks I had given to a number of groups. I had broken each group into small working groups and set them a task, to work out ap-propriate levels of life cover for a 35 year old couple with 2 young children, where “John” was in full time employment and “Mary” was a homemaker with no source of income. I gave a few basic details such as income, mortgage balance, loans and savings etc. and although there were varying levels of cover suggested (ranging from €150,000 to €2,000,000 life cover) in the vast majority of cases, the groups suggested that John needs approximately double the level of cover that Mary does, being the sole income earner. Cover should be based on the financial loss that would be suffered, so once I explained that although John passing away would remove his income, if Mary passed away, John would have to either give up work (also removing his income) or have very high costs for the minding of 2 young children, as well as additional, potential costs associated with running the house, the groups then realised that the appropriate levels of cover should be about the same. So is that the reality for most couples?Obviously, there are many different family unit dynamics, one or both in paid employment, more or no children, one or both with pension and death benefits etc., and the important factor when arranging cover is to calculate the potential financial loss that could occur for your own specific circumstances. But I still see many examples that are still placing too low a value on a homemaker by not considering the financial loss that would occur in the event of that homemaker passing away. Have a look at your own levels of cover and see if this is something you need to review.

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

By Dave Kavanagh

I often review life cover plans that people have in place and realise that they have been set up wrong. 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, which means (in the current tax year) after a 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 €77,137.50. Is there any way to be exempt from this 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 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

The start of another year, where despite all of the challenges that Covid-19 brought, 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. 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. Do-ing 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 fre-quently. 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.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or infor-mation (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 depart-ments on financial wellbeing, positivity and motivation. As heard on RTE 2FM and TV3.

By Dave Kavanagh

Why is it that when the topic of planning your finances comes up, many people cite not having enough time? There are reasons for this - Firstly, it’s not considered a “fun” activity. Compared to going for a meal, walking on the beach, watching a movie etc., it doesn’t have the same enjoyment factor. Secondly, there is a subconscious negativity regarding financial planning, for reasons includ-ing, having to face possibly not being as efficient as you could have been, having to consider poten-tial financial loss in the event of a fatality, or not being able to work due to illness or injury, and hav-ing to plan your income for what will probably be the last third of your adult life. (Fun, right?) So people make all kinds of excuses to avoid dealing with it.The question therefore is burying your head in the sand wise? Many life events can happen, whether you have planned for them or not. One hour is 4% of your day, spending this once or twice per year can be hugely beneficial. The dif-ference in dealing with, lets face it, one of the most important aspects of your life, is that it will put you in control of your finances rather than your finances being in control of you, reducing the stress and anxiety often associated with “money worries”. I often see those that keep control of their budgeting having more disposable income than people earning 50% more than them who do not make the time to plan. As a starting point, take out 3 month’s bank statements and make sure you can account for every transaction. Next, Make a list of what you think you spend every month, then keep a detailed diary of one month’s spending and compare. Then, arrange a phone or video review with your financial advisor from the comfort of your home. It’s never been easier. Make the time.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or infor-mation (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 depart-ments on financial wellbeing, positivity and motivation. As heard on RTE 2FM and TV3.

By Dave Kavanagh

A hugely important topic is planning for retirement. Unless you want to try and live on a mediocre state pension for what is likely to be over a third of your adult life, it would be wise to make your own plans and plan early. Obviously, the longer you contribute to a pension, the more you will have when you retire. One of the most attractive aspects is the tax relief on contributions at your marginal rate. This means that for anyone on the 40% tax rate, every €100 you contribute is only costing you €60. Another way of looking at that is that your €60 has grown by just over 66% to €100 the moment you have put it in! The other tax incentives, are that pension funds are invested in a tax-free environment and you can also take a tax-free lump sum at retirement stage.
If you’re fortunate enough to already be in a company pension scheme or a superannuation, that is great (although depending on your length of service, you may want to supplement your fund by paying AVCs (additional voluntary contributions)). The people that administer your pension scheme should be able to provide you with information about that. If you have your own limited company, you can set up your own scheme and allow the company to pay for all or some of the contributions. For everybody else, You can set up a personal pension or a PRSA (personal retirement savings account) and still get the tax relief. Self employed - One option that many self-employed people avail of, is to pay an annual amount into a pension in order to reduce their tax bill. Usually, they would have up to 31st October in the current year in order reduce their 2019 tax bill, but due to Covid-19, for those filing and paying online to Revenue, they will have more time to do this.

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

Every year, I see examples of people who have done all the right things in preparing for a mort-gage application, saved regularly to build a deposit, maintained stable employment, avoided tak-ing out new loans, conduct their current accounts efficiently etc. but sadly, 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. So what would cause this to happen? When you apply for any form of life cover, it is underwritten based on your current and past medi-cal 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 pro-tection 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 protec-tion 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 www.financialcompanion.ie or phone 087-6414570 and on Twitter @Davekav_advice. 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

One of the most “put on the long finger” exercises in Ireland is making a will. A recent survey by Irish Life showed that 3 in 4 people say it’s important to have a will but 2 in 3 people in Ireland have no will. 1 in 3 people say they haven’t made a will because they “haven’t gotten around to it”!Avoid Capital Acquisition Tax - One of the financial aspects to consider (and a good reason to make a will) is that good planning can reduce or completely eliminate a potential tax liability in the event of a fatality. This is because without a will, it is the Succession Rights Act that deter-mines how someone’s estate gets distributed and this may not be the most tax efficient, as there is a limit to how much someone can receive either as a gift or an inheritance, depending on their re-lationship to the person leaving the estate behind. There is no limit between spouses or registered civil partners. After that, there are three thresholds - In the current tax year, children can receive €335,000, other close relatives (such as grandchildren, parents, siblings etc.) can receive €32,500 and all others (classed as strangers, including cohabiting couples) can receive €16,250. After these thresholds, all balances are taxed at 33%. So planning the right distribution of an estate can mas-sively reduce tax liabilities.Any other way to minimise tax? - When it is clear that a substantial CAT bill will become liable, a person can commence a Section 72 life plan. The proceeds of this plan can be used to pay the tax liability without increasing the value of the estate. These can be arranged through your financial advisor or broker and are the most efficient way to pay the tax liability.

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. 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.

A survey by one of the life companies has revealed that 9 out of 10 people in Ireland were not aware that financial reviews can be done by video call. Many of those surveyed would be in favour of doing a review this way. Some of the reasons cited were: personal safety - no risk of COVID-19, convenience - no driving or parking to meet, easy to arrange, and time saving - no journey to and from a meeting. The feedback from those that have availed of this service was also very positive.

                                     Why video and not just phone call?

It is often said that communication is about 20% what you say, 30% tone and 50% body language. It is far easier to understand what someone is explaining when you can see them. The reverse is also true, it is easier to gauge the pace of how you’re explaining something when you can see the reactions of those you’re talking to. Also, screen sharing gives the ability to display a variety of graphics, screens or documents from both sides.

So what kind of things can you cover in a review? Most aspects of your current, future and unexpected income and expenditure. Your day to day budgeting, planning ahead for the short, medium and long term. Planning for unexpected events with things like life cover, serious illness cover and income protection (and making sure you are not over paying for existing plans!) Calculating what you may need in planning for retirement, including looking at anything you may already have in place. Overall, keeping you up to date and in control of your finances. It could be the most important video call you make this year!

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. 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 Siobhán O’Neill White

On top of the stress of Covid-19, parents now have the pressure of hefty back to school costs to deal with. For years, politicians have promised parents that crested uniforms would be done away with but, as the new term approaches - and despite the financial strain on many families right now - parents are still being forced to fork out big money for bad quality, crested polyester uniforms. As well as expensive uniforms, parents have to buy books, PE kits, school recommended shoes and school fees. For secondary school, many children now use ipads, which can cost between €400-€900. As if parents have not been wrung out to dry enough by this stage, many schools ask for a voluntary contribution, which averages around €250 per family.So, as a parent, how can you manage all this without going bankrupt and causing yourself untold stress? First off, you do not have to go to the ‘recommended’ school supplier. We have shopped around and found a 100% polyester crested jumper from a school ‘recommended supplier’ at €40, whereas Schoolbox.ie has the same jumper (in better quality with a wool/poly mix) for €29. For crested tracksuits you can save more than €10 by shopping around. Bestwear shop in Drogheda are very competitively priced and have become so popular with parents that they now supply uniforms for schools in Dublin, Louth & Meath. To make the whole experience of school shopping easier and more cost effective, Schoolbox.ie have a box of school supplies, including crested uniform, schoolbag, shoes, stationery etc in one box for a competitive price. It cuts down on expense and is less stressful than shopping in lots of different places for school essentials. With social distancing rules, this is a safe way to shop now. We got one of these boxes for our daughter for secondary school last year and it was excellent – even her locker lock was included!

If you are worried about school costs, you can apply for the Back to school clothing and footwear allowance (BSCFA) from Welfare.ie and there are money saving tips on www.mams.ie too.