I have decided not to add to people's misery by detailing the current myriad price rises in the cost of living and how they are affecting people.
The statistics are everywhere if you really want to see them.
While we can all feel the squeeze in our daily lives, most of the increases are completely outside our control.
In a crisis like this, I think it is more beneficial to take action on what you can actually personally control.
Knowing precisely your income and expenditure and if you are using your money correctly is one such thing.
This knowledge will enable you to make better financial decisions and think more about needs and wants, unnecessary spending and potential savings.
Putting a figure on how much more exactly your gas or electricity bills are costing you will focus your attention on exactly how much you need to save elsewhere.
Likewise with food spending. Analysing your receipts will give you insight into your spending habits so you can set a budget to keep you on track.
Going into debt is unavoidable for some but, if this is necessary, try to stay away from less regulated money lenders and high interest loans and look to family or maybe the Credit Union to get help.
Ditch the car if you can
As we shudder at the eyewatering prices of running a car these days, is there a less expensive way to get to work?
The summer weather brings us outdoors more so why not consider getting in on the bike to work scheme?
This is a Government scheme where you can buy a bike and equipment up to the tune of €1,250, or an electric bike up to €1,500, tax-free up to every four years.
How does it work?
You love that shiny new hybrid bike in the window of the local bike shop but you cannot justify the €1,000 price tag.
Plus the rain gear, helmet, locks, and those obligatory tight shorts would add further cost, let's say round it to €1,250.
Through the bike to work scheme you can purchase the bike and safety equipment at a much lower cost.
Check that the local bike shop is one of the 384 approved ones and then you agree with your employer to sacrifice some of your salary so they can provide you with this non-cash benefit.
They buy it and you pay them back the amount up to €1,250, less the tax.
That's correct - you do not pay tax, USC or PRSI on this €1,250 that you earn from your employer if you put it towards a bike.
The €1,250 is taken from your gross pay over an agreed period of time up to a year, so you are taxed less on your pay during this time.
You are diverting the tax, PRSI and USC that would have had to pay to Revenue and instead paying it to the bike shop through your employer.
Revenue gets less, the bike shop gets more. You get more. You get the shiny new bike, the gear, the healthier and fitter you.
On top of that the savings on fuel, parking and traffic jams.
Check it out on www.biketowork.ie.
The Smarter Spender
Money is better in your pocket than that of the Revenue.
In view of the current pressures on personal finances, over the next few months I will detail the different ways in which tax can be claimed back from the Revenue.
Today I will discuss flat rate expenses relief for a trade or profession.
If employees of a particular occupation, for example mechanics, retail workers, nurses or teachers, routinely incur expenses which are related to their work and not paid for by their employer, a flat rate expenses allowance is available to them.
This is a lesser-known tax relief given to nearly 200 trades or professions.
Simply put, if you are in one of these occupations, your taxable pay will be reduced by the amount of this relief.
The tax relief is designed to cover items like uniforms, tools and various equipment related to work.
The Revenue publishes the eligible job roles for whom this relief is available on its website www.revenue.ie.
Q&A
I am always intrigued in my line of work by how people behave with money; how they save, spend, deal with crises and come to decisions.
When using bank accounts and saving, the term 'mental accounting' is an important influence on our decision making.
Mental accounting is simply how we categorise the money we save.
Simply by naming a rainy day fund, car fund, or children's education fund it motivates us to save and makes it less likely we will get side-tracked.
Providers of bank accounts, investment products and savings plans know this and help boost the likelihood of savings uptake by using things like online calculators and different pots and 'vaults' to help you along.
Surveys show that those who save in this way with set targets are more likely to save more.
Our own An Post did a survey recently and revealed that over eight in 10 expect to look more closely at their spending and where they can save money in the next 12 months.
Their new bank account offering, the 'Money Manager', helps customers do this.
Their press release states this account is 'fully personalised' and 'allows users to stay on top of their spending, helping them to reach their financial goals'.
It allows them to track finances by giving them spending visibility, budgeting tools, status alerts and insights into their spending.
Sounds good and I suspect there is a high level of trust and brand awareness for An Post in Ireland anyway.
As always, check the small print. Compare the fees, charges and usability with other offerings on my favourite trusted money site www.ccpc.ie.
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.
