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Creating-a-financial-plan

Creating a financial plan

Balancing work, childcare and all the expenses connected with the birth of a new baby, means now, more than ever you’ll probably need to take a closer look at your finances.

So, if you’re considering a career break, cutting down on your working hours, paying for childcare or investing in your baby‘s future it’s time to start planning. Start by working out your financial position.

First get a clear idea of how much money comes in each month and how much goes out. To do this, list all your fixed and variable outgoings.

Outgoings

Fixed costs include mortgage, utilities, insurance (including private, medical and car), taxes, PRSI contributions and loan payments (hire purchase, credit cards). Add these together to find your total fixed outgoings.

Variable costs include food and other household expenses, car (tax, servicing, petrol), travel expenses, telephone, internet, clothing, gym and sports costs, holidays and childcare, plus anything else you can think of. Add these together for your total variable expenses.

Now add together your liabilities or the money you owe, from credit card bills, HP balance, the balance of your mortgage and bank overdraft.

Income

Next, make a note of your income from salary to savings, bonuses and investments. Include all interest and dividends.

Add up any savings and investments, including pension contributions, personal savings accounts and other savings plans to find your complete savings contributions.

Your assets will include cash, money in building society accounts, bank accounts, life assurance plans, endowments, bonds, personal equity plans, unit and investment trusts, stocks and shares and others.

How to save

One way to make sure you don’t miss anything out is to carry a notebook around with you. Write down absolutely everything that you spend each day for a full month, including coffees out, restaurant tips, paying the window cleaner, etc. You might be surprised how small sums build up.

If you have more income than outgoings, start to think about what to do with your spare cash. Remember, though, that unexpected expenses, such as having to replace an appliance or emergency repairs to your home or car, may crop up.

About the Author

eumom team 

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