Wednesday 17 January 2018

Make me Richer with Sarah Stack

Car insurance

The price of insurance for young male drivers is still very high - as they are seen as high risk.
The price of insurance for young male drivers is still very high - as they are seen as high risk.
Sarah Stack

Sarah Stack

Young male drivers are still getting hit by insurance companies when it comes to getting their wheels on the road. And it appears to be the same when a father tries to get his son on his policy.

The 45-year-old accountant from Dublin 15 wants to put his son, a student, on the books for his 2010 Ford Mondeo.

He has a full licence, with two penalty points, and more than nine years' no-claims bonus.

He son has full licence since last June and neither has been refused insurance in the past.

But the prices for fully comprehensive insurance would be enough to keep him off the road.

Best: €2,261.34 KennCo Unique

Avoid: €3,474.45 Aviva

Saving: €1,213.11

www.chill.ie

HOME INSURANCE

Most of us can only dream of waking up every morning overlooking the Atlantic Ocean in the seaside village of Rosses Point in Co Sligo.

But things can go wrong and your home needs protection.

We price insurance for a couple who are almost in their 60s and live in a property worth €300,000.

They have no alarm, want building cover of €210,000 and contents cover of €30,000. They have not made a claim for five years.

The policy includes accidental damage and a €300 excess.

Best: €200 Chrome Insurance

Avoid: €448.36 Axa

Saving: €248.36 a year

www.chromeinsurance.ie

MORTGAGE REPAYMENTS

With property prices on the rise it may be time to try and upsize your starter home, and your mortgage, before you're priced out of the market.

That's for the lucky ones who have managed to escape being part of the negative equity generation.

We priced trade-up a mortgage of €350,000 on a house worth €450,000 over 25 years.

Best: €1,844 KBC variable rate 3.99 per cent. (APR 4.06 per cent)

Avoid: €1,985 ICS variable rate 4.70 per cent (APR 4.80 per cent)

Saving: €141 a month/€1,692 a year.

www.mortgageapproval.ie

LIFE ASSURANCE

When buying a house, you'll have to add life assurance to cover your mortgage on to the monthly outgoings.

But remember you do not have to take out insurance with your lender. Shopping around can get you the right price.

We checked out life cover for a non-smoking married couple, who are both 39 years old.

The plan covers €250,000 over a 25-year term.

Best: €49 Irish Life

Avoid: €60.90 New Ireland

Saving: €3,546 over the term of the mortgage

www.discountinsurance.ie

DOG INSURANCE

No matter what your financial circumstances, the family pooch will usually be the last to go without.

Regular trips to the vet can add up.

Pet insurance for a three-year-old beagle will save on some of the growing costs.

Best: €179.56 PetInsure.ie

Avoid: €223.28 Allianz

Saving: €43.72 a year

www.petinsure.ie

CLARIFICATION

Unlike a pre-NCT test, which is an examination of a car by the garage to identify likely test faults, the €99 NCT service from Advance Pitstop referred to in last week's column is an actual standard service, involving an oil and filter change as well as headlight adjustment.

Key to financial stability is good planning

THE old saying that money doesn't buy happiness is true – however, it certainly helps determine a certain lifestyle for you and your family.

Financial security is hugely important – for an ordinary family, it can mean the ability to send their children to college, the freedom of a parent to take time out of work to look after children, or the chance for a couple to enjoy their retirement years.

However, many people make mistakes that could jeopardise their, and their family's, financial security.

One such mistake is relying too much on annual income. While most people plan and save for a deposit to enable them to move house, many families don't plan for their children's education or higher mortgage costs.

They assume any extra expenses will be met from future income – that's an uncertain road to follow.

Another big mistake I often see is people failing to plan for their own death.

No one likes to think of their own death, and for young people especially, the likelihood of death is low.

The unfortunate thing is that if you are the main income earner, your premature death could leave your family financially exposed without adequate resources to live the life you would have hoped for them.

If you want to make sure you and your family are well set up financially, here are five steps worth taking.

Have a plan

You cannot spend everything you earn and need to have a discipline around saving.

Your annual income needs to meet not only your own spending needs today and tomorrow, but also your retirement spending needs.

Having a clear plan, which is structured around what you want, is the best way to ensure you'll have enough money to live the lifestyle you hope to have.

Plan early

Human nature being what it is means that we tend to focus and prioritise our shorter-term plans over longer-term goals.

It's important to start planning early for retirement.

We are all living healthier and longer lives and can enjoy a higher standard of living in retirement.

However, this comes at a cost. The most effective way to build up retirement savings is a pension.

Beginning to plan early enables you to maximise the tax reliefs available when saving through a pension and enables these savings to grow tax-free.

Keep an emergency fund

No matter how well you think you can plan expenses, there is always going to be some unexpected thing (good or bad) that comes up, such as a wedding or an emergency operation.

Having cash available to you at short notice helps meet these needs.

Insure yourself well

Always have a good insurance plan in place. A good plan is not just about making sure you can pay for your children's education, move house or have a comfortable retirement; rather it's about making sure that if something happens to you, your family is protected.

If the assets you have accumulated over your lifetime aren't sufficient to pay off your debts and provide for your family for the rest of their life, then it is really important to have a good insurance plan.

Keep your plan under review

Whatever financial plan you put in place, your plans will change over time – life happens; your priorities change. Your plan in 10 years' time will not be the same as it is now, so you need to keep reviewing.

  • Sandra Rockett is head of financial planning in Davy.

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