Are you a f inancial wizard or a sucker? Take the test
ARE you financially savvy enough to understand when the wool is being pulled over your eyes?
Alas, year after year, too many people are hoodwinked by stealth taxes, misleading marketing and a myriad of other ways we are ripped off. Take this quiz to see how savvy you really are.
1 The Home Carer’s tax credit is worth up to €1,200 to families. How many families who are entitled to it either don’t know about it or don’t bother to claim it, according to a Taxback.com survey last year? (a) 6.3% (b) 63% (c) 20%
2 Interest rates on my savings are 0.1%. My mortgage is 4.25% variable. I am afraid of risky shares and don’t understand them. Should I put my spare money into:
(a) Shares. You have to dive into these things (b) Paying off my mortgage (c) Keep it on deposit even at 0.1% interest
3 If I get 2% cash back when I take out a €200,000 mortgage but pay 1% more in interest over the lifetime of the loan, I will be: (a) better off (b) worse off (c) much, much worse off
4 I don’t have time to shop around for everything. So I should concentrate on getting the best deal on: (a) My mortgage (b) Bank charges (c) Crushed avocado on toast
5 Most people in the private sector will retire on: (a) €12,391 a year (b) €220,000 a year (c) €50,000 a year
6 Rising property prices increased the average Dublin home owner’s wealth last year by: (a) €3,300 a month (b) €2,000 a month (c) €7,000
7 I will get a €5-a-week State pension increase in the Budget. In 2018, I will be: (a) €5 better off per week (b) €1.45 better off (c) No better off
8 I earn €45,000 a year and got a wage increase of €200. A couple of tax breaks give me €200 a year more. Inflation will be 1% next year. Next year, I will be: (a) €100 a year better off. (b) No better off (c) €50 worse off
9 Running the country costs per year: (a) €670m (b) €320bn (c) €72.5bn
10 Social welfare costs: (a) €20m (b) €100bn (c) €20bn
ANSWERS
1. (b) Incredibly, nearly two thirds of people who are entitled to this valuable credit – 176,000 families – apparently don’t bother to claim it, according to Taxback.com. And the Government isn’t in a hurry to tell them.
2. (b) Never put your money into something you don’t understand. Pay off your mortgage. It’s a no brainer, earning you a sure-fire, taxfree return, unlike shares which are highly volatile and highly taxed.
3. (c) Much, much worse off. The cashback deal will give you €4,000. Paying 1% extra interest will cost tens of thousands.
4. (a) Despite the fuss we make about bank charges, you can save around €50 a year – compared to up to €100,000 for switching mortgage.
5. (a) More than half of workers have no pension and will get the princely sum of €12,391 if they qualify for the contributory pension. This is why auto-enrolment is coming in. You’ll have to join a scheme but won’t be forced to stay in.
6. (a) Dublin house prices rose by €3,300 a month at the last count – more than the average person earns.
7. (b) Because the increase won’t be paid until March 26 and inflation is 1%, this will erode around €3.50 a week from your pension. Pensions and all other welfare payments should be indexlinked to inflation but are not.
8. (c) Inflation will reduce the value of your wages by €450, which is €50 more than your increases.
9. (c) We’re a pricey country to run. Questions 9 and 10 will give you an idea.
10. (c) Social welfare is our biggest spend. Pensions alone cost €6bn with another €7bn spent on income supports. How savvy are you?
8-10 right
Nobody is going to take you for a sucker.
5-7 right
You’re fairly well clued-in but need to bone up a bit.
1-4 right
Don’t feel too bad. Some of these questions were hard. But you need to get to grips with money matters. Check out askaboutmoney.com, citizensinformation.ie and ccpc.ie. And keep reading Your Money on these pages!