Frank Conway gives the lowdown on how to get the best value from your insurer and how to teach teenagers the value of money.
Q I'm spending thousands of euro on insurance a year – and I need to cut back on this. My insurance bills include private health insurance, car insurance, life insurance and home insurance. How do I go about searching for the best insurance deals – or getting a better deal out of my existing insurer?
Stephen, Walkinstown, Dublin
A Two words: Brass facts! Brass because you are going to need a brass neck and facts, because you just need facts – lots of them when it comes to insurance.
I'll deal with home and car insurance now – and health and life cover a little later. First, when your insurance policy comes in for renewal, write down all of the important features of the policies on a single slip of paper; level of cover, excess amounts (that is the first part of a claim you must pay yourself), the number of years no claims discount you have, and so on. Then call at least four insurance companies to see who will offer you the best deal. Use your notes to accurately compare providers. Make sure you are comparing like-for-like, take notes.
This is where the brass comes in. You can negotiate! Don't be shy, be prepared to haggle and try to have a little fun, see how much your insurance company really loves you. I have always had a lot of fun here... and success also. Pick your battles. One year, my insurance provider came in with a price so low I just grabbed the offer with both hands, which is why you really need to have your homework done in advance.
On home insurance, it really is important to watch out for the level of buildings cover as well as contents cover. A good website to figure out your home's replacement cost is the website of the Society of Chartered Surveyors Ireland (www.scsi.ie).
On health insurance, this really can be a minefield. Check out the Health Insurance Authority's (www.hia.ie) comparison calculator to compare policies. Use the new year to review your life insurance (or mortgage protection) policy. You could save thousands of euro over the remaining term of your policy simply by switching, according to research by the National Consumer Agency.
Q My children are coming into their teenage years and there is no end to their demands on my pocket. They want the most expensive clothes and gadgets, the most expensive hair dos – not to mention money for their social life. How do I go about teaching them about money so they make more realistic demands on my pocket?
Barbara, Raheny, Dublin 5
A Just say no! They'll learn the value of money quickly. Teenagers can be very adaptive and extremely resourceful when it comes to money.
But teaching teenagers the value of money and mechanics of money are two completely different things and it's the mechanics of money where teenagers need support.
How money works; how taxes impact our true earning power; how time impacts the cost of interest we pay on loans; understanding the difference between simple and compound interest. These are all lessons that must be taught in a structured setting. This brings us to the role of personal finance in society and why schools must begin to include the basic workings of money as a standalone topic.
Frank Conway is co-author of 'Cents & Sensibility, A Financial Guide for Young Adults'. He also founded irishfinancialreview.com