January 2026 is a good time to formally address your finances, but you may not know where to start. John Lowe of MoneyDoctors.ie shares his expert advice.
When it comes to our finances, we tend to stick our heads in the sand until the problem becomes so obvious that it is nearly too late to apply a solution.
With the last pandemic, restrictions, wars, inflation, interest rate rises and cost of living crises, it is imperative that we do not ignore the telltale signs of any personal financial ill-health.
There are 10 essential questions you should ask yourself - or if you have family or loved ones, they should ask themselves - to kick-start your financial well-being for 2026:
1. Is my expenditure greater than my income? Am I spending more than I am earning?
2. What am I doing to balance my books? Can I earn more income or spend less? Or do a little of both? A budget plan is essential.
3. Am I claiming all the reliefs and allowances legitimately available on my income and are there promotional or overtime opportunities in the job that might increase my income? A second job?
4. Can I negotiate lower fixed interest rates on my home loan? Consolidate or negotiate a complete moratorium if possible on my loans (capital and interest) or at least just pay interest only? Both are currently extremely difficult to negotiate.
5. Am I adopting the sniper approach to debt – paying off the most expensive first?
6. Have I looked at all expenditure – every sector of spending, economising where I can and doing without when I must?
7. Do I have a Rainy Day Fund (RDF – which should be ideally 3 to 6 months annual income with a minimum of €5,000) for
- Emergencies (expenditure not budgeted for e.g. washing machine breakdown)
- Sudden loss of income (bonus dries up or you are put on a 3-day week)
- Investment opportunity (saving for that home deposit)
Am I availing of the best investment strategy on any lump sum saved after ensuring my deposit-taker is safe and secure with my funds? Have I a Regular Saver scheme set up, or even a regular stock market saver scheme for that 10 year old child’s third level costs?
8. Do I have a pension in place? Have I provided anything for retirement? Will I be comfortable living off the State Pension at age 66 (if it is still there)? Do I need to supplement an existing pension, as it may not then be enough to pay for the lifestyle I have become accustomed to, such as additional Voluntary Contributions (AVCs)? Have I read up on auto-enrolment?
9. Have I provided for my dependents – education, life cover (in case I die), health cover (for them if applicable, and myself should I be incapacitated, plus hospital and redundancy cover) and inheritance (leaving my hard earned wealth to my loved ones in the most tax efficient manner possible, starting with drafting my own Will and empowering my representatives to apply for the Grant of Probate themselves and save the estate hundreds in legal fees).
10. Have I planned the next year, 3 years, 5 years and 10 years? Have I even completed a simple annual household Budget?
If you are like most other people, you will have turned a blind eye to most of the above questions. Family, careers and your own interests take priority when it comes to dealing with your financial issues. It is also a little like work: boring, tedious and not really enjoyable but as inevitable as the sun coming up, so it has to be done. It takes a little time - ideally two hours every month - to be put aside each month to sort it out.
Therefore, we must address our financial issues. Planning is crucial and for those who cannot afford a financial consultant, they must do it themselves and consult with their family or friends.
Addressing these questions is a little like eating an elephant – one small piece at a time. Your very first activity should be to extrapolate all the relevant financial information so that you can see the big picture. You will soon know if you are solvent and what you now need to do to steady the ship.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ.
For more information, click on John Lowe's profile above or on his website.
