We all know we should save, but the reality isn’t always as simple. From impulsive boot buys to splurging on dinners, there are lots of little temptations that can get in the way of saving plans. We sat down with some IMAGE readers and a financial advisor to see how they balance enjoying today while financial planning for tomorrow.
Recently we surveyed all our lovely image.ie readers on how life events affected their spending and saving. It turns out that many of you, 88%* in fact, agree that healthy finances promotes a healthy mind. In attempting to balance family and friends coupled with a hectic work schedule, it seems that happy finances can offer you peace of mind. Anna Browne, a business development manager, talks with us about saving for the future, dividing economics duties within her family and she utilises different accounts to serve different purposes.
Anna Browne, 38, business development manager, married with two kids, dual breadwinner
My husband and I very much share our financial responsibilities equally. We own two cars, and we budget every month – and then try to stick to it. With the two kids, we try to plan ahead and live within our means. At the moment, we save about 15 per cent of our income monthly and we have various different accounts – current, bills, short-term and long-term savings. We don’t have any investments or shares, and we do use a credit card. We also have pensions and a nest egg to feel a little more financially secure. I started to get serious about my finances when the SSIA scheme launched – that focused my mind on what my money could do for me long-term. Everyone has financial worries, and we always wish there was a little more money, but who doesn’t? We take our advice on money from financial institutions. At the moment, we’re building a large house extension, which we’ve been saving for over the last five years. Next on the list is my dream kitchen, and long-term, we’re saving for our kids’ education.
Sinead Ryan, financial advisor, says …
Anna and her husband are great savers. They have accounts for short, medium and long term goals which are specific. They also have pensions (although they should check with their HR department exactly what these provide and whether they need to top it up via an Additional Voluntary Contribution (AVC), which is tax efficient). It’s fine that they don’t have investment in shares – their pension portfolio most likely has a role here anyway, and equities can be risky unless you know what you’re doing. Anna seems to like the belt-and-braces approach to finances which is no harm with a growing family and lots of bills. So, a variety of deposit accounts is an ultra-safe way to do this. It would be no harm to set up another account for the education fund, now that the extension is paid for. School and college fees are expensive, along with all the books, uniforms and perhaps accommodation requirements later on. Earmarking the account just for this, makes ‘raiding’ it for other things less likely. Separately, Anna has a credit card, which is great tool for flexibility. However, she should not allow a balance to build up – paying it off every month (even from savings) is vital to avoid expensive interest. Finally, it may be okay to borrow for the kitchen – getting the works all done together can be cheaper and less disruptive. A loan will be straightforward given the strong savings record built up.
Talk to RaboDirect today about setting up your own saving plan. Visit rabodirect.ie or call 1850 882 244