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Spending your Christmas Money wisely

Friday, 27 November 2009

Liam Croke: Money Expert

Liam has worked in the financial services industry for the past 21 years and seen by many as an expert in the field of personal finance. He is a qualified financial and mortgage advisor.

In the past he has held senior management positions with two well known financial institutions along with one of the "top 5" accountancy practices in Ireland.
Liam gives his advice and wisdom on a daily basis to those who are just starting out to high net worth individuals. He currently works for a financial services company based in Limerick.

He is frequently asked to contribute and comment in all areas relating to personal finance on both national and local radio stations. You will have heard him for example recently on RTE's "The Mooney Show" and on Newstalk's "The Right Hook."
Liam was invited to make a presentation to the Joint Oireachtas Committee on Social & Family Affairs on trends and levels of personal debt in Ireland. He made his presentation to the committee on the 24th June 2009.

Liam is author of 4 personal finance books:
. The best selling "The Mortgage Maze Explained" published by Currach Press in 2006.
The best selling book "Your Money Your Life - Managing your finances in today's Ireland" published in 2007.
"I'm Broke! A teenagers guide to Money" - Published by Crabtree and distributed in the UK & USA in 2009
"Stash or Splash" which is being released in Ireland and the UK in September of this year.

. Liam previously wrote a weekly personal finance column for The Sunday World entitled "Mr. Cash - How to Save it, Spend it, Earn it" and has also written articles for the Sunday Business Post, the Evening Echo, the Sunday Independent, the Irish Sun, Prudence Magazine to mention just a few.

Liam Croke:

The question is how can we still celebrate this time of year without breaking the bank?

Here are some of Liam's top tips:

1. Budget and Plan - Make a list of all those you are going to be buying presents for and how much you can allocate to each. Write down an idea or two alongside their names so you are not spending more than you need to and not trawling in and out of shops looking for ideas.

. Avoid impulse purchases - give yourself a day or two to think rationally - do you really need or want it?

. Pay with cash whenever possible

. Always pay more than the minimum payment on credit cards each month, better still pay the full amount on time all of the time!

. Avoid "buy now pay later" offers that merely postpone your debt

. If you are going to use your credit card to purchase presents don't let your credit rating slide - be punctual and pay on time, if not then your credit rating will go down and the cost of credit in the future for you will go up

2. Look at your wardrobe! - Do you normally buy yourself a new outfit for yourself and the kids? I know of people who buy outfits for Christmas Eve, Christmas Day, St. Stephens Day and New Years Day! Look at your wardrobe and that of the kids and decide what you really need for the next month.

Planning for these purchases and budgeting for them will help you buy what you really need and want rather than simply snapping up whatever's on sale. This way you will not overspend on clothing that you just don't need - check and see how many items of clothing in your wardrobe still has a tag on it!

. Be thrifty - our parents had to and we should to! Change where you shop, what you buy, make do and mend instead of buying replacements

3. Secret Santa - If you normally buy presents for lots of family members why not agree to a secret Santa instead of buying a gift for everyone? Set a cash limit for everyone which means you can still get one very good present without breaking the bank!

. Compare prices before you make any major purchases

. Stay within your spending limits/budget

4. Limit your nights out - Don't feel that you have to go to every Christmas party. Yes, it's great to celebrate but if you are out every other night it is easy to spend too much and be left with a credit card bill in January that leaves you feeling very blue indeed!

5. Check out the internet for your presents - Research has found that the reason many people will use the internet is to compare prices, avoid crowded stores and buy presents that are cheaper on-line with the most popular items being CD's. book's and DVD's.

Just a quick word about store cards - don't get suckered into taking one out because of a promise of a discount on items you purchase in a particular store.

Retail outlets do not give you their store cards because of their good nature or generosity of spirit, they give them to you because they want you to use them and make money from you, which of course we help them enormously.

Remember, if you take out a store card then you will have to pay the Government stamp duty on the card of €30.

I was in a store a couple of months ago and there was a woman in front of me purchasing something for €80. The sales attendant started the sales pitch about the store card and how she would get 15% off this purchase if she signed up for the card today. Nothing was mentioned about the rate of interest, who the card was with etc. but equally the woman did not ask any questions either.

So, the woman was spending €80 and got a discount of 15% which was €12. Now nothing was mentioned about the annual fee for the card which was €30 so it was actually costing this woman more for her purchase using the card even after the discount then it was had she paid for it in cash.!! The cost if she paid for cash was €80 but the "real cost" using the card after the discount was €98!!!