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Ten steps to putting your money worries behind you

Cash problems can damage your health - so take control of your finances, writes Louise McBride


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One in three Irish people are very worried about their money, and one in four would not last a month without having to borrow money if they lost their main source of income. These are the findings of research published by Bank of Ireland earlier this month.

Other research, from price-comparison website switcher.ie, found almost 40pc of people dip into their savings to cover everyday bills, with about one in four using their credit cards for such bills.

These findings show how poorly many people are managing their money - and how likely people are to worry about it. Money worries can have a debilitating effect - leading to depression, anxiety and shame. "For a lot of people, financial stress and anxiety manifests itself in physical health problems, such as skin and gastric problems," said Michael Laffey, the regional manager with North Leinster's Money Advice and Budgeting Service (MABS). "Money worries and anxiety can lead to lack of sleep - and to relationship breakdowns."

It's not just people on low incomes who worry about money. "I have seen greater levels of anxiety amongst those on medium incomes - because they often have bigger financial responsibilities and may have taken chances during the recession," said Colm Roantree, a senior executive in wealth management with Irish Life. One in four of those struggling with money are high earners, Bank of Ireland's research found.

The best way to stop worrying about money is to be in control of your finances. Here are 10 steps which should help you get there.

Take time out

"The obstacle to getting into control of your money is very often time - as many people are very busy today," said Laffey. "You need to take the time to sit down and look at the money you have coming in - and where it is going. A lot of people on high incomes will invest in time to go to a gym, as they can see a link between the gym and their health. It's equally important, though, to invest in time managing your money - as this can help to eliminate money worries, which is in turn important for your mental health and wellness."

Examining your spending is also a good way to identify areas where you may be wasting money.

Set budgets

Set yourself a weekly allowance for groceries, bills, socialising and so on. Be sure it is within your means. Plan, and set allowances, for long-term expenses too - like a child's confirmation. "It's the less-frequent expenses which can catch people out - and which people may find it hard to anticipate or budget for," said Laffey. "They then may end up paying for these bills by credit card - which may create a debt issue."

Watch the small stuff

It's very easy to overlook small daily bills and not to realise the extent that they eat into your money. Let's say, for example, you're spending €2.50 a day buying a coffee on your way into work. That adds up to €562 a year - assuming you work for 45 weeks a year. "As you may be paying for your coffee with small change every day, you may be unaware of the cost adding up," said Laffey. "However, if a bill for €562 came into your home, you'd notice it. Small bills accumulate."

Watch technology

Technology has made it much easier to access and spend money - for those of us who are comfortable with and well able to use technology. However, technology has its downsides too. The ease with which money can be spent on debit cards, in particular contactless cards, can make it easy to lose track of how much you're spending.

"While technology at one level makes things more accessible, it's a double-edged sword - it can make it harder for people to manage their money," said Laffey. "None of these machines which allow you to tap your debit card to pay for something will tell you if you have enough money in your account to cover the bill - or remind you that your monthly mortgage repayment is about to come out of your account. If you go to an ATM to take out €20, the smallest note it may give out is €50 - when all you want is €20. This leaves you with €30 extra in your wallet - which you may end up spending." So be disciplined about how you use technology to access your money.

Ringfence your money

Make sure you always have enough money in your current account to cover your monthly bills - and other once-off or unexpected expenses.

Ensure that any monthly bills (such as electricity or rent) and debt repayments (such as your mortgage) are paid within a day or two of your salary coming into your account, advised Trevor Booth, head of financial planning with Mercer. This will give you a greater sense of the disposable income you have left for the rest of the month and should stop you dipping into money which you had in mind to cover bills.

Think in lifetimes

Understand how your financial priorities and commitments will change as you go through life - and plan ahead for these changes.

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"The ages of about 22 to 65 are the productive years - where you're working, raising children, buying your home and so on," said Roantree. "There are some very high-pressure financial times in your life - such as when you're repaying your mortgage and, if you're a parent, raising your children. At these high-pressure times, you could find that there's absolutely no surplus money. Then there are times in your life when you do have surplus money." So in the early stages of your career - when you may not yet have financial responsibilities such as a mortgage and children and when you may have plenty of surplus money, save wisely. Save for short-term goals (such as insurance or a holiday), medium-term goals (such as a new car or home) and long-term goals (such as your pension or your child's college fees).

"Anticipate things which are going to happen rather than dealing with things as they happen," said Roantree.

Have emergency fund

It's important to set aside some savings to tide you over at times of emergency, unforeseen problems - or when income is unexpectedly low.

"An emergency fund should have three months' of your net income in it," said Roantree. "Most people can catch a breath and get things sorted [after an emergency] within three months. The reasons you'll need an emergency fund are usually unanticipated - such as a car accident, someone being unwell or the loss of a job."


Prioritise the expenses which must be paid (such as rent, mortgage, grocery and utility bills) over discretionary expenses (such as luxuries, holidays, designer clothes, and eating out).

"Be aware of the competing struggle between needs and wants," said Laffey. "For example, a child may need football boots - but it may be the more expensive designer boots that they want. Often it's [wrongly] the person who's screaming loudest for money who ends up getting it."

Don't impulse buy

"If you have money saved, put the majority of it away into an account which requires at least one month's notice for withdrawals," said Roantree. "Doing so should stop impulsive buying. Furthermore, every time you go to buy something substantial, ask yourself what you will not be able to buy if you go ahead with this big-ticket purchase."

Deal with problems

Don't bury your head in the sand if you have money problems. "Be honest with yourself if you're in financial difficulty," said Roantree. "Meet with a professional adviser. Respond to correspondence. People who have money problems can get to a point where they can't sleep at night - and where they won't read a letter that arrives in the post. However, those who deal with the problem and any correspondence from the start tend to end up with a better solution."

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