60,000 Irish children will make their Holy Communion this year. On average each child receives more than ¤400.00 giving a total annual pot of ¤24 million euro that seven year olds are given to literally play with. But at this age are they mature enough to handle money- let alone such a large amount?
Regardless of the answer this cash is coming their way so. This week on The Consumer Show, Eddie visits the Holy Communion Class at St Louise's Primary School in Ballyfermot to teach the country's next generation about cash, credit, and consumerism.
Eddie's Godlen Rules
Save First Spend After: Over the course of a working life those who pay themselves first by saving and investing become financially comfortable. Those who prioritise spending first, hoping to save whatever is left over, invariably grow little of their money. From the get go the target should be to salt away 10% to 15% of earnings basing lifestyle on the remainder.
Total Debt should not exceed 1/3 of income: This means the total of your mortgage and personal debt should not exceed 1/3 of your net income. At the peak of the bubble this was impossible but once debt repayments hit 40% to 50% of income a borrowing spiral is difficult to avoid. If you're above the 1/3rd ratio then getting below it is the target
Personal Debt: Unsecured personal debt like overdrafts, credit cards etc should not exceed a quarter of net annual income and a quarter of liquid assets. Above this level servicing the debt becomes problematic. The ideal ratio is zero unsecured debt.
Debt Strategy: Clear the unsecured debt from the highest interest rate owed first, as opposed to clearing the biggest balance owed first.
Cash Reserve: If your savings in a deposit/current account amount to more than the total cost of 6 months lifestyle costs (more if you are retired/unemployed) then you should consider investing the excess money as it is not earning you as much as it should be.
Savings Return: If you have money in a deposit account, deduct DIRT and inflation to determine the real rate of return to you. Eg if you are offered a rate of up to 4% currently your return is probably negative. Once tax and inflation are taken from your savings, there is a significant difference in the rate offered and the real rate:
Currently Dirt is 27% and annual inflation, according to the CSO, is 3.2%
The Risks Of Renting
The Consumer Show looks at the rights of tenants in rented homes and what protection is in place for renters. The charity organisation Threshold and the dispute resolution service offered by the PRTB, are among the very limited resources to help this large sector of Irish consumers.
The Consumer Show visits the West of Ireland this week to talk to tenants who have been left out of pocket by the same landlord, Gabriel Clarke from Renmore Galway. We speak to two former tenants of Mr. Clarke's - who both had their deposits retained by him after they quit his rental property in Galway. Up to the time of broadcast they had yet to receive their deposits despite separate rulings against Mr Clarke by The Private Residential Tenancies Board - (PRTB) - the watchdog for tenants.
In studio, we speak with the Irish Property Owners Association's Information Officer, Margaret McCormick, about the problem of deposit retention and what they are advising their members.
The PRTB issued The Consumer Show with the following Statement:
"The PRTB has replaced the Courts in dealing with the vast majority of disputes between landlords and tenants in the private rented sector. We offer Adjudication / Mediation services, with a possible appeal to Tribunal. We have over 241,000 tenancies registered with us, of which only 1 - 2% are involved in a Dispute each year. Processing times for Disputes are now 7.5 months on average (down from 18 months two years ago). There are a number of further initiatives to be rolled out this year aimed at reducing that further, including the development of a new ICT system and amendments to the legislation.
The decision is contained in a "Determination Order" or D.O. It should be noted that most clients comply with the Order promptly. However, the Residential Tenancies Act 2004 provides that the Board may take a criminal prosecution or civil proceedings against parties for non-compliance with its Orders. To date the PRTB has succeeded in obtaining 46 Civil Proceedings and 65 Criminal Prosecutions for non-compliance with our Orders. In addition, approximately 200 cases have been "settled" as a result of legal proceedings commencing. The PRTB engages private sector legal firms to undertake our DO enforcement work. Matheson, Ormsby Prentice held this contract for the past number of years which has just been awarded to Eversheds O'Donnell Sweeney, following a public tender.
As stated on our website and in letters to clients, it is also open to a landlord / tenant seeking compliance with a Determination Order to initiate civil court proceedings themselves. In these cases PRTB assist by providing necessary documentation relating to the case.
The PRTB is mindful of the current difficult economic climate facing both our landlord / tenant clients. Therefore we actively encourage non-compliant parties to come to some meaningful arrangement regarding settlement of their debt (i.e. in phased payments), before pursuing people who are in financial difficulty, through the Courts. Quite apart from the very serious implications a conviction has for a landlord or tenant (eg employment, travel, financial), such prosecutions are expensive, and time consuming for both the PRTB and for the Courts."
Tesco Online Shopping Guide Prices
Tesco issued The Consumer Show with the following statement regarding the Use of Guide Prices on their online shopping website:
"It is clearly displayed on the tesco.ie website that the total price of your online shopping is a 'Guide Price' upon checkout. A Guide Price takes into account variables such as stock availability and changes in pricing which can affect the actual end total of your shop. We display the following details on tesco.ie to inform all of our online customers about what is meant by the term 'Guide Price' and explain why we provide a 'Guide Price':
About Guide Price
Please note that the prices on our Grocery website are guide prices only.
The actual price you pay is the price charged in store when your order is put together for delivery. This is because:
All prices are expressed inclusive of any VAT payable unless otherwise stated.
When your order is delivered you may return any item and receive a full refund if you consider that the difference between the price charged and the guide price shown on the Grocery website is unacceptable."
The Consumer Show Trolley
Since January The Consumer Show has been tracking the prices of 50 products ranging from fruit and veg, to bread, milk, cereals, soft drinks even detergents. It's a selection of mostly branded with a few non branded goods and we priced them in Tesco, Dunnes, Superquinn, Supervalu.
Looking at the price of our Consumer Show trolley of goods two weeks ago Superquinn was the most expensive.Dunnes was 2nd most expensive, while Supervalu came in third, with Tesco being the cheapest for our 50 products.
Let's compare those prices to the same trolley last week: Superquinn remains the most expensive, in fact the cost of the trolley is up by just over five euro to ¤178.74. Dunnes stays in second position and keeping its prices absolutely steady at ¤163.19.
The cost of the trolley in Supervalu is down by just over a euro to ¤160.25, but it is not enough to be the cheapest trolley for the week. Therefore, Tesco has the cheapest trolley, even though it has gone up in price by one euro to ¤159.78.