Complete your financial self assessment
A financial self assessment will give you a clear picture of your finances and will help you to identify where you need to make changes. We recommend that you complete this step at least once a year, particularly if your income changes or you experience an unexpected or big life event (e.g. Marriage).
Calculate your income
In order to have a clear picture of your finances, you will need to know your sources of income. If employed your pay-slip will show you what you earn from that employment. Do not include overtime or any bonus as part of your basic wage. Insert this under the relevant heading. You may be getting social welfare benefits such as unemployment benefit and children’s allowance so make sure to include these in your income. You can get more information about these benefits from the local social welfare office or at www.welfare.ie. If you have extra earnings that you would classify as income, such as interest on savings or investment income, include them too.
Calculate your outgoings
Try to keep track of your outgoings. Although it can be an onerous task, it can help and it may be easier to categorise them into groups:
- Daily expenses: This can include milk, lunches, bus fares, taxis, newspapers, phone credit to name just a few. Ask for and keep receipts for each item you buy and enter the cost of the item in your spending diary which can provide to you.
- Ongoing expenses: These include household utilities such as electricity, gas, TV packages, phone, broadband and rent. You should retain copies of your bill as well as bank statements to give yourself a more precise idea of how much you are spending.
- Loans & debts: You should list your monthly/weekly repayments on each debt, as well as writing down any arrears you have on your mortgage or other loans as this will affect your future budget.
- Savings: You may be making regular savings to a deposit account or to our credit union. You should list all those savings or deposits you make on a regular basis. In order to have a full picture of your finances, you should list the balance you have in any of these savings accounts.
- Other intermittent expenses: These may include items such as medical expenses, holidays, birthdays, insurance or TV licence.
If you find you have a surplus after reviewing your financial situation, you must then think about how you can make effective use of it. It might be saving for a child going to college or you might decide to pay off some of your loans quicker (highest interest first).
If it turns out you are spending more than your income, you need to assess how you could cut back on expenses.
If you are struggling with any loan repayments, you should contact your lender immediately to discuss your options.