This is the first in a series of articles that will be aimed at people at different stages of life. Today we're starting with those in their younger more carefree years, but probably with an eye on financial planning - the 30 somethings! For this group there are lots of competing priorities – a house to be bought, maybe a wedding to be celebrated or a family to be started. And these also don’t take into account the holidays, cars and social life that are there to be enjoyed too... So here are our thoughts on some of the important financial challenges facing this group.

Protect yourself and your family

It starts with having a financial safety net. This really consists of two elements. First of all, we always recommend that clients have an emergency fund in place, just in case you suffer an income shock due to the loss of a job or an illness. Where it is possible to do so, we usually recommend that you have a minimum of 6 months' net income that you can call upon in an emergency.

The second element is having enough life assurance, illness cover and suitable health insurance in place. While hopefully you may never claim on your life assurance or illness policies, these are really important for the security of your family should an unwanted and unexpected event occur. Health insurance is also required, to protect your family in relation to all those medical bills, and gaining you speedy access to specialist medical services as required. 

Adopt a savings mind-set

This is an important starting point – to recognise the importance of saving for different timeframes, including retirement. We’re not suggesting that you stop spending, as life is definitely for living... But we are suggesting that you take a balanced approach to your finances; spend money on things that matter to you, avoid frittering money away and take a strategic approach to your financial future rather than simply hoping everything will turn out ok. Saving money is a key pillar of a strategic approach to your finances.

Pay yourself first

We sometimes find with clients who are in or around their 30’s that while the intention to save for medium to long term goals is there, the reality is that it just doesn’t happen. Saving for the likes of  retirement sometimes falls to the bottom of a long list of priorities and just doesn’t make the cut. So our advice is to reverse the priorities. Pay yourself (by moving money into a savings account or pension product) first, immediately after you get paid each month. As a result, something else will suffer – this will usually be a discretionary spend such as that 2^nd coffee bought every day or the extra takeaway dinner every week that actually adds little value to your life.

Understand the impact of debt

Debt plays an important role in all of our lives, whether it is a mortgage for your house or a loan for a car etc. We all know the folly of running up credit card debts and also borrowing to fund our lifestyle. However the simple availability of debt can really hurt your financial planning too. Take the example of someone who gets a salary increase. This increases your spending / saving power. Some people unfortunately see this as an opportunity to immediately change the car and borrow more money, as additional repayments can now be afforded. Yes you’re driving a nicer car, but your salary increase now has no impact on improving your financial future. We’re not killjoys who think you should save every extra euro, but salary increases should reward you both today and tomorrow. And remember, interest rates can only go one way from where they are today...

Don’t waste windfalls

Similar to the last point, windfalls that quite often are in the shape of pay bonuses are an opportunity to dial up your enjoyment of life today (after all you’ve earned it), while also improving your future. Set yourself a personal commitment to save a certain percentage of any windfalls you get for your long-term future, while enjoying the balance of that bonus today.

And really achieving balance is the key point that we are attempting to make. Yes enjoy the financial opportunities that present themselves to you today. But don’t do it at the total expense of your financial future later in life.

Avail of any “free” retirement support

This final point applies to anyone who is fortunate enough to have a benevolent employer who agrees to pay into a pension scheme for you. This will often be done on the basis of “matching” your own commitment, up to a certain limit. Don’t let this opportunity pass you by.  This is effectively free money for you and a reward for sound financial behaviour carried out by you. Always avail of this opportunity to the maximum that you are able, as it is usually offered on a “use it or lose it” basis – if you don’t avail of your employer’s matching contribution in a given year, you can’t come back looking for it later.

So there we have it, some financial "food for thought" for those in their 30s. We look forward to hearing from you as you seek to put you and your young family on to a firmer financial footing.  

Irish Life Health has announced that all customers with hospital plans will receive the benefit of a reduction to the Government Health Insurance Levy on their health insurance premiums for 12 months from their renewal date. The reduction in the Government Levy will come into effect from the 1^st of April 2022 and Irish Life Health will reflect this reduction in annual gross premiums at renewal, before Tax Relief at Source (TRS) and discounts are applied.

Irish Life Health will pass on a reduction of 9.5% (€43) in the Government Levy on the adult rate on Advanced Plans and 22% (€35) on the Government Levy applied to Non-Advanced Plans to customers with private hospital cover. Further detail on the reduction will be available to customers in their renewal notices.

For further information on this please click here for a list of frequently asked questions. 

The once-off reduction will be applied to the majority of plans available from Irish Life Health from April 1^st 2022, with the exception of the HealthGuide plan range where it will be implemented from April 2^nd 2022.

There’s been a lot of media talk over the last few weeks following the recent release of The Tinder Swindler on Netflix. How did these educated, smart women fall for the charms of Simon Leviev and end up giving him hundreds of thousands of euros? Unfortunately, it happens. Attempted scams are happening in different ways every day of the week now, and the key is to have your radar up and be naturally suspicious of any interaction with your money and a third party.

These scams are becoming more ingenious and harder to detect, so we’d like to give you a quick reminder of some of the most common ones. We all think “I’d never fall for that”, but people do – every day.

Investment scams

Of course, The Tinder Swindler was playing on the heart strings of the unfortunate women who fell prey to him. In their case, love clouded their judgement. We say it so often in our advice to clients, that emotions and investing are very poor bedfellows. Usually we’re not talking about the danger of love, but instead we’re referring to the two most common enemies of investors – greed and fear.

Time and again we’ve seen the dangers of investments that seem perfectly “normal”, but the anticipated returns are significantly in excess of those on offer elsewhere. Supposedly clever property investments in foreign markets that offer very high returns are a common trap. We all think that we understand the property market, and the risk is that our own biases cloud our judgement. It becomes too easy to ignore an often-complex investment structure that you don’t really understand, as the promised outcomes “confirm” your view of the attractiveness of a market. 

Be very careful, this is the time to really dig deeply into the regulatory status of the provider(s) and the product. Make sure that all the fundamental elements are in place and that you have a deep and complete understanding of what you are investing in. If something looks too good to be true, it usually is just that.

The helpful phone call

OK, the days of falling for the “you’ve got a virus on your computer, and I’ll help you fix it” are pretty much over. These basic scams have now progressed to calls supposedly from your bank of from Revenue, attempting to get you to log on to your computer. The scammer then tries to get you to either reveal sensitive data or download some malicious code that will give them access to your machine. Most people spot these a mile off, but unfortunately some less aware or elderly people still fall prey to these not-so-helpful phone calls.

The challenge for all of us is when you’re just not 100% sure that it’s a scam. The key is not to engage or use any information given on the call. Don’t use any supplied links, phone numbers or other information being offered to verify the validity of the call. Instead disengage, source contact details for the business that is calling you from your own independent sources – Google might be a good place to start, and then only contact the business using this publicly promoted information.

Dodgy emails and links

We all saw an explosion in these during the pandemic, a lot of it driven by people working from home. IT security was a bit more lax in many cases, as laptops were not as secure as when used within the office environment. Also, as people’s environment had changed, this left them more susceptible to new cons. The most common one was in relation to deliveries – the email from a courier company that notified of an import charge due, that would enable the release of a parcel. The payment link was an attempt to get your bank details. The problem with these types of messages is that they look genuine. In some cases, the branding closely mirrors that of the courier company.

Again the advice is never to click on these links, to only interact with organisations through access points that you have independently verified yourself. 

The challenge for us all is that as we age, it’s harder to stay up to date with technology. This leaves us more vulnerable. To support you, this is where trusted members of the next generation might play an important role in your life. Reach out to them and ask them to help you stay informed of new threats and how you can avoid them.

You certainly don’t need to live your life worrying about being scammed, but be aware of the possibility and by default be suspicious of any unsolicited approaches. Your caution will be well-placed.