Performing a credit check on yourself is a good idea
I don’t know how many of you are sticking to New Year financial resolutions five months on, but I know some may be struggling with them - possibly by having taken too much on.
Some people set themselves up for failure from the start by trying to accomplish too much in too short a space of time, and others don’t write down what they want to achieve and forget about them.
I am very much a to-do person, and I know if I write something down on my to-do list each day, I have to complete it. It annoys me into completing the task so I am going to give you a selection of financial to-dos and it would be great if you accomplished even one of them.
There are eight, and while not all of them may apply to you, write them down. Take one task you need to complete by the end of this month and write it somewhere visible, where it will be a constant reminder to you.
1. Set up a new savings account
Whatever reason you might have for saving, if you haven’t set up a new account then please, do. It will take 10 minutes out of your day. Work out how much you need and by when and start saving that amount each day, week or month.
The easiest way to make sure you stay on track and avoid temptation of spending this money is by having it deducted from your salary, so ask your employer to arrange this.
2. Carry out a credit check on yourself
You should be doing this every year just to make sure the records held by the Irish Credit Bureau, are correct. It will cost you just €6 to do this (submit your request at www.icb.ie) and it is a very important exercise to carry out.
For those in arrears it will also show you what your lender is saying about you to others. This is very important to know particularly for those who have had their mortgage restructured. What effect is this having on your credit rating? Do the check yourself and find out.
3. Review your life assurance policy
Don’t assume what you are paying each month can’t be improved upon. In most cases I come across, it can be. Get out your policy document and have someone your trust review it for you. You may have the wrong type of policy, you may not even need the policy you have but unless you investigate it you will never know.
I met a couple last week paying €258 per month for a mortgage protection policy when all they needed to pay was €74.
4. Save rather than spend every fiver you have this month
I want you to try and not spend a five euro note this month. Instead I want you to put it into a jar or an envelope. Every time you have a fiver in your wallet or purse or you get it in change, you can’t spend it. Put in into the jar and at the end of the month see how much you have saved – you might be surprised.
One woman, I read about did this and over three years she saved apparently $12,000.
5. Move money from your current a/c to an account earning more than 0%
I meet people all the time who have way too much in their current account earning little or nothing in interest. It is actually costing them money to have it on deposit. If you are one of these people then stop.
Leave an amount in your current account that you need to, if you wish to avoid paying fees, and you want to have a small buffer, but any excess move into a fixed term deposit account or an on-line account.
6. Move money into your current a/c to avoid paying fees
If you haven’t the time or energy to move current account providers, then move money that you have on deposit with, say, your credit union or any institution for that matter where the interest rate you are earning is poor.
If you want to avoid paying fees with the two main banks, you need to deposit and maintain somewhere between €2,500 €3,000 in your account at all time. And whilst you will be earning zero interest, the up-side is you will avoid paying up to €170 each year in fees.
So, if you place €2,500 in your current account and it stops you paying €170 in fees, that’s a return of nearly 7%.
7. Look at your monthly budget again
Look over what you spent your money on last month. Sit down and spend 10 minutes reviewing where your money went. And if you don’t have any system for tracking your cash flow, make this the month that you set one up.
8. Make a will
If you die without making a Will the law will decide what happens to your estate. Unless your circumstances are very straightforward, this could leave your loved ones with a financial nightmare.
Do you know what would happen to your children if you and your partner were to die? They could become wards of court and a judge will decide who will be their guardian. By making a will you make provision for how they will be brought up and by whom.
Put this on your to do list and make it your goal to complete it by the end of the month. Contact your solicitor now.
Liam Croke is MD of Harmonics Financial Ltd,
based in Plassey. He can be contacted at firstname.lastname@example.org or www.harmonics.ie