Ideas V Goals
It’s time to make a financial plan for 2017, but make it realistic and specific. Often, financial plans are more vague ideas than actual goals: save more, reduce debts, and so on.. but if you make it specific, put a plan in place – for example: save an extra €100 each month – then an aspiration becomes an actual goal
Priorities
Consider your financial priorities for the tear ahead, and plan accordingly.
Start with a financial review
Look at what you earn v what you spend
what existing savings do you have?
Investments? Insurance policies? Life cover?
watch out for warning signs – any obvious gaps in terms of financial products, needless extra expense such as duplicate cover, and a little more obvious – over spending. next, consider whats on the horizon. Have you any big financial events to deal with in 2017? Retirement or maternity leave for example? If so, make sure your financial plan reflects the reality of the year ahead.
As a starting point, here are a few areas to consider:
Tax
When Minister for Finance Michael Noonan announced Budget 2017 in October, he put a little extra money in taxpayers pockets next year. It’s nothing to get too excited about, but 2017 will bring slightly bigger pay packets thanks to the budget’s cut to the controversial universal social charge (USC)
According to documents published by the Department of Finance, a single PAYE worker with no children earning €55,000 per year will be up by €278 per year as a result of the changes in Budget 2017. Meanwhile, a married couple with two children and one private sector income of €70,000 will have an additional €453 per year.
Savings Tip – Make 2017 The Year You Switch To An Alternative Bank, Phone Or Electricity Company!
Budget 2017 also saw the earned income tax credit, which was introduced in Budget 2016, increased from €550 to €900. Department of Finance figures indicate that a single self-employed person earning €55,000 per year will be €678 per year better off in 2017.
Make Sure You Claim All The Tax Credits And Reliefs To Which You Are Entitled. You Have 4 Years To Make Your Tax Relief Claim, But Often People Don’t Realise This And Let Previous Tax Years Slide.
Mortgages
Last month, the Central Bank announced plans to relax deposit rules for first-time buyers. Those buying their first home in 2017 will need a 10% deposit versus the 2016 situation of a 10% deposit on properties valued at up to €220,000, and 20% deposit above that threshold.
The new rules come into force on January 1st and look set to have a significant impact on the housing market in 2017. Speculation has been rife in recent weeks that the easing of the rules could drive house price inflation in the coming months.
A couple aiming to buy a house for 400,000 would of needed at least a €58,000 in 2016, but now since January 1st, they will require a minimum deposit of €40,000 to buy the same house.
From January, first time buyers who buy a new house, will, subject to certain rules, be able to avail of the governments new help-to-buy scheme. the scheme announced in Budget 2017, has also been marked out as a potential driver of house price inflation in the coming year.
While deposit rules will be less strict next year, those planning to apply for a mortgage in 2017 still need to prepare fully.
Rachel McGovern, chief operations officer at broker group PIBA said lenders wanted “a copious amount of verifiable documentation”. The other key to securing a mortgage, she said, was proving “sufficient income to service a mortgage, that you have the financial discipline to save and manage your money”
“In a nutshell, it’s about two words: repayment capacity” said McGovern
Buyers Need To Think Carefully About Interest Rates Too. Don’t Be Too Swayed By Special Offers Or Cashback Deals.
“Lenders offer various incentives to attract first time buyers in particular, but what may seem an attractive offer at the beginning may cost you more over the longer term” said McGovern. “A 1% interest rate differential can make a substantial difference over the life of a mortgage”
Switching
Make 2017 the year you switch to an alternative bank, phone company or electricity company. Seek out the best value in the market, and move to where it is. You can minimise the hassle factor thanks to a range of online comparison tools that make light work of research for would-be switchers. A popular one is: https://switcher.ie/
Another Area Where Switching Can Yield Substantial Savings Is Energy Bills.
“Over the last year, the average cost of energy bills has come down, and we have seen some price cuts from energy suppliers, ranging from 2% to 6%. But there are still savings to be made – especially since recent research from the Commission for Energy Regulation showered the majority of is in Ireland are still on standard energy tariffs” said Eoin Clarke, managing director at price comparison website https://switcher.ie/
“If you stick with your provider, obviously you will get the benefit of any cuts they bring in, however, the savings you will make will pale in comparison to what you could save by switching. At the moment, providers are offering discounts of up to 33% for new customers”
“Switching energy supplier can only take a few minutes – here’s what’s needed:
Latest copy of your gas and electricity bill
GPRN and MPRN details
Knowing your annual energy consumption in kWh will help you figure out how much you can save by switching
Current meter reading – so that your old supplier can provide you with a final bill and your new supplier can start from that point