I’m a strong advocate for financial education with the goal of improving financial capability, which is the ability to manage, save, discuss and become more resilient with money.
It is a huge missed opportunity in this country that there is not a standard module in secondary school or indeed at third level, to educate younger people on how to manage money, tax, insurance, savings, pensions and investments. Some of us manage it badly when we are finally left to our own devices, but we would be forgiven for this, as we never learned about it growing up.
So, I was glad to read of two financial education and awareness initiatives that are currently ongoing in Ireland.
Money Quiz
There is a European-wide money quiz, going since 2018, which is giving financial education for young people a more prominent platform. This quiz is done online and it pits 13–15-year-old students in Ireland’s schools against each other and ultimately against those from 28 other countries. The winners are brought to Brussels in May to take on the rest and be in with a chance to win €5,000 for their school.
If you fancy your chances, you can even take a quiz yourself on the site www.ebf.eu.
This initiative of the Banking and Payments Federation and the Business Studies Teachers Association of Ireland is now encouraging schools to enter the competition. Good luck to all students.
Global Money Week (GMW)
This is a more extensive annual global campaign which looks to build awareness, knowledge, skills and resilience around money management and decision making for young people.
During this week activities are planned by public, private and not-for-profit organisations to encourage young people to learn and interact with money more effectively. It was headed up by MABS last year in conjunction with schools to give workshops and deliver awareness programmes. Following a survey of 1,400 teenagers during last year’s GMW MABs found:
- 40% of young people in Ireland use social media to learn about money
- 61% are using a mobile phone/app to keep track of their money and this trend is set to continue
- More than 80% of young people are shopping online
- The vast majority (96%) of young people who took part in the survey report that they feel it is
important to talk about money.
Getting educated earlier about money is vital for ensuring the population in general becomes more financially capable and makes better money decisions.
Mortgage matters
You are sitting pretty at the moment if you are on a fixed mortgage rate, as your monthly repayments will not change while fixed. When I say sitting pretty, I use that term in contrast to those exposed to the caurrent rapid interest rate rises.
The Central Bank is reporting that more than 90% of new borrowers are opting for a fixed rate, thus avoiding the rollercoaster of rate rises during the past year.
Nevertheless, there are many who are coming to the end of a fixed rate term into a much different interest rate landscape than even six months ago. The options are to automatically revert to a variable rate, which is invariably higher, or re-fix, or switch providers to try and get a better deal.
ECB rates have crept to two per cent in the past year and are likely to go up again in March. In the UK, rates have risen more sharply, with more than nine rate hikes recently, and a four per cent base lending rate at the moment.
Those who are on tracker rates and standard variable rates would be wise to take a serious look at this now, as the tracker in particular will rise in line with each ECB rate hike.
Many first-time buyers must be feeling nervous with rising interest rates, and the time pressure to try to lock in the best fixed rate for their new mortgages. But what if there is a delay in the process? What rate do you get?
I asked Helen Martin, of Humdinger Mortgage Brokers, this recently, and while there is no standard way lenders approach this, the borrower would need to have a loan offer and closing documents returned to get the previously agreed rate.
Consulting a broker may help clarify the best steps to take to get yourself the best deal.
The smart spender
Grocery shoppers need all the help they can get at the moment with general price inflation being felt by everyone.
Probably the most well-known of all the grocery store discounts is the Dunnes Stores €10 off €50 spend vouchers. For those who don’t shop in Dunnes or have been living on another planet, they are, according to the Dunnes’ website, “iconic”. The store gives you a €10 discount voucher every time you spend €50 or more in-store or online, two vouchers for €100 spend and so on up to four vouchers for a €200 spend (all valid for the discount on your next shop).
For those whose weekly shop costs €50 upwards, it is a no-brainer, as they say. If you download the Dunnes app, you don’t need to keep paper receipts as the app will record purchases, vouchers and discounts.
Tips on how not to overspend
Look at your bank account. Tick off each item over the past month and ensure you understand where the money went.
Regulate payments For simplicity try to move all your direct debits or monthly subscriptions to one day, preferably the day after payday. This gives you clarity that after these automatic deductions you have control over the rest of your monthly budget.
Cash out If you are struggling to make it to the end of the month and worried about spending, take a look at what is available, take it out in cash per week and just use this cash. The dwindling cash in is a constant reminder that you need to be careful.
Hide the cards Yes, people do freeze credit cards in ice so they don’t use them. This is a bit extreme but the idea is to hack into spending behaviour.
Call the Money Advice & Budgeting Service on 0818 07 2000
Morgan O'Connell is the first financial coach in Ireland holding the Certified Financial Planner Accreditation. He specialises in goal setting, time management and financial education. Contact him at morgan@arrowcoach.ie.
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