How to be financially responsible is a bit like discussing how to lose weight, everyone knows the basics of what you need to do but following through with actions is another matter. What are financial hacks that bring the average Irish resident to FI over the course of time?
I have been reading up on Mr. Money Moustache and listening to podcasts like Choose FI and Afford Anything and sometimes it’s a bit discouraging to hear about all the US hacks that don’t apply here. I used to read about incredible savings rates like 50%, 60% and think how impossible it would be for the average income earner, however at this point in my life I am seeing some of the positive snowball effects of following a financial plan even on low/average salaries.
We do have some advantages in Ireland. If you have a private sector defined contribution plan you might be able to access at age 50. Education and medical bills won’t bankrupt you like in the US. Travel to other countries ( pre and post COVID) doesn’t have to be a once in a lifetime event. Most people would get more than the 2 weeks annual leave like in the US and there are paid or protected leaves like maternity, illness, parental etc. Low property taxes.
Of course, this list is for people who don’t have debt ….what are some ideas on how to get to financial independence and plan for any financial pitfalls?
-buy less house than the bank says you can borrow and pay it back faster than agreed if you can.
-have mortgage protection and life insurance if you have dependents.
-live below your means ( but not in deprivation) instead of within your means. Within your means is just breaking even.
-work towards maxing out AVCs
-buy cars you can afford in cash. If you have 40k, great buy a new car. If you can save 5-10k, buy a reliable used car. ( actually except for a house, most things should be bought when you have the cash, when you can actually afford it)
-automate all your savings/pension contributions and then work out a budget based on the remaining funds. So if you spend down to zero each month, you don’t have to feel too guilty as you still have money for emergencies and long term goals.
-is travel hacking like in the US possible from an Irish perspective? I don’t think so…
Instead of poking holes ( unless its constructive!), what are some other ideas to get to FI?
I have been reading up on Mr. Money Moustache and listening to podcasts like Choose FI and Afford Anything and sometimes it’s a bit discouraging to hear about all the US hacks that don’t apply here. I used to read about incredible savings rates like 50%, 60% and think how impossible it would be for the average income earner, however at this point in my life I am seeing some of the positive snowball effects of following a financial plan even on low/average salaries.
We do have some advantages in Ireland. If you have a private sector defined contribution plan you might be able to access at age 50. Education and medical bills won’t bankrupt you like in the US. Travel to other countries ( pre and post COVID) doesn’t have to be a once in a lifetime event. Most people would get more than the 2 weeks annual leave like in the US and there are paid or protected leaves like maternity, illness, parental etc. Low property taxes.
Of course, this list is for people who don’t have debt ….what are some ideas on how to get to financial independence and plan for any financial pitfalls?
-buy less house than the bank says you can borrow and pay it back faster than agreed if you can.
-have mortgage protection and life insurance if you have dependents.
-live below your means ( but not in deprivation) instead of within your means. Within your means is just breaking even.
-work towards maxing out AVCs
-buy cars you can afford in cash. If you have 40k, great buy a new car. If you can save 5-10k, buy a reliable used car. ( actually except for a house, most things should be bought when you have the cash, when you can actually afford it)
-automate all your savings/pension contributions and then work out a budget based on the remaining funds. So if you spend down to zero each month, you don’t have to feel too guilty as you still have money for emergencies and long term goals.
-is travel hacking like in the US possible from an Irish perspective? I don’t think so…
Instead of poking holes ( unless its constructive!), what are some other ideas to get to FI?