The Money Doctor's Budget Predictions – And Some Helpful Advice

It’s budget week and everyone’s feeling nervous. So what have we got to look forward to? The Money Doctor John Lowe offers his predictions – and some advice on how to deal with the new developments.

1. What do you think will affect families most in the new budget?

We have heard of a €10 cut in the Child Benefit from €140 to €130...that will save the government €120m. The introduction of a property tax will also have an impact... they are saying a possible 0.2%...so a €500,000 home could cost the family €1,000 each year.

There will be an announcement on water charges with the introduction of water meters to all households for the tax payment to commence from next December 2013’s budget.

Other areas affecting families will be VRT, petrol and car tax increases…PAYE households therefore may have to pay a total of over €3,000 in additional taxes next year through a combination of increased PRSI and Universal Social Charge contributions, reduced pension relief and that property tax...plus the old reliables,alcohol and cigarettes, will be targeted thus adding up to a fairly austere 2013.


2. Is there likely to be any good news for ordinary families?

For those on low incomes, there will be some respite. Elderly people in high value homes who cannot afford the new Property Tax will be allowed to pay it ‘from the grave’...their estate will pay the tax after they have passed on.


3. What do you think is the most important factor to bear in mind if you’re feeling overwhelmed by money issues?

You can’t get blood from a stone... work out your annual budget.. it is simple to work out precisely what your annual expenditure is... it is also simple to see how your annual income matches that expenditure and if you have exceeded the expenditure you have two choices – cut costs or earn more. Sometimes though it is not possible to earn more and you may have even pared til you can pare no more...so you then PRIORITISE... your family comes first.. food accommodation and clothing.

If you cannot pay your mortgage, pay SOMETHING... negotiate with your lender or creditor and be upfront and honest with them. No point in paying the mortgage when you cannot feed your family. Let them see what you are living on. The health insurance may have to take a deferral or you may even have to pull the children out of the fee paying school. Necessity is the mother of invention but don’t be overwhelmed, be practical. If you cannot afford something, you cannot afford it, so move on.