You and Your Money by Ademiniyi Adelekun

As the economic downturn continues, saving and investments are becoming particularly important. Of course, equity-based investments are not currently the most attractive, even though history has taught us that equity is still the best investment instrument over time. For those who hang in there, it is certain that the economy will turn for the better; what is uncertain, however, is when exactly that will happen.
But there are other ways to manage your money, and it is important to know how best to save, especially for those who have surplus earnings. It would be highly unwise to spend all your income just because you are afraid of losing whatever you could save, especially if and when you have the opportunity to save it.
The most basic way of saving your money – and one that is definitely not advisable – is to leave it ‘under the mattress’. The risk associated with this should be obvious! And at the same time, if your money isn’t in a financial institution, it’s not earning you any interest. It may be argued that the present interest rates are nothing to write home about, but it will still be something, no matter how small it may be. Besides, putting your money in the bank or any financial institution gives you a track record of savings and would help your credit rating in future.
One fear that may be preventing people from keeping their money in a bank or financial institution is the fear of insolvency, which is understandable given the scary news of banks collapsing over the past six months. But this risk has been removed in Ireland by the Government’s guarantee of 100 per cent of all depositors’ funds. In short, no matter how much you may have saved or wish to save in an Irish-registered bank, you are assured you will get it back even if the bank should collapse. 
There is a wide variety of saving and investment options with financial institutions, especially for people who may have been able to accumulate a lump sum and want to make it work for them to get through these rough economic times. I hope to discuss these other ways in future.

Ademiniyi ‘Niyi’ Adelekun is the principal at Alpha Royal Financial Services in Galway
niyi@alpharoyalgroup.com

This article is a general description of situations and circumstances. Please consult a financial adviser for personal advice that would take your specific situation and circumstances into consideration