Financial structures are not what they used to be and our thinking around money is most definitely not what it used to be. Today it is becoming more important than ever for each of us to assume personal responsibility for our own financial affairs.

Mortgage providers typically provide you with two annual statements. The first and most important is your annual loan statement. It is vital that you review this to ensure that all is in order e.g. do all of your repayments appear on your annual statement? Is the interest rate what you expected? Are there any transactions you do not understand or recognise? At a minimum, I suggest you read, review and retain this document. 

In addition to the annual statement, most lenders also send a letter summarising the total annual interest repaid. If you are a landlord, then this is a key document to retain for your records as you can claim 75% of your mortgage interest as a tax deductible expense.

Though these annual statements are important, I recommend that you monitor your mortgage account on a more frequent basis. Below are some mortgage related topics that may be of interest to you.

Mistakes Happen

Every mortgage manifests into computer code and is therefore subject to 'computer error'. Likewise every mortgage can be ‘touched’ in cyberspace by the mortgage providers' employees and therefore is subject to human error. If there is one point that I would like you to take away from this post, it is that banks can and do make mistakes; you can read the most recent example here and remember that the Irish Regulator has fined Irish banks in the past for overcharging. To protect yourself, it is vital that you query anything that does not sit right with you. Ensure your interest rate is what you expected it to be and check that your monthly repayment is what you expected it to be (if you are on a fixed rate then the amount should remain the same). Trust your intuition and take action.

To Fix or Not to Fix

This is something that many of us ‘wrestle’ with throughout the lifetime of a mortgage. The bottom line is that this is a personal choice and will reflect your attitude to risk. If this is a decision you are currently faced with, I suggest that you call your mortgage provider (or broker) today and get the information you need. Take your time on the phone and ensure that you are clear on everything before you hang up. Ask them to outline in euros what the monthly repayment would be for every interest rate option available to you. Personally I find it easier to deal in euros than in APRs and interest rates. You may even decide that having reviewed all of the options available to you that you do not want to make any changes. Take a look at this recent article written by Caroline Madden of the Irish Times; it may be of interest to you if you are considering fixing your mortgage or if you are currently on a tracker mortgage.

Mortgage Flexibility 

Just because you signed up to a 20, 25 or 30 year mortgage does not mean that this is set in stone. Ever wondered how much time you could shave off your mortgage term if you decided to pay an extra €100 per month or make a once off payment of €10,000? This website allows you to explore numerous ‘what if’ scenarios to illustrate what could happen to your mortgage: http://www.drcalculator.com/mortgage/ie/  (I am a big fan).

When it comes to dealing with banks, mortgage providers and insurance companies, it often helps to remember that the people who work in these institutions are people just like you and me. The only difference between your language and theirs is industry jargon, so remind those helping you that you would like a conversation in plain English with no jargon. The most important thing is that you get the information that you need because after all it's your money....

As I listened to Margaret Gray, Christeen Skinner, and Betty Cosgrave last weekend at Oscailt, I was reminded of the importance of choices. Whilst you may have no 'control' over certain events or circumstances, you always have a choice in how you think and how you behave. Recognising and acknowledging this can be really empowering.

Increasing your income and reducing your expenses result in the same outcome, more money. In my last post I explored ways of enhancing your income and today I want to look at how you can spend smarter.

One of the main benefits of completing your ‘Money Diary’ is that you now have a better sense of your spending. With this information to hand, today is a really good time to explore where improvements can be made. Lets look at some practical ways of achieving some savings:

1) You can tell a lot about yourself by reviewing your spending. Were you surprised at the amount you spent in any particular expense category? E.g. taxis, alcohol, cigarettes, clothes, travel etc.? I say this with no judgement but if after reviewing your expenditure you decide that you need to make changes, then please take the necessary action. Changing your spending patterns e.g. choosing to take less taxis or drink less, often leads to positive knock on effects in your health and wellbeing.

2) A lot of companies now use Twitter to sell discounted tickets. Bus Eireann has sold a lot of tickets in this manner in the past 6 months and hotel rooms, airline seats, etc.. are often sold in this way. To hear about the latest deals and special offers consider 'following' selected companies on Twitter. If you are selling a service, why not consider this avenue to generate more customers and more revenue?

3) It is in your best interest to buy your annual train and bus ticket through your employer rather than buy it yourself. If you purchase through your employer, your taxable income will be reduced by the cost of your travel ticket so you will pay less tax, less PRSI and less levies. This is a win/win for you and for more information please visit http://www.taxsaver.ie/en/

4) Investigate any transactions on your bank accounts that you don’t recognise.

5) Review all direct debits and standing orders on your accounts. Consider cancelling anything that you don’t need e.g. gym memberships that you pay for but don’t use, a magazine subscription that you no longer want, etc.

6) Avail of 'early bird' offers. Keep your lifestyle, just change when you eat.

Diet and exercise are crucial to maintaining a healthy body, but what about your mind? Abstaining from negative thoughts is an excellent place to start.

This week you could considerably improve your financial health by digesting the points below. They share one common thread; all of them could lead to an increase in your income.

1. Tax Refunds and Tax Credits

a) You can earn €10,000 a year tax free if you rent a spare room in your main residence. This is referred to as ‘Rent A Room Relief’ and there are more details at: http://www.revenue.ie/en/tax/it/leaflets/it1.html#section4

b) Don’t forget that nursing home expenses constitute ‘medical expenses’. You will get a tax refund at your highest tax rate once the nursing home is on the Revenue’s approved list: http://www.revenue.ie/en/about/publications/list-approved-hospitals-nursing-homes.html. For more information on contacting the Revenue and how to make a claim, please take a look at my first blog post.

c) You can claim tax relief on some third level tuition fees for yourself or your dependents. To read more visit the Revenue’s website at http://www.revenue.ie/en/tax/it/reliefs/tuition-fees.html#section6.

d) There could be a tax credit you did not know you were entitled to. I suggest you glance at the categories on: http://www.revenue.ie/en/tax/it/credits/index.html and determine if any are relevant to you. It will take you 5 minutes to do this.

2. Business Expenses

Often employees incur business related expenditure which is later reimbursed by their employer. If you are waiting to be reimbursed, take action today to obtain this refund.

3. Additional Income

Having multiple streams of income reduces your dependency on any one income source and gives you more options. Do you have a hobby that you can use to earn additional cash e.g. teach music or become a golf instructor? Whilst this may not concern you now, it is worthwhile exploring today where this could lead you in the future.

4. Cash on Deposit 

It would be tragic to let your savings sit in an account that pays 0.5% when you could be earning 2% (i.e. 4 times more interest!). No matter how small your savings, check the interest rate. It’s your money so make sure it's working for you.

Now, how is that Money Diary coming along? If you are unsure where your January cash went, just start afresh in February.

Remember you always have choices, you can choose to take action or not to take action...and don't forget about your thoughts!

Facts are crucial where money and finances are concerned. Without facts how can you really know where you stand financially? Be honest with yourself and remember, the more you deal in facts the less you deal in guesswork.  

This week I want to recommend an exercise that can facilitate you in becoming more ‘conscious’ around your finances. This is a straightforward financial coaching exercise that I often use with clients (if you have not used excel before, I promise you it is really straightforward so do not be put off!). Before you begin, you will need:

• A print out or screen shot of your January bank account transactions
• Your account balance on Jan 1st and Jan 31st

Believe that you can do this. If any negativity or resistance comes up, choose to bypass it and remember that this is just negative self-dialogue that does not serve you.

Here are the five steps to completing your money diary:

1) Open http://www.lindamnicholson.com/USERIMAGES/moneyflow.xls

2) Enter your Jan 1st bank balance into cell C5, which is highlighted in green (if you are overdrawn enter as a negative)

3) Transaction by transaction, start entering your income and expenses for January

4) When you are done; enter your Jan 31st bank balance into cell C48 which is highlighted in green

5) There should be no difference in the orange cell. If there is a difference go back and review your expenses; you may have entered a number as a positive instead of a negative. Remember to save your file.

Now you have an accurate representation of how money flows in and out of your bank account. Whatever the outcome of this exercise, remember the past is the past so leave it behind you. Think about what you can do differently going forward, focus on solutions. 

Preparing this data regularly is an excellent habit to develop. Any system is better than no system so if you prefer, use a notebook, the back of an envelope, etc..

Now that you have completed your money diary, a treat is most definitely in order so go on.... spoil yourself! Oh and don't forget those Christmas or birthday gift vouchers that are still lying around, use them!

Every day you make a choice to think positively or negatively. Your thoughts create your reality, so why not choose positive thoughts? Plant some acorns in your mind and awaken your inner giant!

This week, I want to suggest two 'behaviours' that could improve your finances and enhance your financial education.  

My first suggestion is that you Review Your Bank Statements. Look closely at your next statement and question anything that is unfamiliar or unnecessary. Ask yourself:

• Do you recognise each transaction?
• Do you need to query or follow up on anything?
• Are you paying bank charges? Bank charges are usually avoidable so ring your bank and ask them what you need to do to get free banking. 

My second suggestion is that you Consider Reading The Personal Finance Sections of The Newspapers. I recommend the ‘Business & Money’ Section of the Sunday Times and the ‘Business’ Section of Friday's Irish Times. Both usually contain a lot of interesting articles that can result in real savings for you. However, as most ‘non business’ people don’t read the business pages, unfortunately they miss them. Why not commit today to reading just one article next Sunday? 

I've listed two money saving tips below that are typical of the information you could gleam from these sections.

1) Life Assurance for smokers and non-smokers

Most life assurance companies will reduce your premium once you are off cigarettes for a year or more. Could this be you? If yes, make sure to contact your broker or life assurance provider for a cheaper life assurance quote. If your quote is reduced by €15 per month that’s €180

saved for every remaining calendar year in your mortgage term.

2) Credit Card Stamp Duty

Did you know that you pay €30 stamp duty per card every April 1st to the Irish government? Well you do now. If you are cancelling a card, remember to ask your credit card company to confirm in writing that the account is closed and that you will not be charged stamp duty.

If any of the above are relevant to you, I suggest that you take action today. Whatever you need to do e.g. make a phone call, fill out a form, etc.. as the slogan goes, 'just do it' and say hello to solutions! 

How different the story would be if the giant had a burglar alarm. Financially, the best investment you will ever make is choosing to become consciously aware; paying attention is the best security system you will ever have.

This week, I want to focus on credit card debt. If you have an overdue credit card balance, you have everything to gain by dealing with this sooner rather later. In addressing this, think about how much lighter you will feel, how less stressed you’ll be and how much better you’ll sleep. Oh and it will cost you less money.

When used correctly, credit cards can be wonderful. By ‘correctly’ I mean that you clear your balance in full each month so you are not duped into paying interest. The easiest ‘trap’ to fall into with credit cards is to just make the minimum monthly payment and let the debt build. Credit card companies love it when you do just that because this makes them a lot of money. Credit cards come with two main health warnings:

• Interest is charged each and every month on the outstanding balance until you pay your bill in full (you may need to reread this sentence to fully appreciate how credit card debt can build and build)  
• Interest rates can be very high

If you have credit card debt and I say this with no judgement, there is no point in feeling guilty. There is no substitute for action so why not make a conscious decision today to stop spending and make a commitment to clear your outstanding balance.

Below are some practical steps that can facilitate you in achieving both. Before you read these, it may be useful to write down what you owe on each card and what interest rate applies to each card.

1) 'Because you’re worth it' take a scissors to your credit card. There is no point in building more debt if you are behind with repayments.

2) Use any extra income, tax refunds, etc.. to clear down your credit card. Pay off your most expensive card first.

3) Consider using some of your savings. It’s always advisable to have a ‘rainy day’ fund, however if you are paying 15% interest on your credit card and receiving 2.5% interest on your savings, it’s worth exploring this option.

4) If your interest rate is high, you could ring your credit card company and ask for a lower rate or investigate switching to another card. The Financial Regulator’s website has an excellent summary of credit card charges at: http://www.itsyourmoney.ie/creditcardcomparison

5) MABS is a government agency that provides support to anyone who has concerns about debt. For more information please visit: http://www.mabs.ie/process/step3.html

Jack would never have found those golden eggs unless he climbed up that Beanstalk. No matter what your goals, it is crucial that you take action to achieve results. Any action is better than inaction, so be realistic, start small and remember that from little acorns giant oak trees grow. 

This week I want to bring your attention to the wonderful ‘P21 Balancing Statement’. Last September, I ‘gently’ alerted a friend to the fact that he had worked only nine of the twelve months in 2008. I suggested that he contact the Revenue and ask for a P21 Balancing Statement. A few weeks later he received a tax refund for approximately €1,500!

How can this be? The Irish tax system is designed to spread your PAYE tax liability evenly across each month so that your take home pay is relatively consistent month on month. The system sort of assumes that you will work a full calendar year so if you have only worked for part of the year or if you have switched employers during the year, you could be due a tax refund. As is the case with medical expenses, you can go back 4 years!

A P21 Balancing Statement is a document supplied by the Revenue that can tell you whether you have over or underpaid tax. The P21 will also summarise your income, your tax credits and the tax you have paid for the tax year. For more information please visit the Revenue’s own website at: http://www.revenue.ie/en/personal/p21-balancing-statement.html.

I know that some of you may have reservations about contacting the Revenue in case it turns out that you owe them money. Their website states that ‘if you have underpaid tax your district office will indicate if, and how the underpayment will be collected - usually by reduction of your tax credits for a subsequent tax year’. But what are the chances of underpaying tax? The PAYE system is designed to collect tax and it does that extremely well in my opinion so the chances of overpaying are far greater than the chances of underpaying.

The onus is on you to request your P21 Balancing Statement and you can do this effortlessly in one of two ways:

1. Logon to http://www.revenue.ie/en/online/paye-anytime.html - select Tax Credits & Incomes and request a P21 Balancing Statement or
2. Send your P60 to your local Revenue office and request a P21.

It doesn’t get any easier than that!

Last week I rediscovered pantomime at the Gaiety Theatre when I saw Jack and the Beanstalk. This magical fairytale used to fascinate me as a child; do you remember it? Magic beans, a beanstalk, a giant and a hen that laid golden eggs! Over the next few weeks, I want you to consider what magic beans you could be sitting on and how with a little effort on your part you can generate some additional cash.

This week, I want to focus on ‘medical expenses relief' i.e. if your annual medical expenses exceed €125 the Revenue will give you back some money. All you need to do is fill out a form, which is as quick and easy as downloading an album from iTunes. 

Let me whet your appetite: I had laser eye surgery done in Jan 2007 and in early 2008 I got a cheque from the revenue for about €1,000!

How does it work? If your annual medical expenses are in excess of €125 (if you are claiming for yourself) or in excess of €250 (if you are claiming for more than one person), then you are entitled to a tax refund. You can only claim relief on expenses that you have not been reimbursed for e.g. VHI. I got back 42% of the cost of my surgery, for expenses incurred in 2009 and onwards you will get back 20% of your expenses.

What do I mean by ‘medical expenses’? I mean, doctors’ and consultants’ fees, hospital fees, medicines, physiotherapy, etc.. There is a wealth of information at http://www.revenue.ie/en/tax/it/leaflets/it6.html  so please take a look.

All you need to do is choose one of these steps:

1. If you are a PAYE worker you can login to http://www.revenue.ie/en/online/paye-anytime.html  and submit your claim online or you can
2. Fill out a MED1 form and post it back to the Revenue or
3. If you are someone who completes an annual tax return (i.e. Form 11), then all you need to do is fill in the part of this form relevant to medical expenses.

You don’t need to send in receipts but do store them in case they are needed at a later date. Oh and did I mention you can go back 4 years from the current tax year?

Today you could make a conscious choice to spend a little time identifying your medical expenses. You could then choose to take the time to submit your claim(s).

Go on its your money……. what is stopping you?

Oh and by the way for anyone interested in a really good show, feed your inner child and go along to the Gaiety to see the panto!