As public sector workers are losing more jobs day by day, the public sector is outraged that they have to bear the whole burden of the financial crisis in Ireland. Hearing that makes the private workers outraged and soon it will be impossible to discuss the issue at all. Everyone seem to think about themselves and whether or not they have been given the worst deal.
It was brave of the government to go down this route and as they previously haven`t been able to come together on anything, that they have on this tough decision proves the seriousness of the financial crisis. Ireland's economy is bleeding and tough decisions will have to be made.
February 5, 2009
February 3, 2009
What is next?
D-day is coming to an end. The partnership fell through and the government had to produce their action plan. With no backing from the social partners, they now stand alone. How will this go down with the public sector worker? Can they be persuaded that this is the right course of action? A strike action now would be dethronement to the government.
Is 3-9% pay cut too much of a burden for workers that have guaranteed jobs? I`d say that most people in the private sector wouldn`t say so. If you are a private sector worker on 20-25K a year it is very hard to find compassion for someone who looses a few thousands on a 45K salary. Of course, there are workers on lower income too but some of the figures mentioned were in the region of 35-45K. That is a decent enough wage.
The government didn`t come out with passion today fighting for this, that was left to the opposition. On a day like this they all needed to stand behind Mr Cowen and show leadership. The coming week will be crucial.
Is 3-9% pay cut too much of a burden for workers that have guaranteed jobs? I`d say that most people in the private sector wouldn`t say so. If you are a private sector worker on 20-25K a year it is very hard to find compassion for someone who looses a few thousands on a 45K salary. Of course, there are workers on lower income too but some of the figures mentioned were in the region of 35-45K. That is a decent enough wage.
The government didn`t come out with passion today fighting for this, that was left to the opposition. On a day like this they all needed to stand behind Mr Cowen and show leadership. The coming week will be crucial.
D-day and the talks fell through
Today was the day that they would all unite and come out with the big plan to rescue the Irish economy which is in free fall. Instead, the talks collapsed over disagreements. Particularly regarding pensions. Did they really surprise us? Did we honestly believe that partners with very different agendas would be able to put their own group aside for the better of the country? I don`t think so.
So where are we now? If we are lucky, perhaps better of. How can that be you might ask...Well, perhaps this is the time for the government to actually govern. For them to lead buy example and show us where they want Ireland to go. What this country now need is a path to recovery, it might take a long time but a path of sorts is at least a start. They need to take the tough decisions and show decisiveness and action. Perhaps they feel that they can now.
So where are we now? If we are lucky, perhaps better of. How can that be you might ask...Well, perhaps this is the time for the government to actually govern. For them to lead buy example and show us where they want Ireland to go. What this country now need is a path to recovery, it might take a long time but a path of sorts is at least a start. They need to take the tough decisions and show decisiveness and action. Perhaps they feel that they can now.
February 2, 2009
Stabilize current finances before investing
In these times of financial instability it is important that you take a look at your income and expenditures. Preferably make a budget so that you know your incomings and outgoings. If you are to invest, do it wisely and for the length of time that you can afford. The stock market for example isn`t a market for short term investment unless you can afford to lose the invested money. Alas, it is vital to stabilize the current finances before lengthy investments as I have explained in the following article of mine;
Stabilize current finances before investing
More often than not, an investment is a long-term commitment. The whole idea of investing is that you save money for the future so that you spread your income over time. If you have a windfall, if you earning potential increased for a period or if your spending decreased, then you might want to spread this extra money over a length of time rather than go on a shopping spree. As you invest you expect to get paid for that investment as you need the value to increase, not least because of inflation. The day you realize the investment you want to have the same buying power as you would have the day you made the investment, and preferably more.
The banks, the governments and the financial institutions all recognize this and pay you an interest rate as compensation. As they want you to commit to a long-term investment they pay you more the longer the term you commit to. When the investment involves risk you are advised that this is a long-term investment and that during periods the market might be in a downward spiral and you won`t afford to cash out the investment at that time. Due to the nature of the investment and the risk that comes with most high paying investment options you should only invest when you have enough money to cover you current expenditures plus as smaller current saving if you unexpectedly need a lump sum. In order to know if your finances are healthy enough to make a long-term investment you need to set up a budget.
You need to be aware of you income and expenses. When you know that you earn more than you spend and that you are positive that status quo will continue, then you can start looking at investment options. However, if you pay your current expenditure through credit cards you should think twice about starting a long-term saving. The interest rates that you have to pay on a credit card way out-ways the rates that you will come to earn for you investment. In a case when you don`t have a very volatile and risky investment. So, in order to invest, your short-term debt should be paid off. A long-term investment should be done with money that you can do without for the next 5 to 10 years. If you believe you are going to need the money to pay off some debt within 5 years, then you better just start saving in a current savings account. That way you can access the funds when needed and you avoid all the fees that the financial institutions are going to charge you if you need to terminate an investment before maturity. If you don`t have enough money to pay your day to day expenses, then you don`t have money to cover a long-term saving.
Stabilize current finances before investing
More often than not, an investment is a long-term commitment. The whole idea of investing is that you save money for the future so that you spread your income over time. If you have a windfall, if you earning potential increased for a period or if your spending decreased, then you might want to spread this extra money over a length of time rather than go on a shopping spree. As you invest you expect to get paid for that investment as you need the value to increase, not least because of inflation. The day you realize the investment you want to have the same buying power as you would have the day you made the investment, and preferably more.
The banks, the governments and the financial institutions all recognize this and pay you an interest rate as compensation. As they want you to commit to a long-term investment they pay you more the longer the term you commit to. When the investment involves risk you are advised that this is a long-term investment and that during periods the market might be in a downward spiral and you won`t afford to cash out the investment at that time. Due to the nature of the investment and the risk that comes with most high paying investment options you should only invest when you have enough money to cover you current expenditures plus as smaller current saving if you unexpectedly need a lump sum. In order to know if your finances are healthy enough to make a long-term investment you need to set up a budget.
You need to be aware of you income and expenses. When you know that you earn more than you spend and that you are positive that status quo will continue, then you can start looking at investment options. However, if you pay your current expenditure through credit cards you should think twice about starting a long-term saving. The interest rates that you have to pay on a credit card way out-ways the rates that you will come to earn for you investment. In a case when you don`t have a very volatile and risky investment. So, in order to invest, your short-term debt should be paid off. A long-term investment should be done with money that you can do without for the next 5 to 10 years. If you believe you are going to need the money to pay off some debt within 5 years, then you better just start saving in a current savings account. That way you can access the funds when needed and you avoid all the fees that the financial institutions are going to charge you if you need to terminate an investment before maturity. If you don`t have enough money to pay your day to day expenses, then you don`t have money to cover a long-term saving.
Public sector versus private sector
After having listen to the news the last few days I feel that I have to voice an opinion and where better than here on my blog? The private sector is bleeding with massive job losses, pay decreases or in better cases pay freezes. On the other hand the public sector has secure jobs and great pensions. I work in the private sector and my household have felt the worsening times. Is it then unrealistic that we feel that it is time that the public workforce share the burden? If you listen to some of the trade union official, it seems so. I can`t understand where they are living? Tomorrow is D-day. The day that we will know who won the talks. Somehow I doubt that it will be the government, and that will be a sad day for many of us.
February 1, 2009
Credit card debt
Before the recession and the whole credit crunch I wrote an article on Helium about credit card debt, the pitfalls of it spiralling out of control and how to eliminate the debt. I believe this to be equally important a topic today as it was then and have decided to share parts of that article with you on my blog.
How to eliminate credit card debt.
In today’s world where banks and financial institutions think more about their own income than the welfare of its customers, it’s important to be skeptical when they give you credits and loans without you ever requesting them. Even more important is to question the credit cards that you get even if you already have a few. Did they ask you about your financial situation or did they just process you request in a few seconds? If you have been given a number of credit cards without them checking your financial status you more than likely have a risk of running up a debt too high to cope with.
So, what do you need to do? First and foremost, it’s important not to acquire any more credit cards. It’s often a spiral where another card can solve the problem you are currently facing. Especially if you can transfer old debt onto the new card interest free for a few months. However, this is a very short-sighted solution as you soon will have to pay back on this card too and then feel the need to ask for yet another one. Additionally, the credit card company might have lured you in with an interest free option for a while but might later charge a higher rate for the old debt. How do I get out of this bad habit you might ask?
One way is to consolidate all cards into one and have only one sum to pay back. Alternatively, to take out a personal loan to clear all credit card debt and only have a standard loan to re-pay. If that would be impossible, the second alternative is to use some of the credit cards to pay off a few others. It’s a long journey but with planning and less spending you will sooner or later end up with one or two cards. If you decide then not to use them anymore, but just have them to repay current debt then you have gotten yourself out of the dangerous situation you were in.
What if you are so up the walls with debt that you can’t see the problem and not understand where to start? Then you need help from an outsider and there is great help to get. There are financial advisors not connected to any of the lending institutions who can give you independent advice and get you started on your journey to being debt free.
How to eliminate credit card debt.
In today’s world where banks and financial institutions think more about their own income than the welfare of its customers, it’s important to be skeptical when they give you credits and loans without you ever requesting them. Even more important is to question the credit cards that you get even if you already have a few. Did they ask you about your financial situation or did they just process you request in a few seconds? If you have been given a number of credit cards without them checking your financial status you more than likely have a risk of running up a debt too high to cope with.
So, what do you need to do? First and foremost, it’s important not to acquire any more credit cards. It’s often a spiral where another card can solve the problem you are currently facing. Especially if you can transfer old debt onto the new card interest free for a few months. However, this is a very short-sighted solution as you soon will have to pay back on this card too and then feel the need to ask for yet another one. Additionally, the credit card company might have lured you in with an interest free option for a while but might later charge a higher rate for the old debt. How do I get out of this bad habit you might ask?
One way is to consolidate all cards into one and have only one sum to pay back. Alternatively, to take out a personal loan to clear all credit card debt and only have a standard loan to re-pay. If that would be impossible, the second alternative is to use some of the credit cards to pay off a few others. It’s a long journey but with planning and less spending you will sooner or later end up with one or two cards. If you decide then not to use them anymore, but just have them to repay current debt then you have gotten yourself out of the dangerous situation you were in.
What if you are so up the walls with debt that you can’t see the problem and not understand where to start? Then you need help from an outsider and there is great help to get. There are financial advisors not connected to any of the lending institutions who can give you independent advice and get you started on your journey to being debt free.
January 31, 2009
Credit crunch - what does that mean to me?
A few months ago no one had heard of credit crunch, credit squeeze and had forgotten all about harder times. Now you can`t step outside the comfort of your bed before you hear these words. How did we end up here and how will this affect me? Well, I suppose common greed led us down this path like so many times before. The inflation spiraling, borrowing on the rise and so on and so fort. If you are lucky enough to keep a job I suppose the first personal encounter with the credit squeeze will be when they say no to a loan or a mortgage. Things we weren`t used to. What if I can`t buy a home for years? If you aren`t so lucky I suppose losing your job will make you see the harsh reality pretty quickly. So, how to stay alert? I say, stay informed by staying tuned in here...
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