'I couldn't believe what I was being told' – Financial advisor Eoin McGee tackles people's money issues in new show
Fans of Brendan Courtney’s hugely popular series This Crowded House will be familiar with financial advisor Eoin McGee, whose no-nonsense, straight-talking approach to personal finance helped several of the show’s participants to get their foot on the property ladder, whether through renting or buying.
Now Eoin is bringing his skills to a broader spectrum of the Irish population in a new series, How to be Good with Money, which kicks off on RTE One tonight.
Over the course of six episodes he will analyse the spending of three single people and three couples of varying incomes who range from those in financial trouble to those facing a big financial outlay from retirement to a house to a holiday.
He will then conduct a financial audit, present them with a financial plan to help them achieve their goals, and follow their ups and downs as they try to implement his plan and advice.
First up are teachers Kerri and Brian from Cork who struggle to stick to a budget. They want to avoid getting into debt over a family wedding in the US and their ultimate goal is to buy their own home. But they don’t want Eoin’s advice to make them “tight” with money.
Eoin pulls no punches when it comes to finances and Brian and Kerri are in for some tough talking.
“They’re two schoolteachers on €45,000 a year so they’ve €90,000 a year, two young kids and they’re young themselves. They’ve low rent and they’re doing okay but they’ve a load of debt built up and they could have been so much farther ahead,” says Eoin.
“I have to hold people to task. I’d be doing a complete disservice to individuals if I didn’t tell them this is ridiculous.”
Eoin references a young man on This Crowded house who was earning a little over €20,000 as a kitchen porter and yet managed to save €11,000 in a year.
“It was mad how he was able to save it and here’s my couple on €90,000 and they can’t save anything. It just doesn’t make sense. I say it to my clients all the time – I’m here to tell you what you need to know, not what you want to know.”
He promises a bit of drama towards the end of the episode, "I couldn't believe what I was being told."
Eoin is a certified CFP and qualified QFA, running his own business, Prosperous Financial Planning. He is also a director of enough.ie which gives advice to those of us who may not be able to afford a one-on-one with an expert via the website and free seminars.
Many of his clients are high earners, bagging €150,000 to €450,000 a year, but he says they all fall foul of the same financial pitfalls as people earning the average wage, and it all boils down to Parkinson’s Law.
“A job will take however long you have to do it. If you have an hour to do a job it will take an hour, if you have three hours it will take three hours. And it applies to income pay rises,” he says.
It does not matter how much you earn, he says, "Twelve months after your pay rise you go ‘what pay rise?’ because your lifestyle has expanded to the income you have.”
Whatever your income or financial goals, Eoin hopes there will be one or two golden nuggets of advice to take away from each episode. However, there are three basic pieces of advice everyone can use to kick start their own plan.
The first step is, “being conscious and knowing where your money is going”.
“Don’t worry about apps or excel sheets. When you spend money write it down on your notes in your phone – ‘I spent €2.50 on coffee’. I’m not asking you to change anything, not saying stop, just write it down and at the end of the week go back through your notes and write it down by hand into a little ledger, an old copy book, and sit back and have a look,” he advises.
“People are shocked with what they spend; ‘I spent €50 this week on coffee! Do I really love coffee that much?’ I think we’re all grown up enough not to have to be told to cut back but it’s about being conscious and starting to realise where your money is actually going.
“The world is designed to get you to spend your money and if you go through life without being conscious of that it will be sucked out of your pocket.”
The second step to gaining control over your finances is to know your goal.
“If it’s the holiday this summer you’ve got a different saving goal than a deposit in five years or retirement in 20 years," he says.
“You need to identify where it is you’re going and then when you’ve done that find the best product or place to put that money. If you’re saving for six months you have to save in a bank account or something five years plus needs to be put in a long term savings policy.
"When you have an idea where you’re going you work back and work out how much you need to get there. If it’s a holiday in six months time and you need €600 that’s easy, that’s €100 a month for the next six months.
“If you don’t take €100 out in January out of your pay packet it means you’re going to be short in six months time. And it’s likely you’re going to borrow if you want to go on holiday. So, you need to automate it.”
Which brings us to his third piece of advice – making it automatic.
“The day after you get paid, or ideally the day you get paid, set up a standing order so it comes out of your bank account into a different account you’ve set up for your holiday fund. And by doing that you’re making the decision now, you’re not making the decision every month.
“If you leave the decision to be made later you won’t do it. You think ‘I’ll wait a couple of weeks. I have that wedding and this going on’ and you just kind of delay it. When you do it automatically it just happens.
“And once it’s automated, put it somewhere that’s kind of difficult to get at, like the Credit Union. I hate Credit Unions where they give an ATM card. I much prefer if you have to walk in during working hours, or on a Saturday morning, because it’s hassle.”
He adds, “ Automation is really important. The key to automation is it happens at the start of the month and then you live your life for the rest of the month.
“Where people fall down is they say I’ll be really good this month and really good every month for the next six months and whatever I haven’t spent I’ll save at the end of the month. It’s like a calorie controlled diet and at the end of the month you buy a Big Mac and you put it to one side. It doesn’t make sense.”
While it may all sound like common sense and Eoin admits it’s “ridiculously simple”, he adds, “Some people, the geniuses out there, say, ‘Oh, this is stupid. It’s common sense’ but for a lot of people out there it’s common sense but they’re not doing it."
How to Be Good with Money, RTE One, tonight (Thursday), 8.30pm