At a time of recession many people focus on the need to have a cash reserve for future plans.
That’s all very well. But can you afford to save money while things are so tight?
A better question is ‘Can you afford not to?’ Creating your own emergency fund is important – as it will give you the peace of mind of knowing that, if the worst were to happen, you would have a cash sum to fall back on.
We all have different reasons for saving and depending on our circumstances at the time and our future plans, a bit more forward planning is needed where money is concerned, for example:
RegularSaver.ie offers you:
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If you’re thinking of your children’s education you should do your homework now!
You will obviously want to give your children or grandchildren the best possible start in life. That could well mean paying for them to go to a fee-paying school and then on to university or college.
How much could education cost?
Did you know that just one year’s fees for a day pupil ranged from €2,900 at Villiers Secondary School in Limerick to €11,430 at St Columba’s College* in Dublin?
And whether you opt for private or State schooling, you will almost certainly want your children to go on to university or college.
For the present at least, it appears that there won’t be any fees to worry about. However, there is still a substantial cost to sending your children on to third level education - even without having to factor in any accommodation costs. According to campus.ie in 2008, estimates of cost varied from €7,500 to €15,000 a year.
Will you be able to afford costs like those?
Few of us can afford to pay for private schooling – or even third-level education – out of our salary alone. So, although it may all seem quite a long way ahead, it makes a lot of sense to start planning now. By doing that, the costs involved can be spread over a greater number of years, without becoming a huge financial burden later on.
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It is possible to benefit from Euro Cost Averaging In for Lump Sum Pension Contributions by using RegularSaver.ie due to the absence of exit charges and no minimum timeframe.
Euro cost averaging works like as follows:
Regular investments are made to an investment account. For this example we will say on a monthly basis. To keep things simple we will also say that the investment account is allocated 100 percent into one managed fund. We will use €100 as the monthly investment figure. Now, depending on how markets perform this fund's price is going to fluctuate from day to day. So let's look at a six-month example in the table below.
In the example above, you have invested €600 and your account is now worth €791.73. Over the six-month period, you paid an average of €14.33 per unit. If you would have taken all €600 and purchased the shares at the beginning of the six months, you would have purchased 30 shares and your account would now be worth just €750.00. For this example, using Euro cost averaging has increased your account by more than 5%.
This can be done through an regular investment account where you can have access to your money but at the same time average into an investment. This investment could then be contributed to a pension by way of a lump sum payment (subject to tax relief being available at the higher rate) benefiting from the averaging in described above once the client was satisfied they did not need the money and could contribute to a pension. This could be after 1,2 or 3 years depending on an individuals circumstances.
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