Q I’m really starting to feel the higher cost of living coming home and need to “get on with the program” and start proper monthly budgeting. I haven’t done this before as I’ve always had a nice cushion in my salary. Where should I start?
A The rising cost of living has made many people aware of the need to fret financially. Kevin Johnson, executive director of the Credit Union Development Association (CUDA), recommends that every person or household should have some form of financial plan or budget.
Start with the basics, he says. Based on how often you get paid and how much, calculate how much you need to spend.
To do this, you need to calculate what’s coming in, such as B. Your salary and bonuses, if any, and what needs to go out each week or month, such as: B. Rent or mortgage repayments, loan repayments, utilities, insurance, subscriptions or other monthly bills and grocery expenses.
It’s important to think about saving or maybe starting a retirement
Once you’ve calculated your income and expenses, you can see what discretionary amount you have left and decide what the best use of it is, Mr Johnson said.
It can be tempting to think of this as money for social spending or shopping, but it’s important to think about saving or maybe starting a pension if you don’t already have one.
Although every situation is different and some prefer or need more comprehensive financial planning than others, a good budget is very important he said.
Q My husband and I are expecting our fifth child. As the eldest is six years old, our children are all very young. Between sky high daycare fees and struggling to balance a career and kids, we decided I’d stay home to take care of the kids. My husband has a good pension and says I’m entitled to it when he retires. Am I secure enough to rely on my husband’s pension?
A Expecting to have to rely on your spouse’s pension when you retire can be a costly mistake, according to Ray McKenna, partner at pensions specialist Lockton.
First find out exactly how much pension you will receive from your husband’s pension. It may not be enough for you to make ends meet in retirement.
Ideally, don’t rely on your husband for your pension
Also make sure that your husband’s pension will continue to be paid if he dies before you. Her husband may need to take precautions to ensure that happens, Mr McKenna said. Ideally, don’t rely on your husband for your retirement, he said. However, without an income of your own, it will be very difficult not to do this.
Consider your statutory pension entitlement. The time you spend outside of work caring for children at home (up to a maximum of 20 years) counts towards the state pension, although you must apply for the home care loan, Mr McKenna said.
Q I want to change jobs and have received two great jobs from my recruitment agency. One of the job descriptions describes the employee benefits package and mentions income protection, the other does not. I know this is some form of wage protection in case I get sick, but I don’t know how much of a benefit it could be. If I am unable to work for a period of time, does it mean that I will receive sick pay or social assistance?
A In its simplest terms, income protection is a valuable type of insurance coverage that pays you an income if you are suddenly unable to work for an extended period of time due to an accident, serious illness or injury, according to Siocha Costello of Aviva Life and Pensions.
Income Protection provides a periodic cash payment to replace part of your lost income and continues to pay until you are able to return to work or retire. The statutory sick pay is valid for three days up to a maximum rate of 110 euros per day and is to increase to 10 days by 2025, but is not designed for long-term income.
Statutory sick pay covers you for three days up to a maximum of €110 per day
Whilst the State Disability Allowance provides financial support for those unable to work due to a protracted illness or injury, it is only €203 per week, well below an average weekly wage and very difficult to live on, especially if you are on a mortgage, young children and have other financial expenses that need to be paid each month.
In contrast, income protection could pay out up to 75 percent of your total income, depending on your policy, Ms Costello said.
https://www.independent.ie/business/personal-finance/your-personal-finance-questions-costs-are-shooting-up-so-how-do-i-get-to-grips-with-budgeting-42067943.html Your Personal Finance Questions – Expenses are skyrocketing, how do I go about budgeting?