How To Spend

Reading media reports about Johnny Depp’s financial woes (he has allegedly come close to bankruptcy despite earning $650 million over the last decade or so thanks to a serious spending habit) it brings to mind a question we all ask, what’s the right way to spend money? Or to put it another way, What Would Johnny (Not) Do?

Have a budget

First up, be aware of your net monthly income and set monthly expenditure accordingly – which ideally means setting aside funds to invest for a rainy day (see How To Save). Johnny’s $2 million a month ‘allowance’ was clearly over budget (even for him).

Pay attention

Continually check your accounts to ensure you are keeping track of all outgoings. Set a spending limit and stick to it. Don’t expect someone else to tell you you’re spending too much (yes, I’m looking at you Johnny).

Be flexible

If your income varies then you must be ready to adjust spending habits. For most of us the income side of the equation is out of our control – at least Johnny can always do another Pirates of the Caribbean movie (‘Pirates 5’ out this Friday!).

Spend wisely (part 1)

Essential expenses are those necessary for basic living. Be conscious, perhaps ruthless, about what you consider ‘essential’. For example, for most of us one car is a necessity, but do we really need two cars, or forty-five (you know who)? Our home is undoubtedly a necessity, a second, or fourteenth (him again) is definitely non-essential.

Spend wisely (part 2)

Discretionary spending is everything non-essential – without doubt the area we can all ‘improve on’. For example, I would categorise a guitar, or seventy (uh-huh) as not essential. Did Johnny really need to spend $3 million blasting journalist Hunter S. Thompson’s ashes out of a cannon? I would say not.

Spend wisely (part 3)

And when it comes to discretionary spending, all the evidence suggests we get more happiness out of experiences rather than stuff (both before and after the purchase). So maybe don’t bother with the Hollywood memorabilia (for which Johnny needs 12 storage facilities) and instead enjoy a nice holiday.


Need help avoiding the temptation of splurging $30k a month on wine (like Johnny)?  You could call Money Smart on 01 276 0006 or email but maybe seek other help first!


All figures above are alleged in a lawsuit by Johnny Depp’s former business advisors.

5 Easy Resolutions For The New Year

FireworksJanuary is a great time to set some good financial goals. However, to ensure you have every chance of sticking to these resolutions you should set small realistic goals. Here are 5 we recommend…

A is for Advice

First up, decide if you want to get independent financial advice or whether you want to go the DIY route. If you are going it alone, read on…

B is for Budget

Budgeting is the most important thing you can do to start you on the road to financial success. Many people make quite a lot of money but never have much to show for it because they do not manage their money well. The key is to know where all your money is going and then consciously plan where all your money should be going.

C is for Contributions

Once you’ve established a monthly or annual spending budget, the next step is to set up a savings plan that mops up any excess income. The best way to save is to automate the process, in other words, set up a direct debit to a deposit or investment or pension account.

D is for Debt

With the exception of low cost tracker mortgages, you should put in place plans to repay all debt, starting with the most expensive (usually credit card debt). As with savings, automate these debt payments to ensure you stick with the plan – you may have to make sacrifices along the way but it will be well worth the effort.

E is for Educate

As personal finance is not really taught in schools, we all have a responsibility to get to grips with the often boring and/or complicated world of money. Knowledge is power, but it could also be argued that knowledge is wealth because avoiding bad money decisions undoubtedly makes us richer.

Good luck and Happy New Year!

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How To Save

20-euroSaving money rather than spending it gives us no instant gratification but it is the road to eventual financial freedom. Here are some tips on how to get there.

Have a budget.

Make a note of exactly where your monthly income goes. Aim to have both a spending and saving budget and try to stick to it throughout the year. Motivate yourself by constantly reminding yourself what you are saving for – be it a house deposit, an education fund or a retirement fund.

Spend less.

If you want to spend less, the very first step is to pay attention to what you’re spending money on. Then think seriously about the necessity of everything you buy. Try to avoid impulse purchases by giving yourself the time to think carefully about whether you really need and can afford the item.

Avoid debt.

As a rule of thumb, all loans except your home mortgage are bad. So try not to take on any new debt and pay off your credit card in full every month. Keep a rainy day fund so that emergency expenses don’t end up on your credit card. And if you are in a position to pay off debt, focus first on the most expensive debt.

Isolate your deposit account.

The best way to save is to automate the process by setting up a direct debit to a deposit account. This creates a savings habit and will make you much less likely to reduce or stop monthly contributions. And mentally putting this account out of easy reach will help you avoid the temptation of raiding it in the short term.

Invest in your future self.

Financial planning is essentially about how we should allocate our money over our whole lives. For most of us, this means we must put some money away (in investments and pensions) for a time when we have no employment income. To put it simply, buying a Ford Fiesta now rather than a Ford Focus (and investing the difference) could mean your 70 year old self can drive a Lexus (rather than a Yaris!)

Need independent savings and investment advice? Just call Money Smart on 01 276 0006 or email

Budget 2017 : 5 Key Takeaways

BudgetBudget 2017 has gifted us a range of ‘small sweeties’ but sees no major changes to how the government runs its finances (or controls ours). Here are 5 key changes – and what you should do about them.

1. Keep contributing to a pension

The State Pension may have been increased by €5 a week (whoopie doo!) but let’s not plan that Mediterranean cruise just yet. Much more importantly, continued pension contribution tax relief remains. It’s one of the last few meaningful tax reliefs so now is not the time to stop thinking about saving for retirement.

2. Pay off debt / Save more

A reduction in USC (and a few other very minor tweaks to tax credits) will result in us all seeing a little bit more money in our pocket. This may provide an opportunity firstly, to begin to pay off expensive debt, and secondly to save more. The DIRT (tax on savings) reduction from 41% to 39% is pretty irrelevant with deposit rates so low so once you have an appropriate emergency cash reserve you really do need to consider a higher earning medium to long term investment strategy.

3. Buy your first home

The controversial Help to Buy Scheme offers first time buyers a tax refund of 5% of the value of  a new home worth up to €600,000 but with a maximum rebate (from income tax already paid) of €20,000. Money Smart is a strong believer that you should own your own home (see our blog on this here) so this new incentive will hopefully help.

4. Maximise the value of your home

The Home Renovation Incentive Scheme has been extended for two more years. This popular tax credit effectively gives you full relief against the 13.5% VAT rate on home repairs or improvements.  On top of that, the very practical Rent a Room (Tax) Relief rises to €14,000 per annum, although Airbnb is excluded.

5. Think about your next of kin

While the rise in the parent to child inheritance tax threshold to €310k is welcome, the continued inclusion of the family home in the taxable estate and the unchanged 33% inheritance tax rate ensures that the many of us will also be passing on a very large tax bill to our children. Thus the need for financial planning advice on how to minimise this liability remains as important as ever.

Talk to Money Smart about a post budget personal finance audit by calling 01 276 0006 or emailing