The cost of living crisis is changing how we manage our money and prepare for our financial future.
The following is a comprehensive list that includes some starting points, as well as some more complex strategies, for those who want to master their financial future and make 2022 the start of a long-term commitment to financial success.
Take Control of your Financial Future
1. Improve your financial literacy
Don’t know much about managing your money? The Competition and Consumer Protection Commission provides impartial and comprehensive information to help you make the best financial decisions for your needs covering saving and budgeting, interest and debt, investments and retirement, and more.
2. Start a money journal
Explore your attitude towards money, your hopes and fears and your dreams for financial success. Doing so can help you crystallise your long-term goals so you can make a plan for a comfortable financial future.
3. Write down your long-term life and financial goals
Include them in your journal, along with a timeline for achieving them.
4. Reconcile your bank accounts
Check your bank account debits against the payments you have made, and make sure any pending bills are either paid or scheduled.
5. Compare interest rates for savings accounts
This is a perfect place to start building or expanding your emergency fund. While you are at it, commit to saving a specific euro amount or percentage of your income each month.
6. Make an extra credit card payment
If you carry a balance on your credit cards, start paying down the card with the highest interest charge.
7. Determine your net worth
List your assets (what you own), estimate what each is worth, and add up the total. Next, list your liabilities (what you owe), and add up the outstanding balances. Subtract your liabilities from your assets to determine your net worth.
8. Estimate how much money you need to retire
Wondering how much money you need to live comfortably in retirement? Use a free online retirement calculator to figure out a rough estimate. Here is one to try.
9. Organise your important household and financial accounts
Would your loved ones know how to run your household or understand your last wishes if you became sick or injured, or died suddenly? Start organising your important documents and accounts, store them securely and share their location with a family member, financial planner, and/or solicitor.
10. Create a budget and track your spending
To get a handle on where your money is going, try creating a budget and tracking your spending.
11. Automate your savings and investments
One of the least painful ways to save and invest is to automate the amounts you want to set aside each month, so you won’t be tempted to spend them.
12. Contribute to a retirement savings plan
If you do not have access to a government or company pension, consider setting up your own retirement savings account. If your employer offers such a plan, consider your options for enrollment, and make a plan to participate in the program.
13. Shop for insurance
Plan to purchase insurance to protect your assets in the event of an unplanned occurrence or death. Types of insurance coverage include health, life, income protection, and serious illness insurance.
14. Look for ways to lower your monthly bills
As contracts for things like your mobile phone, cable service, or utilities expire, do some comparison shopping to see if you can reduce your monthly spending. You may even be able to negotiate a lower rate with your current provider.
15. Create or update your will
If you have a will already, take the opportunity to review and update it as needed. If you need a will, schedule an appointment with a solicitor or appropriate estate planning professional to create one.
16. Make some extra money by selling unwanted items
Looking for a way to reduce clutter and make some quick cash? Explore the many online tools for selling your unwanted items. Before doing so, be sure to review secure ways to handle payment and delivery, and research common scams.
17. Create a personal document retention policy
Learn how long you should keep important paperwork, such as contracts, loan documents, tax returns, or account statements. Create a system to purge documents you no longer need, and scan and save the ones you need to keep.
18. Talk about money with your child
Does your child understand the concept of saving money? Help your child open a savings account and understand the basics of paying bills and building credit.
19. Start a third-level education savings fund for your child
While the average cost of sending a child to primary and secondary school might seem high, the expenses associated with third-level education are in a different ballpark, with accommodation representing a substantial average annual cost.
One measure families can take to help avoid putting their households under financial pressure is to ensure early planning around their children’s education, adopting measures such as early life savings schemes.
20. Make an appointment with a CERTIFIED FINANCIAL PLANNER™ professional.
As the standard of excellence for financial planning, the CERTIFIED FINANCIAL PLANNER or CFP® certification helps the public identify financial planners who have met the rigorous competency, ethics, and practice standards necessary to engage with financial planning clients.
In addition, CFP professionals pledge to place their clients’ interests first, an important point for those looking to build a long-term, trustworthy relationship with a financial planner.
The advice market is changing and this is natural. The larger players and banks are further developing one size fits all strategies and campaigns.
You don’t have to fit into one of these templates. The independent financial adviser segment of the marketplace is maintaining its independence and delivering world-class solutions for clients.
Colm Moore is a CERTIFIED FINANCIAL PLANNER™ with Moore Wealth Management. We have been advising the dental community for over 20 years.