Personal finance advisor Eoin McGee is a newly appointed ambassador for Champion Green, Ireland's 'Support Local' campaign. Here, he explains why our individual purchasing decisions matter now, more than ever.
During one of our lockdowns, I asked my Instagram followers some questions in a poll, and the answers I got were really encouraging. The first question was ‘are you more conscious of buying Irish than you were pre-Covid?’, and 86 per cent of the 12,727 people who replied said yes.
If you cast your mind back to that time, we were ‘all in this together’. Each night the TV news was all inward looking. It reflected the struggles of our hospital staff, daily reminders of our Covid numbers and, sadly, the people who died.
It was a time most of us felt very Irish. And, it was also a stark reminder that we were an island, disconnected from our loved ones abroad who couldn’t, even in the most life-changing circumstances, make it home.
Eighty-six per cent of people from my Instagram poll reflected the mood of the nation which was that, if we want to get out of this, we need to work together.
Many of us hold the view that it is up to Government to support businesses that had to close in lockdown, as well as after lockdown, in the interest of the general public, jobs and services, and the nation’s economic health.
But, we must not forget that there are two million people in Ireland who are better off financially as a result of Covid. These people’s wages stayed the same, and their expenses fell through the floor.
They no longer had to pay for a commute, often for childminding too, or for meals in restaurants or trips abroad. In fact, when they did want to spend, they had to do so in a very conscious way, planning trips to shops, queuing outside and, when inside, getting out as soon as possible to avoid contacts.
In a typical month, pre-Covid, Irish households saved €443 million euro. In the first full month of lockdown, April 2020, the people of Ireland saved €3 billion. This was due to less spending and reduced costs. So, two million people are better off as a result of the lockdown measures.
And, as I said, Government, using our taxes, are responsible for supporting businesses forced to close in the interest of public health, and those who lost income and jobs. But, I also believe the two million people with extra savings have a responsibility to support local businesses and jobs too, just as they did during lockdown.
The need for prosperous local towns, with shops and services, didn’t stop when we opened back up again. That need and responsibility continues.
The fastest way for the economy to recover is if we, the people of Ireland, spend money in the businesses of Ireland. Every time we spend money with overseas companies, we have leakage. If it is online, and the company has no staff here in Ireland, then you can assume that almost all of the money you spent has left the country.
If it is an international company, with premises or shops and staff here in Ireland, suggestions are that around 20 cent in every euro goes into the Irish economy. 80% of our spend is repatriated back to the company’s country of origin.
One to watch for, when shopping locally online, is that the .IE domain that you are on is actually an Irish owned and operated website. Otherwise, you’re not only shopping with an overseas business, but you also risk unwelcome customs and import duty on your purchase!
So, why not get a better bang for our buck by encouraging these two million better-off people, plus others who are getting back on their feet post-Covid, to spend in locally-owned shops, bars, restaurants and service providers.
And, guess what, spending locally does produce a healthy bang, return-wise. When you spend a euro in an Irish business it has a multiplier effect.
The multiplier effect means €1 spent in a local business gets recycled back to suppliers and staff wages. They then continue to spend here, in the Irish economy, and to pay their taxes, and so on. In fact, if we spend €1 in a locally-owned business, we can expect to add between €2.50 and €4 to the Irish economy and public services.
My fear is that, as we become more globalised again, we forget our roots. My hope is that, if even the 10,971 people who said in my poll they would support Irish, do just that now, and continue to think local, then that is a win in itself.
Most people think because I am a financial planner, I am all about keeping money in our pockets, and never spending.
Within reason, we should spend our money, and spend it on ourselves. And this means in our own businesses, in local businesses for the benefit of both ourselves and the economy, Because, essentially, why export Ireland’s hard-earned wealth?
Support local campaign, ChampionGreen.ie has plenty of good advice on great local brands and businesses and on how to save with local.
Irish businesses have been through a really rough time and, as they emerge from the pandemic downturn, they have been hit with the roaring price rises of current inflation.
So, yes, we need to spend our money, but we need to spend it wisely and sustainably, for the benefit of our community. Because; guess what?
Nobody else is going to, and we are all in this together; right?
ChampionGreen.ie has plenty of good advice on great local brands and businesses and on how to support them.
