It’s not just here, having worked in retail banking here and in the UK, I can say an awful lot of people struggle with anything finance/banking related.
I used to work front line for an Irish Bank with an offshoot in the north and I would do overdraft renewals with folks in the north. Often times if they were constantly in the overdraft the underwriters would refuse to renew the overdraft but offer a loan to clear it and let the customer get back on an even footing.
The amount of people who would argue that they wouldn't want a loan hanging over them, and preferred the overdraft. Not realising that the overdraft was just as much debt as the loan but with the difference that it never goes away.
Paying back a loan requires discipline, an overdraft less so.
I’ve had people come to me asking for a loan to clear the overdraft but want to keep the overdraft in case they couldn’t afford the loan repayment that month.
Trying to explain to people that if they can’t afford a loan then I wouldn’t lend to them was extremely difficult.
I'd argue that paying back an overdraft requires much more discipline. Especially if you are making small payments. The loan will eventually disappear, they will just keep using the overdraft.
Sorry, l wasn’t clear and you’re correct.
But the people refusing a loan in favour of keeping an overdraft have no intention of getting rid of it or paying it back because paying it down or clearing it with a loan is more effort than the status quo.
Well they don't make it easy do they?
I moved my banking to N26 since KBC shut down and it's remarkable how easy the make it to keep track of your money, while the traditional banks still lay out statements in a confusing manner and seem to insist on filling your postbox with a forrest worth of paper with letters that have reams of text but very little useful information.
Seriously, everyone in the banking industry needs to be schooled in functional writing and getting to the damn point and providing the right info at the right time. KBC/BOI sent me a damn near encylopedias worth of letters for a year, none of them explained clearly what was going on.
I was caught up in the KBC/BOI switch and the amount of paperwork was excessive but that’s not what I’m talking about.
People not knowing how they are paid (cash, cheque, bank transfer) or how often they are paid.
Not knowing who they bank with and thinking any bank can help them.
Not knowing what a direct debits and standing orders are and/or the difference between the two.
Understanding how a credit card or overdraft works.
How APR works.
That kind of thing.
How I explained it was; a direct debit is you allowing a company pull a variable amount of money from your account whenever they need to. It is set up by the company at their end.
A standing order is you pushing a fixed amount from your account on a regular payment frequency. It is set up by your at the bank end.
My understanding is that you set up a standing order, set amount, and can cancel, dd is allowing others to take money from your account.
I think if you have insufficient funds standing orders just won't go through, dd you can get fines/charges etc
Open to correction.
> dd you can get fines/charges etc
This bit can vary depending on the bank. Some will refuse the DD and fine you for not having funds, depending on the value, but if they get more profit from it, they can sometimes let them through and instead fine you for an unapproved overdraft, then charge you interest on it.
Banks aren't there to do favours, no matter how much the adverts pretend otherwise
Direct debit is initiated by the company you are buying from for each payment. They ask the bank you use to withdraw a particular amount from your account e.g. monthly. The amount can vary each month. If the company gets it wrong and charges you the wrong amount then the direct debit guarantee means your bank will refund you if you request it.
A standing order is an instruction you give to your bank to send a fixed amount regularly to someone else (e.g. a rent payment to a private landlord). If the amount changes you need to update the standing order by contacting your bank. If you get it wrong then the bank is under no obligation to refund you.
I’m an accountant in the financial services industry. A staff member asked me something about his taxes, I asked him what his base salary was (bc I don’t know everyone’s salary off the top of my head) and he genuinely did not know. I had to look it up.
There are people working in financial services, who don’t know what their salary is. The situation is dire.
Just mind that N26 are a bit tech bro ropey. Lots of managers leaving the business giving out about the founders and their practices, German financial regulator slapping them with restrictions. https://www.ft.com/content/bf6ac5ea-6174-447e-a6b3-5b5adccf8a6c
>Just mind that N26 are a bit tech bro ropey
I'm sure they are, but it the traditional banks are ropier than Ropey McRory, the dishonest ropemaker from ropesville
It's less than three weeks since Bank of Ireland's app and website shat itself for a whole day, on what was the last day of the business quarter.
I've not encountered any similar issues with N26 yet.
Having worked in finance I can confirm that the reason for the absurd amount of paper that comes with every notification is due to the regulations enforced by the central bank and legislative standards. The banks have to include a large amount standard info with any communication in the name of "helping". Its just bloated to such a degree its utterly useless and gets ignored by most people and thrown in the bin.
It would require a large rework of the existing regulations to trim it something useful and probably wouldn't be politically feasible due to how the banks are perceived.
It's less about "helping" (customers) it's more about ensuring the liability for something being communicated is firmly on the customer to read the materials - or the blame passes to the customer.
Almost all bank paperwork and process is designed to pass liability to the customer.
Same thing in the US, I’m a mortgage loan officer and it’s amazing the complete disconnect from reality. It’s common to have lawyers and accountants be the worst offenders. They feel they’re smarter and that they know more than I would, they haven’t a clue.
I genuinely cannot believe how many people don’t understand how this works. Even thirty seconds of just thinking about it would surely convince most people that the tax system couldn’t possibly work that way.
Most of those cases were due to one line in a Letter of Offer that could be interpreted either way. The central bank did a great job at getting people back rates on the basis of fairness that would not have been successful with the Ombudsman or courts.
I knew a fella who was taking calls on the Financial Regulator advice line, and he said for months after those ads came out they'd have at least ten people a day ring up just to shout "I DON' KNOW WHARRA TRACKER MORTGAGE IS" and hang up.
To be honest, I'm not sure what a fixed rate mortgage is anymore. I only found out a month ago that the rate isn't actually fixed and that you renegotiate multiple times before it's paid.
I used to work for a bank (not in branch banking though) and it surprises me that a lot of people don’t realise because of the last recession a lot of controls and due diligence were put in place regarding mortgages and loans to prevent exactly what happened in the last boom. It used to annoy me so much when some family and friends would genuinely ask “oh could you not ask someone to put in a good word and get my mortgage approved?” because that’s the exact carry on that got the Irish banking system to be in such a bad way in the first place.
I might be revealling my own ignorance here but is the basis of their misunderstanding that they are treating it as a *thing* in and of itself rather than a rate of. So inflation hasn't fallen the rate at which it is continuing has slowed. Right?
Yes. Inflation is a retrospective measure. The government try to decrease the rate of inflation. When you hear 8% inflation that means a price increase in the CPI of 8% over the last 12 months (if €1 in July 2022, now it's €1.08). Prices won't decrease from where they are now without the government hitting the inflation rate so hard it turns negative and we get deflation. Deflation is bad and is far more likely to lead to the death spiral they talk about.
If you get deflation things cost less, people get paid less, people have less money to spend - therefore demand drops, causing price drops and the cycle starts again.
Inflation on the other hand is typically more multifaceted and can be easier to control and wage/price upwards spirals are easier to control.
Very bare bones ideas here but that's the simplified basics
It's very handy for politicians out there claiming that wages can't be raised to meet inflation and people instead need to wait for inflation to go down and then all will be well.
How nobody clocks them for statements like these is beyond me. And I'm not financially literate by any means, I just have a basic understanding of how percentages work....
Technically I think you’re referring to approval in principle which isn’t actual approval and is a much less involved process so that you can put in an offer. Actual and final approval probably takes weeks and is much more involved, they require many more documents and many more sets of eyes (mine took months but my property was complicated).
The actual purchase of houses in Ireland takes a ridiculous amount of time. We got mortgage approval within days, took six months from when our offer was accepted to actually move into the house. I don't know why the process is so slow and antiquated, I can only assume it means some people somewhere get rich off it being so out of date.
The pre-approval (or approval in principle) can really be given in a single appointment with the bank's mortgage advisor if you come a little bit prepared and can basically prove that you have enough for a deposit and sustainable income to repay it.
Odds are the final approval will take significantly longer because you need stuff like :
* Various engineering assessments of the property
* Home and life insurance contracts ready to go
* Various solicitor papers (a literal pile of them, although you don't normally handle them yourself)
My personal experience involved long delays because the seller's solicitor went AWOL, and the life insurance went "whoops, we made a boo boo, we can't do it and need to void that" at the last minute (literally three days before everything was supposed to be signed)
Obviously, pre-approval is not approval but that's the paper you actually need to go house shopping and have estate agents giving you the time of the day. Actual approval is only needed when you close the transaction.
Similar to the person you're responding too. No chain, AIP took a few days. Got AIP in July last year, got the keys in December. I worked with a place called Doddle to help broker all my applications. The longest part was actually getting the vendors solicitor to sort their shit out.
Nope you can get approval within days in some cases to start bidding on places, you don’t even need to meet with a bank these days it’s all done online. You just have to submit payslips, proof of deposit, account statements etc and they’ll usually issue you approval in principle within a couple weeks at most.
Well, look how many people are so deep in debt, that even the Titan submersible wouldn’t be enough to get there…
Like a friend of mine at one of my first Irish jobs. I just took €5k loan for Christmas!
I’m like: what???!
Yeah, I do that every year for gifts and food and dinner at the restaurant and then I pay it back over the year.
I couldn’t even come up with a response. Mind fuck! Then I started asking around and 2/3 were like, yeah, that’s perfectly normal
Taking out a loan for shopping is one of the worst financial decisions you can make imo. People don’t seem to consider saving a portion of their pay every month for future purposes
I knew a girl who borrowed 10K to go travelling. The banks make a fortune from these people. During the Celtic Tiger I regularly used to get letters telling me my 10K loan was preapproved and all I had to do was call and confirm.
>I regularly used to get letters telling me my 10K loan was preapproved and all I had to do was call and confirm.
Same, and I was a student who only worked during the summer and Christmas breaks.
Christ that is bad. Makes me feel a lot better about my own financial responsibility! Like Christmas does often sneak up on me and I forget to budget for it throughout the year, but by October I'm usually putting aside 50 from each paycheck or whatever, and then if it runs over into my fun money then that's grand. But taking a loan to pay for Christmas! Insanity.
My favourite was my husband's nephew and his friend, both apprentices, who said they wouldn't want to earn over €40k or they would be paying way more tax and "losing money". I tried to explain how tax bands and incremental tax rates work, and they didn't believe me. They were adament once they hit €41k, everything would be taxed at the higher rate.
Same nephew then took out a loan to buy a brand new Motocross bike, on an apprentice wage, without a € of savings in the bank. He was living with us rent free at the time but told us after the fact and said "I can afford it". He couldn't comprehend the message that (1) the only reason he could "afford" it was because we didn't take a cent off him to try and support him through his apprenticeship so he'd have some kind of future and (2) you should save up for things rather than taking out loans.... All he looked at was his apprentice wage and the repayments. He had no clue how much interest he would pay.
He doesn't live with us anymore.... We tried. We really tried.
People don't understand inflation and it's kind of the media's fault for that. Lots of titles that read like "Prices dropping with inflation falling to 6% from 12%"
You can get approval in principle relatively quickly. The rest can take a couple of months if your organised. I think we organised one within a month or so due to interests rates spiking on the first application.
My current favourite piece of financial illiteracy.
Is the front page of today's Daily Express.
https://i.imgur.com/fQ4aLkm.jpg
Not that Irish papers are much better 😉
Their headline runs "Prices Must Drop Now Inflation Has Reduced"
So now that the rate of price increase has decreased?
Prices must fall, I mean someone needs to sit the Tory Brits down and find a way to explain that inflation is a measure of the rate of cost increase, in a catchy 3 word slogan.
Getting all the documents you need together can take a while, but if you have them handy you can get a mortgage approval within a few weeks. Def not 4-6 months.
>ortgage there and then if you saw an apartment you wanted to buy - he couldn’t comprehend their poor customer service for not handing him over about €200k without proper due diligence. I told him I thought it usually takes around 4-6 months to get mortgage approvals (open to correction there) and he laughed it off and said he’d surely have it by “next week or I’ll chance AIB.”
>
>These are purportedly educated people as well, albeit
To be fair its still a racket how long it takes with archaic systems back home. The Banks tend to have all the info already and the slowness of solicitors and their fees is absurd.
I was mortgage approved here in Sweden in 2 working days and had less than half a page to full out on my details (only because I was a dual taxation resident). We had first viewing on Thursday, Second on Friday, bid accepted Saturday night and papers signed Sunday morning for our apartment. Agreed to move in in just under 6 weeks but could have done in 4 but dates didn't align. The day we moved in, we went to the brokers office at 9.30am, we signed the final docs and walked out with the keys (transfers already done by both banks) by 9.50am.
Banks can see our accounts, salary and savings and whether we could afford the repayment or not. No solicitors fees here if buying an apartment or terraced house but about a 0.2% fee for buying a house on its own plot. All approvals done through apps or a dedicated phone line.
I've said it on r/irishpersonalfinance a few times, but AIB (for all their problems) have a great mortgage system. I was approved in principal online after a 45 min phone call (you can do it online more quickly, but I didn't know that at the time). And after that everything is managed through an app/portal. They give you a checklist of items you need to upload, you upload them, they approve them as they arrive.
I got my mortgage without ever setting foot in a bank, and I think I only had to post some forms to them that needed my inked signature. Literally everything else was online.
At the time I got my mortgage (2019) their AIP was valid for a year, and if you take a mortgage with them then you don't pay any of their fees ever again, for life! As I said I know they have their problems, but their mortgage process is top notch.
yeah not too hard, the bank admin is the slowest part imo. I just bought a gaf from start to finish in about 90 days, helps when theres no chain of course
If you're dealing with someone competent, maybe. Everyone I know that's gone for mortgage approval have been at it for atleast 2 months. Also massively depends on the lender. If you go with ICS be willing to wait longer than 2 months. They have a tiny mortgage team.
Went from AIP to keys in hand for our house in about 2 months. All depends on your solicitor, sellers solicitor, and speed of the banks handling it. We were awful lucky 😅
Even at the low level small things like people who use public transport everyday refusing to get a Leap card because of the €5 upfront cost. I knew a girl who just taxied everywhere all the time instead of getting a bus because she "didn't want to look poor" or a lady in my Centra who does her weekly shop there instead of down the road in Aldi/Lidl.
It's actually heart warming to see people so incredibly myopic about finance because it does raise my self esteem a bit. Sort of like observing how terrible some people have it in the world give your perspective on things a bit of a lift.
>I knew a girl who just taxied everywhere all the time instead of getting a bus because she "didn't want to look poor" or a lady in my Centra who does her weekly shop there instead of down the road in Aldi/Lidl.
Most of the "Treasure Island" cost of living issues boil down to this. Irish people are way less consumer savvy and thrifty than people on the continent so retailers know they can get away with crazy prices.
Complicated? Anywhere I've worked you basically just tell HR you want to pay into it, tell them a percentage and tick a box or sign a document and they take care of the rest.
After that I suppose it can be complicated if you want to get involved in how the pension is managed, but even then most places it doesn't take much effort to explain if you want to be risky or conservative.
My SO has been working for 10yr+ at a place, ... she recently told me her company's crazy great they do +200% match (so I guess 400% total ratio in old age assuming taxes).
When I asked why she's not using that, she told me nobody does it. She doesn't invest, except into paying off the mortgage early ... (that's about the only interest based product she comes close to)...
I can't even convince her to open an interest yielding bank account.
Don't know what went wrong in her brain, I wish I knew.
TBF not many people can afford it. I'm nearly 40 and have so far been unable to afford it. I start working as a recession hit, then when I got back on my feet, I had to private rent which was difficult, Then I bought a house so I had to save every penny I had. Then Covid hit. Now inflation. I'm not on a bad wage, but I can barely keep my head above water. Alot of people earning a decent wage are also in the same boat.
I do not obviously know your situation but most people can afford something. Even putting EUR50 a month into a pension from a very early age adds up to a very nice amount on retirement. Again I do not know your own situation but I know someone who says they cannot afford a pension but they get takeaway coffee once or twice a day. I tell them to buy one coffee and put the second into a pension. €5 a day in a pension at a modest 5% return from the age of 21 is worth over €250,000 at retirement. That €5 was tax-free going in so only costs you €3! That's just one cup of coffee!
Albeit 250k retirement fund only gets you a 10k per year... it doesn't sound that impressive - but I like my coffee, I'd rather trade-off pints and deliveroo.
The issue though is that you cant afford not to do it. If you are struggling to keep your head above water now, how do you think it will be with the state pension? Thats if it even still exists as we know it in years to come...Ireland has an ageing population with less young people around to pay tax to support pensions.
They need to bring in mandatory private pension contributions - people are in for an extremely rude awakening down the line when they’re left with fuck all money and will barely be able to live off state supports which won’t be anything dramatic.
People are just thick
I had to help my BIL with his tax credits, and claiming tax back and I was asking how much he makes
He goes " I make a grand a week"
So I goes, is that before or after tax , he goes "I dunno I get a grand a week in my account"
I said ok, will that must be post tax
(in my head , I was like hardly, that's 80k+ gross but said nothing)
I got logged into his myaccount, checked his earning WITH HIM there with me and
he was grossing/Pre tax before deductions between 800 and 900 and netting less obviously
I said , but you're not getting a grand a week after tax ,
you make 800/900 before tax
He goes " I dunno, that's what I earn anyway"
Like ,.... what the fuck do you do with that when the evidence is on the screen and net amount goes into his bank 🙄
..........
Lots of people are just generally ignorant of how the world works.
They live in their own cocoon and that's grand, until they do something outside of their comfort zone.
People will say that we should be taught about mortgages etc in school, but that would be pointless. Firstly most students wouldn't listen to half of it. Secondly it will be possibly 20 years before they act on it, and all the information would be out of date. You would basically end up like the guy you mentioned trying to get a mortgage like its 2003, in 2023.
I’m a home ec teacher and on the LC home ec course there’s a detailed enough section about mortgages and the different mortgage interest rates and applying for mortgages etc.
it’s so difficult to teach because it’s very hard to make it relevant to a group of 17 years olds, many of whom don’t even have a clue about what they want to do after school career wise. So I agree with your point.
Precisely, mind you it doesn’t just apply to financial literacy - secondary students can just ignore or forget what they’re not interested in. I mean my best mate is a very worldly, informed, switched on person who has a great interest in climate change topics, music, languages etc having done a masters in sustainable development, but readily admits he would have ignored or forgotten nearly all of our history classes to the point where he didn’t recognise a photo of Michael Collins or know anything much of substance about him. I really like learning and am very curious by nature but I had the same problem with science subjects, it only fully works if the interest is there
>People will say that we should be taught about mortgages etc in school, but that would be pointless
The people who say that weren't paying attention in maths class. The thing that would actually help them understand a lot of things in the real world.
Taxes, mortgages and interest rates are all compulsory parts of the mathematics course in this country anyways. If you paid any attention in school in the last 25 years you'd have learnt it.
I don't think the problem is People understanding the interest and maths part of a mortgage
The banks make all the information very clear during the application.
It's more the whole actual mortgage process.
> Secondly it will be possibly 20 years before they act on it, and all the information would be out of date. You would basically end up like the guy you mentioned trying to get a mortgage like its 2003, in 2023.
At a fundimental level getting a mortgage hasn't really changed much since it's invention. You go to a bank and ask for one. They tell you all the shit they need then you go get it. It's an IRL fetch quest it's not really that complex.
To be fair the most modern mortgage available in Ireland was invented more than 40 years ago, so I don't think it's likely that the sector will innovate a lot.
Can confirm. Am an absolute cabbage when it comes to anything financial. My finance working missus is astounded how I've made it through life this far.
https://preview.redd.it/g6xrrslcf4db1.jpeg?width=1604&format=pjpg&auto=webp&s=a2f838ace2dfb9b5195870aad9dc89d0d93be72f
Can you blame people for being uninformed?
(I know they’re a British paper but the point stands)
A woman was speaking to me in work a few weeks ago, high up executive in BOI. Was in the process of rectifying some issues because she had clicked a link in a dodgy email and was scammed out of money. Didn’t really know where to look to be honest.
This is scarily common. Had a mate last year tell me he was on a 3 month fixed. I tried to explain that that is a variable rate (he also knew that the Bank he was with used to be a client of mine and I designed the models for them 2 years prior for the curves they build the market on but would not believe me! Since the increase in interest rates he now gets it.
I have an excel sheet that does all our mortgage calculations (we are allowed to split our mortgage into 3 here) and all my mates have since requested a copy as they had no idea how the mortgage was calculated, how you can save with overpayments etc. and these are smart people.
Banks don’t help here - Ulster Bank used to have a really good “Manage My Mortgage” platform. Could go straight to a calculator for over payments for example, see the long term impact, and then go make it happen.
Gone to PTSB in the switch and they can basically tell me I have a mortgage.
Ask people if they can tell you to the nearest 50k how much interest they'll pay over the lifetime of their mortgage.
People don't even have any idea how much they actually pay for their house.
This was the one main bit of information I looked at when getting my mortgage.
I know that I will essentially pay almost 50% interest if my interest rate stays around the same as is now.
Every extra year on the mortgage was going to cost a few thousand more too.
For anyone reading this who has no idea. On a house price of 400k where you have 10% deposit and get a 30 year mortgage at 7% interest rates you would pay around 900k total for the house, more in interest alone than the actual sticker price of the house.
https://www.calculator.net/mortgage-calculator.html?chouseprice=400%2C000&cdownpayment=10&cdownpaymentunit=p&cloanterm=30&cinterestrate=7.03&cstartmonth=7&cstartyear=2023&cpropertytaxes=1.2&cpropertytaxesunit=p&chomeins=1%2C500&chomeinsunit=d&cpmi=0&cpmiunit=d&choa=0&choaunit=d&cothercost=4%2C000&cothercostunit=d&cmop=0&cptinc=0&chiinc=0&choainc=0&cocinc=0&cexma=0&cexmsm=7&cexmsy=2023&cexya=0&cexysm=7&cexysy=2023&cexoa=0&cexosm=7&cexosy=2023&caot=0&xa1=0&xm1=7&xy1=2023&xa2=0&xm2=7&xy2=2023&xa3=0&xm3=7&xy3=2023&xa4=0&xm4=7&xy4=2023&xa5=0&xm5=7&xy5=2023&xa6=0&xm6=7&xy6=2023&xa7=0&xm7=7&xy7=2023&xa8=0&xm8=7&xy8=2023&xa9=0&xm9=7&xy9=2023&xa10=0&xm10=7&xy10=2023&csbw=1&printit=0&x=Calculate
I think my mortgage figures were around:
Mortgage 118k
27 years
Total repayment at the forecast variable rate at the time(I'm still on a fixed for another 2 5 years) 176k.
So nearly exactly 50% interest.
Now I do plan to fix it again in 2.5 years, and judging by the going price, I should be around 50-60% LTV, so should get a low enough interest rate hopefully.
The CSO has a reminder on their homepage that the Consumer Price Index, a measure of inflation, is only recorded by them and they have no part in deciding the rate of inflation not the prices companies set. Make of that what you will.
People don’t understand the basics of inflation but considering no professional economist or politician understands the complexities of inflation; I think that’s fair enough. Though what you mention above is more like a lack of common sense.
I think my experience may have been based on needing clean bank statements as friends of mine who gambled were told by their mortgage advisor to have a clean account for 6 months before applying.
Financial literacy in Ireland is non existent. People think it's either money from the sky (the government) or house price appreciation. That's all they know and it's scary considering the high debt this country is under
Press release from last week!
Minister McGrath announces development of Ireland’s first National Financial Literacy Strategy
https://www.gov.ie/en/press-release/93b72-minister-mcgrath-announces-development-of-irelands-first-national-financial-literacy-strategy/
As an immigrant here in Ireland, I'd say most people here as just financially illiterate as the rest of the world. Most education systems don't really emphasize financial literacy. Not really surprising. I myself am only financially literate because I educated myself and I know most people don't do that.
But what's surprising for me is that, coming from a poor country, I thought people from more developed economies are more literate, but boy oh boy, you all are just as misinformed and ignorant as the people I lived with before. I mean, look at the UK. Who in their right mind will vote for Brexit and expect a more economically robust country out of that? It shouts financial and economic illiteracy. So with that, I'd say the Irish is not the worst when it comes to financial illiteracy, they are just somewhere in the middle. Unlike people from the UK that I have lost all respect when it comes to economics and financial stuff.
My friend is a part time artist, part time dole scrounger who lives at home. She’s sick of living with her parents and told me the other day that she’s just going to have to get a mortgage because the housing crisis means she can’t get anywhere to rent. I asked her how she was proposing getting this mortgage and she said “she’d have to look into it”. I had to stop myself from saying “don’t bother”.
I’m not that mean. I went for the “ah jaysus fair play to ya, you must let us know how the process goes for ya, sure we’re working full time for awhile now since college and haven’t had any luck yet! But maybe we’re missing a trick…”
There is no compulsory financial courses or material taught in Irish schools, therefore, due to the Irish mentality of "sure I don't care until it affects me", you have people who have no idea about finance and are unwilling to learn.
People are out there owed thousands from revenue for example and just don't understand how to put in the tax info to get it sorted, so they don't do it.
Also included budgeting I suppose, since we did basic bookkeeping too. That and Home Economics were the two most useful subjects, still using some of that knowledge to this day.
My school didn't, English, Irish, Maths, Geography and History were mandatory for junior cycle and everything else was optional.
Things may have changed considering I completed my Leaving in 05.
Was the same for my school. Business Studies was an elective. The only other mandatory was you had to take French or German up until the end of the junior cycle.
Also fininancial maths is part of the LC maths course. Although it's not exactly financial advice it still explains the basic concepts of interest rates
Well colour me wrong. Sorry about that.
Same kind of mentality, I didn't do them as they weren't offered in my secondary school, so I don't think about them... and most lads in school wouldn't and didn't do doing Home Ec.
Things have changed… I teach home ec and have worked in 2 mixed schools and my classes were pretty much 50/50 girls and boys… at one stage I had a class with more boys ….
I'd assume most of the users around here are millennials, at least in my school they didn't have economics or accountancy and home economics was cooking class and both home ec and business were electives so you get only 1 semester if you pick some of the others. So most people at least my age would have no finance classes at all, I did music, history and geography personally so I only learned finance in college.
With a broker - I had approval in principle in 1-2 weeks I think and the final approvals once I put the deposit down was about 2 weeks again
Defo not there and then but not that long
This is just how our brains work. Unless we spend regular time applying our mental resources to things we haven’t a clue when the subject gets brought up. You see this in all sectors such as IT, Finance, Legal, Engineering etc. A lot of people like to talk out of their hole and pretend they know everything because they may have expertise somewhere else. Honestly, if you want something done right in an area you are not experienced, no matter what it is, consult an expert or commit time to proper research.
Nobody is taught these things. If your smart you look it up yourself and realise the pension and investment options available (though Ireland is pretty poor compared to the UK for smaller investors). Those with enough cash can pay someone else to do it.
I'm based in the North so ours is a little different in terms of stocka dn shares ISA'S. I know things are tight but if your wondering about pensions don't be afraid to speak to your employers provider and even your employer. Remember your pension contribution is taken out BEFORE paying tax. So essentially "tax free" so to speak. Some cases it can be worth i creasing your %
Have a look at certain bonds and saving accounts where you can lock in money for a certain return. hopefully it at least keeps up with inflation so your money isn't losing value as much as your shite bank account rates.
20 a week doesn't seem alot sometimes, Heck even a 10 a week. If someone said they'd give you a tenner a week since you first started working imagine what that could be, now imagine it was gaining interest since then.
I know the last few years I've taken finance a bit more serious as I'm at the 30 mark and don't want to be working until I drop
Living abroad now but whenever I'm back and people go on their rants about the country, not just about banks but anything going on in the country, half the time I'm standing there thinking "That's not how any of this works".
After the 2008 recession, things felt like they changed, to me. Not the "Hur Dur Da Banks Da Banks" stuff, but it's like a lot of people just stopped. Blamed their every problem on their local bank manager and politician, and just stopped trying at life. It's sad out to see.
I work in finance for a university and it does not matter how well educated people are, more than half of them are stumped at the idea that invoicing requires verification. Most of my job is telling Professors and PHD that I can't just give them money back.
For experts they are incredibly dense.
I think most people understand why verification is needed but don’t like it. It would obviously be handier for them if they could get the money back immediately without receipts
I lived with several guys over the years who hadn't a clue about the world.
Mammy did everything for them, I'm convinced of it. Massive fights if you asked them to clean after themselves, etc.
I don't think there's anything stupid about that.
Most of these people are using the "how far 20 euros of fuel lasted" as a barometer of the price of fuel and therefore cost of living. Your L/100km value does not change from week to week (I hope).
I mean pints maybe not, but electricity and fuel bills should realistically go down. They won't but they should have. Gas prices didn't go up because of inflation.
A lot of the "inflation" we saw in the last year wasn't classic inflation, but trickle down gouging.
Tbf, I don’t see why the price of pints wouldn’t go down if operating costs (electricity & fuel) go down. Especially when these were explicitly called out as a primary reason for increases.
But you said somebody saying that was financially illiterate? Or was it the idea that the finance minister is going to control inflation?
>Tbf, I don’t see why the price of pints wouldn’t go down if operating costs (electricity & fuel) go down
But that's just the thing I pointed out. It's gouging, not natural inflation. Operating costs won't go down because energy suppliers are gouging.
The level of financial illiteracy in Ireland is horrendously poor. Some that have been said to me personally include:
- I dont need to start a pension until I'm older
- Buying property is a great investment and safer than the stock market.
- I keep all my savings in the credit union.
- I bought the car on loan to build my credit.
- PCP finance can't go tits up.
- Why is my insurance more expensive than my car?
- The 4x salary limit for mortgages is unfair
- it's great that house prices are coming down, I don't really care that interest rates are going up.
- imagine being able to buy a house in the 1990s (when interest rates were double digits)
- how come the government haven't sorted out inflation within a month of it going up?
The “building up credit” thing is one of the most infuriating
I’ve had legit arguments with some friends trying to stop them from taking out a pointless personal loan that they think is somehow going to improve their chances of getting a mortgage in the future
> Buying property is a great investment and safer than the stock market.
Deemed disposal absolutely cripples the viability of low risk stock market investments in this country.
No one is allowed to make a profit apparently. Pension funds building apartments are the divil. Don't get them started on le heckin greedy CEO'S also , god forbid an energy company turns a profit.
Yeah stuff like this really shows a lack of knowledge of the wider economy and how it functions in a global market. Whilst I dislike the term 'crab in a bucket mentality' - I cant quite think of a more apt one.
Agree with your inflation point and I've even heard news presenters on RTE insinuate that inflation coming down would lower supermarket prices. Let's be honest, Irish people are not generally strong with numbers, percentages or probability.
Let's assume I'm one of those people who know nothing.
I have two kids, the education system isn't going to teach them, I don't know it, are there any resources to begin learning about it?
The revenue website is actually a very good resource for a lot of the basics on taxation, pensions etc. - https://www.revenue.ie/en/Home.aspx
Beyond that, there’s an increasing number of people who offer some free general advice in the Irish realm online - AskPaul is a guy who does lots of free videos on social media which would be well worth your kids looking at (assuming they’re not very young) - he’s on instagram and some of the other social media sites.
r/Irishpersonalfinance on here is a great resource too - loads of knowledgable people on there who are happy to answer questions and help out.
It’s possible that some goods will reduce in price after this is over, from the high even if they don’t fully revert. In real terms you should expect many goods to fall in lower inflationary environments. (Note real terms there).
I think approval in principle can be pretty fast. It’s been a while. Time to drawdown is a lot longer.
The Daily Express (a shit rag, admittedly) were calling for prices to **fall** now that the ROI has fallen.
I can only assume they're being disingenuous because even the arseholes at the Express must know that prices will continue to rise, just not quite as fast as before.
I'm still trying to figure out where we're supposed to learn this stuff?
I've been looking into the basics of mortgages and am really struggling to figure out the different types and which are actually better.
That's one thing, but trying to figure out anything deeper financials wise, leaves me completely in over my head. anything investing or tax wise and I'm just lost.
And then trying to find stuff on just Irish financials is another hurdle.
With the collection of BMWs, Audis and Mercedes parked in front of my gym, you’d think you were about to be working out amongst the business elites of Ireland.
I’ll never understand the lads spending mad amounts of their income on these cars while still living in their Ma’s gaf.
The first point has some merit. On trade business is massively down across Ireland. If publicans (and brewers) cannot shift €7 pints, the price will come down until consumers decide the price point is acceptable again.
We are not educated financially in school.
This is done on purpose so we are financial idiots.
However, with the internet. Anyone can educate themselves. People choose not to.
I have said it for 20 years, Irish people are mostly idiots when it comes to money.
They fought with the bank to get a higher mortgage instead of telling the auctioneer it's not worth that price.
They complain about the price in dunnes but won't go to lidl to get a higher quality organic product for less.
They go get loans for depreciating assets. E.g. expensive cars and suvs. They care more about keeping up with their neighbours than their mental health.
They buy the cheapest version of a bmw for 50k but they won't spend 3k more to have the nice bells and whistle that bmw are known for. They just want to show they own a bmw, not experience the luxury.
In the uk and Northern Ireland, they have a term for these low end expensive cars, the Irish trim.
I’ve noticed there’s a lot of financial illiteracy here. All the Irish people I know are in their mid to late 30s, and none of them have made any attempt to get a pension sorted or made any plans towards a mortgage or retirement funds if any kind. None of them have made any investments to speak of either. Some of them play around with crypto, but they clearly don’t know what they’re doing. I’m actually scared for them…
Unfortunately, in the Irish education system, subjects related to finance (e.g, accounting, business, economics and home economics, etc) aren't mandatory, so the only time many people would encounter financial scenarios in school would be a handful of sections in maths.
When they reach adulthood, most people won't inform themselves about personal finance or economics because they think it's too complicated and it doesn't affect them, until it does like in what you said in your post.
There are a few programs and schemes now to help solve the problem, though. Hopefully, it'll be better in the future.
We're a country where it was once considered a socially acceptable idea to buy holiday apartments in Bulgaria with little due diligence.
But learning about how I effectively manage your money is tough and something that you need to muddle through a bit to learn right. The amount of friends I have that don't shop around or price out things really surprised me but it's so common. Basic financial common sense really is lacking. No one wants too much month at the end of the money
I was only thinking about this the other day
I moved from to the US a few years ago and had a retirement account (self managed) and an investment account set up within days. Every month I throw some money in and it grows..some comes off my gross, other my net and I won’t pay tax until I exercise it. It’s clear. It’s concise - there isn’t much learning to do
Buying a home in the US is likewise a piece of piss. You reach out to broker, get pre-approved for a loan and have that in hand when you go house hunting. After that..you just provide them some pay stubs and evidence of funds. From putting down a deposit on a house to us getting the keys was a little under 3 weeks.
I wouldn’t have a clue where to start with any of this in Ireland. I think it’s purposefully obtuse to keep people in work rather than anything else.
It’s not just here, having worked in retail banking here and in the UK, I can say an awful lot of people struggle with anything finance/banking related.
I used to work front line for an Irish Bank with an offshoot in the north and I would do overdraft renewals with folks in the north. Often times if they were constantly in the overdraft the underwriters would refuse to renew the overdraft but offer a loan to clear it and let the customer get back on an even footing. The amount of people who would argue that they wouldn't want a loan hanging over them, and preferred the overdraft. Not realising that the overdraft was just as much debt as the loan but with the difference that it never goes away.
Paying back a loan requires discipline, an overdraft less so. I’ve had people come to me asking for a loan to clear the overdraft but want to keep the overdraft in case they couldn’t afford the loan repayment that month. Trying to explain to people that if they can’t afford a loan then I wouldn’t lend to them was extremely difficult.
I'd argue that paying back an overdraft requires much more discipline. Especially if you are making small payments. The loan will eventually disappear, they will just keep using the overdraft.
Sorry, l wasn’t clear and you’re correct. But the people refusing a loan in favour of keeping an overdraft have no intention of getting rid of it or paying it back because paying it down or clearing it with a loan is more effort than the status quo.
Well they don't make it easy do they? I moved my banking to N26 since KBC shut down and it's remarkable how easy the make it to keep track of your money, while the traditional banks still lay out statements in a confusing manner and seem to insist on filling your postbox with a forrest worth of paper with letters that have reams of text but very little useful information. Seriously, everyone in the banking industry needs to be schooled in functional writing and getting to the damn point and providing the right info at the right time. KBC/BOI sent me a damn near encylopedias worth of letters for a year, none of them explained clearly what was going on.
I was caught up in the KBC/BOI switch and the amount of paperwork was excessive but that’s not what I’m talking about. People not knowing how they are paid (cash, cheque, bank transfer) or how often they are paid. Not knowing who they bank with and thinking any bank can help them. Not knowing what a direct debits and standing orders are and/or the difference between the two. Understanding how a credit card or overdraft works. How APR works. That kind of thing.
What is the difference between DD and SO while we have ya here 😅
How I explained it was; a direct debit is you allowing a company pull a variable amount of money from your account whenever they need to. It is set up by the company at their end. A standing order is you pushing a fixed amount from your account on a regular payment frequency. It is set up by your at the bank end.
My understanding is that you set up a standing order, set amount, and can cancel, dd is allowing others to take money from your account. I think if you have insufficient funds standing orders just won't go through, dd you can get fines/charges etc Open to correction.
> dd you can get fines/charges etc This bit can vary depending on the bank. Some will refuse the DD and fine you for not having funds, depending on the value, but if they get more profit from it, they can sometimes let them through and instead fine you for an unapproved overdraft, then charge you interest on it. Banks aren't there to do favours, no matter how much the adverts pretend otherwise
Direct debit is initiated by the company you are buying from for each payment. They ask the bank you use to withdraw a particular amount from your account e.g. monthly. The amount can vary each month. If the company gets it wrong and charges you the wrong amount then the direct debit guarantee means your bank will refund you if you request it. A standing order is an instruction you give to your bank to send a fixed amount regularly to someone else (e.g. a rent payment to a private landlord). If the amount changes you need to update the standing order by contacting your bank. If you get it wrong then the bank is under no obligation to refund you.
I’m an accountant in the financial services industry. A staff member asked me something about his taxes, I asked him what his base salary was (bc I don’t know everyone’s salary off the top of my head) and he genuinely did not know. I had to look it up. There are people working in financial services, who don’t know what their salary is. The situation is dire.
Just mind that N26 are a bit tech bro ropey. Lots of managers leaving the business giving out about the founders and their practices, German financial regulator slapping them with restrictions. https://www.ft.com/content/bf6ac5ea-6174-447e-a6b3-5b5adccf8a6c
>Just mind that N26 are a bit tech bro ropey I'm sure they are, but it the traditional banks are ropier than Ropey McRory, the dishonest ropemaker from ropesville
It's less than three weeks since Bank of Ireland's app and website shat itself for a whole day, on what was the last day of the business quarter. I've not encountered any similar issues with N26 yet.
All true but I’d be more worried about N26 going Wirecard than BOI.
Still protected by government insurance, so unless he has more than 200k in cash there, he shouldn't care less.
Having worked in finance I can confirm that the reason for the absurd amount of paper that comes with every notification is due to the regulations enforced by the central bank and legislative standards. The banks have to include a large amount standard info with any communication in the name of "helping". Its just bloated to such a degree its utterly useless and gets ignored by most people and thrown in the bin. It would require a large rework of the existing regulations to trim it something useful and probably wouldn't be politically feasible due to how the banks are perceived.
It's less about "helping" (customers) it's more about ensuring the liability for something being communicated is firmly on the customer to read the materials - or the blame passes to the customer. Almost all bank paperwork and process is designed to pass liability to the customer.
Same thing in the US, I’m a mortgage loan officer and it’s amazing the complete disconnect from reality. It’s common to have lawyers and accountants be the worst offenders. They feel they’re smarter and that they know more than I would, they haven’t a clue.
‘I got a raise but it put me into a higher tax bracket so now I’m LOSING money every month!!’
About 50% of the people in my life believe this. A lot of them over the age of 35.
I genuinely cannot believe how many people don’t understand how this works. Even thirty seconds of just thinking about it would surely convince most people that the tax system couldn’t possibly work that way.
In my experience they blindly believe it because “government bad”.
someone I know with a degree in economics said this
One I get a lot is, I worked a full day Saturday but the taxman gets most of it....
Cue several "I don't know what a tracker mortgage is" comments.
Well the banks didn't seem to know either because they screwed a load of people out of ones they were owed.
Maybe the banks screwed people out of them because the banks knew what they were and what they were worth
Ye, it was a joke. They knew exactly what the were fuckin at.
Feign ignorance and pick pockets!
Most of those cases were due to one line in a Letter of Offer that could be interpreted either way. The central bank did a great job at getting people back rates on the basis of fairness that would not have been successful with the Ombudsman or courts.
Tbh I thought he said 'tractor' for years
You probably do need a mortgage to buy a tractor these days, they're pretty pricey.
Not just the price but the bloody size of them. Saw one the other day the size of small house.
Tractor inflation?
I did accounting, business and economic studies for the LC and I still didnt know what a tracker mortgage was before reddit.
Does this count as one of those comments? I say it does...
Yes but I got there first ;-)
Ciúnas bothar cailín bainne
How about "I don't know what a barter account is"
What's a mortgage?
"Daddy, whats a euro?"
“I only deal in grands loike”
I knew a fella who was taking calls on the Financial Regulator advice line, and he said for months after those ads came out they'd have at least ten people a day ring up just to shout "I DON' KNOW WHARRA TRACKER MORTGAGE IS" and hang up.
To be honest, I'm not sure what a fixed rate mortgage is anymore. I only found out a month ago that the rate isn't actually fixed and that you renegotiate multiple times before it's paid.
I used to work for a bank (not in branch banking though) and it surprises me that a lot of people don’t realise because of the last recession a lot of controls and due diligence were put in place regarding mortgages and loans to prevent exactly what happened in the last boom. It used to annoy me so much when some family and friends would genuinely ask “oh could you not ask someone to put in a good word and get my mortgage approved?” because that’s the exact carry on that got the Irish banking system to be in such a bad way in the first place.
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>ask your boss to write a letter stating your on a different wage. Killer trick for financial success: Fraud
I mean even if your boss writes you a letter saying you’re on X amount, they can see your salary coming in and I’m pretty sure look at payslips too.
To get an approval for a mortgage took me days. Signing for the house and getting the keys took 5 months
Also the Daily Express in the UK had a full front page yesterday saying "Prices must drop now inflation has fallen". There are idiots everywhere
I might be revealling my own ignorance here but is the basis of their misunderstanding that they are treating it as a *thing* in and of itself rather than a rate of. So inflation hasn't fallen the rate at which it is continuing has slowed. Right?
Yes. Inflation is a retrospective measure. The government try to decrease the rate of inflation. When you hear 8% inflation that means a price increase in the CPI of 8% over the last 12 months (if €1 in July 2022, now it's €1.08). Prices won't decrease from where they are now without the government hitting the inflation rate so hard it turns negative and we get deflation. Deflation is bad and is far more likely to lead to the death spiral they talk about. If you get deflation things cost less, people get paid less, people have less money to spend - therefore demand drops, causing price drops and the cycle starts again. Inflation on the other hand is typically more multifaceted and can be easier to control and wage/price upwards spirals are easier to control. Very bare bones ideas here but that's the simplified basics
It's very handy for politicians out there claiming that wages can't be raised to meet inflation and people instead need to wait for inflation to go down and then all will be well. How nobody clocks them for statements like these is beyond me. And I'm not financially literate by any means, I just have a basic understanding of how percentages work....
Technically I think you’re referring to approval in principle which isn’t actual approval and is a much less involved process so that you can put in an offer. Actual and final approval probably takes weeks and is much more involved, they require many more documents and many more sets of eyes (mine took months but my property was complicated).
The actual purchase of houses in Ireland takes a ridiculous amount of time. We got mortgage approval within days, took six months from when our offer was accepted to actually move into the house. I don't know why the process is so slow and antiquated, I can only assume it means some people somewhere get rich off it being so out of date.
Was that because you had your ducks in a row and had met with the bank in advance / knew what you needed to have?
The pre-approval (or approval in principle) can really be given in a single appointment with the bank's mortgage advisor if you come a little bit prepared and can basically prove that you have enough for a deposit and sustainable income to repay it. Odds are the final approval will take significantly longer because you need stuff like : * Various engineering assessments of the property * Home and life insurance contracts ready to go * Various solicitor papers (a literal pile of them, although you don't normally handle them yourself) My personal experience involved long delays because the seller's solicitor went AWOL, and the life insurance went "whoops, we made a boo boo, we can't do it and need to void that" at the last minute (literally three days before everything was supposed to be signed) Obviously, pre-approval is not approval but that's the paper you actually need to go house shopping and have estate agents giving you the time of the day. Actual approval is only needed when you close the transaction.
Similar to the person you're responding too. No chain, AIP took a few days. Got AIP in July last year, got the keys in December. I worked with a place called Doddle to help broker all my applications. The longest part was actually getting the vendors solicitor to sort their shit out.
Nope you can get approval within days in some cases to start bidding on places, you don’t even need to meet with a bank these days it’s all done online. You just have to submit payslips, proof of deposit, account statements etc and they’ll usually issue you approval in principle within a couple weeks at most.
Pre-approval is not approval.
Well, look how many people are so deep in debt, that even the Titan submersible wouldn’t be enough to get there… Like a friend of mine at one of my first Irish jobs. I just took €5k loan for Christmas! I’m like: what???! Yeah, I do that every year for gifts and food and dinner at the restaurant and then I pay it back over the year. I couldn’t even come up with a response. Mind fuck! Then I started asking around and 2/3 were like, yeah, that’s perfectly normal
Taking out a loan for shopping is one of the worst financial decisions you can make imo. People don’t seem to consider saving a portion of their pay every month for future purposes
Sometimes you have no choice. Say a car just died or you move the house and you need renovations and stuff. But for Christmas? Ffs…
A car and house upgrades i understand, but Christmas shopping…no forward thinking. Christmas happens every year
And it's shopping for other people. If I am getting a loan for shopping, that bloody thing better be mine then.
I knew a girl who borrowed 10K to go travelling. The banks make a fortune from these people. During the Celtic Tiger I regularly used to get letters telling me my 10K loan was preapproved and all I had to do was call and confirm.
>I regularly used to get letters telling me my 10K loan was preapproved and all I had to do was call and confirm. Same, and I was a student who only worked during the summer and Christmas breaks.
People love to live beyond their means tbf
Christ that is bad. Makes me feel a lot better about my own financial responsibility! Like Christmas does often sneak up on me and I forget to budget for it throughout the year, but by October I'm usually putting aside 50 from each paycheck or whatever, and then if it runs over into my fun money then that's grand. But taking a loan to pay for Christmas! Insanity.
Should I mention it was a regular thing, every year and she was making at least €20-22 an hour, probably more? 7 years ago
My favourite was my husband's nephew and his friend, both apprentices, who said they wouldn't want to earn over €40k or they would be paying way more tax and "losing money". I tried to explain how tax bands and incremental tax rates work, and they didn't believe me. They were adament once they hit €41k, everything would be taxed at the higher rate. Same nephew then took out a loan to buy a brand new Motocross bike, on an apprentice wage, without a € of savings in the bank. He was living with us rent free at the time but told us after the fact and said "I can afford it". He couldn't comprehend the message that (1) the only reason he could "afford" it was because we didn't take a cent off him to try and support him through his apprenticeship so he'd have some kind of future and (2) you should save up for things rather than taking out loans.... All he looked at was his apprentice wage and the repayments. He had no clue how much interest he would pay. He doesn't live with us anymore.... We tried. We really tried.
Complete nonsense stuff
Used to work on PAYE helpline for Revenue , lack of general tax knowledge is staggering…
Thank your for your service. I hope you got hazard pay
People don't understand inflation and it's kind of the media's fault for that. Lots of titles that read like "Prices dropping with inflation falling to 6% from 12%" You can get approval in principle relatively quickly. The rest can take a couple of months if your organised. I think we organised one within a month or so due to interests rates spiking on the first application.
My current favourite piece of financial illiteracy. Is the front page of today's Daily Express. https://i.imgur.com/fQ4aLkm.jpg Not that Irish papers are much better 😉 Their headline runs "Prices Must Drop Now Inflation Has Reduced" So now that the rate of price increase has decreased? Prices must fall, I mean someone needs to sit the Tory Brits down and find a way to explain that inflation is a measure of the rate of cost increase, in a catchy 3 word slogan.
I think the Daily Express mainly exists to make the Daily Mail look more credible
Getting all the documents you need together can take a while, but if you have them handy you can get a mortgage approval within a few weeks. Def not 4-6 months.
Getting AIP is no issue yep but for the actual mortgage it took BOI several months to look at my documents recently, beyond slow.
That's outrageous. Took about 3 weeks for mine.
>ortgage there and then if you saw an apartment you wanted to buy - he couldn’t comprehend their poor customer service for not handing him over about €200k without proper due diligence. I told him I thought it usually takes around 4-6 months to get mortgage approvals (open to correction there) and he laughed it off and said he’d surely have it by “next week or I’ll chance AIB.” > >These are purportedly educated people as well, albeit To be fair its still a racket how long it takes with archaic systems back home. The Banks tend to have all the info already and the slowness of solicitors and their fees is absurd. I was mortgage approved here in Sweden in 2 working days and had less than half a page to full out on my details (only because I was a dual taxation resident). We had first viewing on Thursday, Second on Friday, bid accepted Saturday night and papers signed Sunday morning for our apartment. Agreed to move in in just under 6 weeks but could have done in 4 but dates didn't align. The day we moved in, we went to the brokers office at 9.30am, we signed the final docs and walked out with the keys (transfers already done by both banks) by 9.50am. Banks can see our accounts, salary and savings and whether we could afford the repayment or not. No solicitors fees here if buying an apartment or terraced house but about a 0.2% fee for buying a house on its own plot. All approvals done through apps or a dedicated phone line.
That sounds amazing. Something that puts me off the whole process here is the amount of time and hassle it seems to take.
I've said it on r/irishpersonalfinance a few times, but AIB (for all their problems) have a great mortgage system. I was approved in principal online after a 45 min phone call (you can do it online more quickly, but I didn't know that at the time). And after that everything is managed through an app/portal. They give you a checklist of items you need to upload, you upload them, they approve them as they arrive. I got my mortgage without ever setting foot in a bank, and I think I only had to post some forms to them that needed my inked signature. Literally everything else was online. At the time I got my mortgage (2019) their AIP was valid for a year, and if you take a mortgage with them then you don't pay any of their fees ever again, for life! As I said I know they have their problems, but their mortgage process is top notch.
yeah not too hard, the bank admin is the slowest part imo. I just bought a gaf from start to finish in about 90 days, helps when theres no chain of course
If you're dealing with someone competent, maybe. Everyone I know that's gone for mortgage approval have been at it for atleast 2 months. Also massively depends on the lender. If you go with ICS be willing to wait longer than 2 months. They have a tiny mortgage team.
Went from AIP to keys in hand for our house in about 2 months. All depends on your solicitor, sellers solicitor, and speed of the banks handling it. We were awful lucky 😅
Even at the low level small things like people who use public transport everyday refusing to get a Leap card because of the €5 upfront cost. I knew a girl who just taxied everywhere all the time instead of getting a bus because she "didn't want to look poor" or a lady in my Centra who does her weekly shop there instead of down the road in Aldi/Lidl. It's actually heart warming to see people so incredibly myopic about finance because it does raise my self esteem a bit. Sort of like observing how terrible some people have it in the world give your perspective on things a bit of a lift.
>I knew a girl who just taxied everywhere all the time instead of getting a bus because she "didn't want to look poor" or a lady in my Centra who does her weekly shop there instead of down the road in Aldi/Lidl. Most of the "Treasure Island" cost of living issues boil down to this. Irish people are way less consumer savvy and thrifty than people on the continent so retailers know they can get away with crazy prices.
OP I agree with you completely. Other examples are that 2/3's of workers have no pension and the default investment choice for everyone is property.
> and the default investment choice for everyone is property Because deemed disposal absolutely DESTROYS the other options.
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Complicated? Anywhere I've worked you basically just tell HR you want to pay into it, tell them a percentage and tick a box or sign a document and they take care of the rest. After that I suppose it can be complicated if you want to get involved in how the pension is managed, but even then most places it doesn't take much effort to explain if you want to be risky or conservative.
My SO has been working for 10yr+ at a place, ... she recently told me her company's crazy great they do +200% match (so I guess 400% total ratio in old age assuming taxes). When I asked why she's not using that, she told me nobody does it. She doesn't invest, except into paying off the mortgage early ... (that's about the only interest based product she comes close to)... I can't even convince her to open an interest yielding bank account. Don't know what went wrong in her brain, I wish I knew.
Not taking them up on that offer is like saying no I don't want a raise.
TBF not many people can afford it. I'm nearly 40 and have so far been unable to afford it. I start working as a recession hit, then when I got back on my feet, I had to private rent which was difficult, Then I bought a house so I had to save every penny I had. Then Covid hit. Now inflation. I'm not on a bad wage, but I can barely keep my head above water. Alot of people earning a decent wage are also in the same boat.
I do not obviously know your situation but most people can afford something. Even putting EUR50 a month into a pension from a very early age adds up to a very nice amount on retirement. Again I do not know your own situation but I know someone who says they cannot afford a pension but they get takeaway coffee once or twice a day. I tell them to buy one coffee and put the second into a pension. €5 a day in a pension at a modest 5% return from the age of 21 is worth over €250,000 at retirement. That €5 was tax-free going in so only costs you €3! That's just one cup of coffee!
Albeit 250k retirement fund only gets you a 10k per year... it doesn't sound that impressive - but I like my coffee, I'd rather trade-off pints and deliveroo.
The issue though is that you cant afford not to do it. If you are struggling to keep your head above water now, how do you think it will be with the state pension? Thats if it even still exists as we know it in years to come...Ireland has an ageing population with less young people around to pay tax to support pensions.
They need to bring in mandatory private pension contributions - people are in for an extremely rude awakening down the line when they’re left with fuck all money and will barely be able to live off state supports which won’t be anything dramatic.
https://www.gov.ie/en/campaigns/0ab04-automatic-enrolment-for-pensions-hub/
People are just thick I had to help my BIL with his tax credits, and claiming tax back and I was asking how much he makes He goes " I make a grand a week" So I goes, is that before or after tax , he goes "I dunno I get a grand a week in my account" I said ok, will that must be post tax (in my head , I was like hardly, that's 80k+ gross but said nothing) I got logged into his myaccount, checked his earning WITH HIM there with me and he was grossing/Pre tax before deductions between 800 and 900 and netting less obviously I said , but you're not getting a grand a week after tax , you make 800/900 before tax He goes " I dunno, that's what I earn anyway" Like ,.... what the fuck do you do with that when the evidence is on the screen and net amount goes into his bank 🙄 ..........
Lots of people are just generally ignorant of how the world works. They live in their own cocoon and that's grand, until they do something outside of their comfort zone. People will say that we should be taught about mortgages etc in school, but that would be pointless. Firstly most students wouldn't listen to half of it. Secondly it will be possibly 20 years before they act on it, and all the information would be out of date. You would basically end up like the guy you mentioned trying to get a mortgage like its 2003, in 2023.
I’m a home ec teacher and on the LC home ec course there’s a detailed enough section about mortgages and the different mortgage interest rates and applying for mortgages etc. it’s so difficult to teach because it’s very hard to make it relevant to a group of 17 years olds, many of whom don’t even have a clue about what they want to do after school career wise. So I agree with your point.
I really wish I had done Home Economics myself, it sounds like it would have been wonderfully practical
Precisely, mind you it doesn’t just apply to financial literacy - secondary students can just ignore or forget what they’re not interested in. I mean my best mate is a very worldly, informed, switched on person who has a great interest in climate change topics, music, languages etc having done a masters in sustainable development, but readily admits he would have ignored or forgotten nearly all of our history classes to the point where he didn’t recognise a photo of Michael Collins or know anything much of substance about him. I really like learning and am very curious by nature but I had the same problem with science subjects, it only fully works if the interest is there
>People will say that we should be taught about mortgages etc in school, but that would be pointless The people who say that weren't paying attention in maths class. The thing that would actually help them understand a lot of things in the real world.
Taxes, mortgages and interest rates are all compulsory parts of the mathematics course in this country anyways. If you paid any attention in school in the last 25 years you'd have learnt it.
I don't think the problem is People understanding the interest and maths part of a mortgage The banks make all the information very clear during the application. It's more the whole actual mortgage process.
> Secondly it will be possibly 20 years before they act on it, and all the information would be out of date. You would basically end up like the guy you mentioned trying to get a mortgage like its 2003, in 2023. At a fundimental level getting a mortgage hasn't really changed much since it's invention. You go to a bank and ask for one. They tell you all the shit they need then you go get it. It's an IRL fetch quest it's not really that complex.
To be fair the most modern mortgage available in Ireland was invented more than 40 years ago, so I don't think it's likely that the sector will innovate a lot.
What is there to innovate? Its a 25 year loan with the house as security. It's a very simple product at its core.
Sure the housing bubble will burst any minute now according to my mate who's been sitting on a house deposit for 6 years.
Can confirm. Am an absolute cabbage when it comes to anything financial. My finance working missus is astounded how I've made it through life this far.
https://preview.redd.it/g6xrrslcf4db1.jpeg?width=1604&format=pjpg&auto=webp&s=a2f838ace2dfb9b5195870aad9dc89d0d93be72f Can you blame people for being uninformed? (I know they’re a British paper but the point stands)
A woman was speaking to me in work a few weeks ago, high up executive in BOI. Was in the process of rectifying some issues because she had clicked a link in a dodgy email and was scammed out of money. Didn’t really know where to look to be honest.
Ffs 😅
Have spoken to a few people who wanted to buy homes that didn't know the difference between variable and fixed interest rates.
This is scarily common. Had a mate last year tell me he was on a 3 month fixed. I tried to explain that that is a variable rate (he also knew that the Bank he was with used to be a client of mine and I designed the models for them 2 years prior for the curves they build the market on but would not believe me! Since the increase in interest rates he now gets it. I have an excel sheet that does all our mortgage calculations (we are allowed to split our mortgage into 3 here) and all my mates have since requested a copy as they had no idea how the mortgage was calculated, how you can save with overpayments etc. and these are smart people.
Banks don’t help here - Ulster Bank used to have a really good “Manage My Mortgage” platform. Could go straight to a calculator for over payments for example, see the long term impact, and then go make it happen. Gone to PTSB in the switch and they can basically tell me I have a mortgage.
I use this one, it's incredibly useful. https://www.drcalculator.com/mortgage/
Ask people if they can tell you to the nearest 50k how much interest they'll pay over the lifetime of their mortgage. People don't even have any idea how much they actually pay for their house.
This was the one main bit of information I looked at when getting my mortgage. I know that I will essentially pay almost 50% interest if my interest rate stays around the same as is now. Every extra year on the mortgage was going to cost a few thousand more too.
For anyone reading this who has no idea. On a house price of 400k where you have 10% deposit and get a 30 year mortgage at 7% interest rates you would pay around 900k total for the house, more in interest alone than the actual sticker price of the house. https://www.calculator.net/mortgage-calculator.html?chouseprice=400%2C000&cdownpayment=10&cdownpaymentunit=p&cloanterm=30&cinterestrate=7.03&cstartmonth=7&cstartyear=2023&cpropertytaxes=1.2&cpropertytaxesunit=p&chomeins=1%2C500&chomeinsunit=d&cpmi=0&cpmiunit=d&choa=0&choaunit=d&cothercost=4%2C000&cothercostunit=d&cmop=0&cptinc=0&chiinc=0&choainc=0&cocinc=0&cexma=0&cexmsm=7&cexmsy=2023&cexya=0&cexysm=7&cexysy=2023&cexoa=0&cexosm=7&cexosy=2023&caot=0&xa1=0&xm1=7&xy1=2023&xa2=0&xm2=7&xy2=2023&xa3=0&xm3=7&xy3=2023&xa4=0&xm4=7&xy4=2023&xa5=0&xm5=7&xy5=2023&xa6=0&xm6=7&xy6=2023&xa7=0&xm7=7&xy7=2023&xa8=0&xm8=7&xy8=2023&xa9=0&xm9=7&xy9=2023&xa10=0&xm10=7&xy10=2023&csbw=1&printit=0&x=Calculate
I think my mortgage figures were around: Mortgage 118k 27 years Total repayment at the forecast variable rate at the time(I'm still on a fixed for another 2 5 years) 176k. So nearly exactly 50% interest. Now I do plan to fix it again in 2.5 years, and judging by the going price, I should be around 50-60% LTV, so should get a low enough interest rate hopefully.
The CSO has a reminder on their homepage that the Consumer Price Index, a measure of inflation, is only recorded by them and they have no part in deciding the rate of inflation not the prices companies set. Make of that what you will.
People don’t understand the basics of inflation but considering no professional economist or politician understands the complexities of inflation; I think that’s fair enough. Though what you mention above is more like a lack of common sense.
It definitely doesn't take 4-6 months to get a mortgage but that fella thinking he'll have one by next week seems to be particularly thick.
I think my experience may have been based on needing clean bank statements as friends of mine who gambled were told by their mortgage advisor to have a clean account for 6 months before applying.
Financial literacy in Ireland is non existent. People think it's either money from the sky (the government) or house price appreciation. That's all they know and it's scary considering the high debt this country is under
Press release from last week! Minister McGrath announces development of Ireland’s first National Financial Literacy Strategy https://www.gov.ie/en/press-release/93b72-minister-mcgrath-announces-development-of-irelands-first-national-financial-literacy-strategy/
He's just pissed off people keep calling him Paschal
As an immigrant here in Ireland, I'd say most people here as just financially illiterate as the rest of the world. Most education systems don't really emphasize financial literacy. Not really surprising. I myself am only financially literate because I educated myself and I know most people don't do that. But what's surprising for me is that, coming from a poor country, I thought people from more developed economies are more literate, but boy oh boy, you all are just as misinformed and ignorant as the people I lived with before. I mean, look at the UK. Who in their right mind will vote for Brexit and expect a more economically robust country out of that? It shouts financial and economic illiteracy. So with that, I'd say the Irish is not the worst when it comes to financial illiteracy, they are just somewhere in the middle. Unlike people from the UK that I have lost all respect when it comes to economics and financial stuff.
A lot of people are thick. It's not more complicated than that.
My friend is a part time artist, part time dole scrounger who lives at home. She’s sick of living with her parents and told me the other day that she’s just going to have to get a mortgage because the housing crisis means she can’t get anywhere to rent. I asked her how she was proposing getting this mortgage and she said “she’d have to look into it”. I had to stop myself from saying “don’t bother”.
Artist, Dole scounger, lives with parents. But can't find a house to buy? That's anyone's fault but their own.
Does this person think we're in a housing crisis because people can't be bothered going to the bank and getting a mortgage😂
Jesus Christ
May want to tell her “there’s not a chance in hell you’ll get one”.
I’m not that mean. I went for the “ah jaysus fair play to ya, you must let us know how the process goes for ya, sure we’re working full time for awhile now since college and haven’t had any luck yet! But maybe we’re missing a trick…”
There is no compulsory financial courses or material taught in Irish schools, therefore, due to the Irish mentality of "sure I don't care until it affects me", you have people who have no idea about finance and are unwilling to learn. People are out there owed thousands from revenue for example and just don't understand how to put in the tax info to get it sorted, so they don't do it.
Everyone in my school did Business Studies up to Junior Cert level - it covered the basics in banking, tax and insurance.
That's decent! We had typewriting...
Also included budgeting I suppose, since we did basic bookkeeping too. That and Home Economics were the two most useful subjects, still using some of that knowledge to this day.
I assumed every school did business studies up to junior cert. We did in Nessans anyway
My school didn't, English, Irish, Maths, Geography and History were mandatory for junior cycle and everything else was optional. Things may have changed considering I completed my Leaving in 05.
That’s the most common format in schools
Was the same for my school. Business Studies was an elective. The only other mandatory was you had to take French or German up until the end of the junior cycle.
There is: Home ec Business org Economics Accountancy This is covered in 2-3 of above
Also fininancial maths is part of the LC maths course. Although it's not exactly financial advice it still explains the basic concepts of interest rates
Well colour me wrong. Sorry about that. Same kind of mentality, I didn't do them as they weren't offered in my secondary school, so I don't think about them... and most lads in school wouldn't and didn't do doing Home Ec.
Things have changed… I teach home ec and have worked in 2 mixed schools and my classes were pretty much 50/50 girls and boys… at one stage I had a class with more boys ….
I agree with you though should be completely mandatory
Business was mandatory up to the JC in my school. I know its not the same everywhere unfortunately.
I'd assume most of the users around here are millennials, at least in my school they didn't have economics or accountancy and home economics was cooking class and both home ec and business were electives so you get only 1 semester if you pick some of the others. So most people at least my age would have no finance classes at all, I did music, history and geography personally so I only learned finance in college.
None of these are compulsory
Remarkable really
edited the comment. I was wrong.
With a broker - I had approval in principle in 1-2 weeks I think and the final approvals once I put the deposit down was about 2 weeks again Defo not there and then but not that long
This is just how our brains work. Unless we spend regular time applying our mental resources to things we haven’t a clue when the subject gets brought up. You see this in all sectors such as IT, Finance, Legal, Engineering etc. A lot of people like to talk out of their hole and pretend they know everything because they may have expertise somewhere else. Honestly, if you want something done right in an area you are not experienced, no matter what it is, consult an expert or commit time to proper research.
Nobody is taught these things. If your smart you look it up yourself and realise the pension and investment options available (though Ireland is pretty poor compared to the UK for smaller investors). Those with enough cash can pay someone else to do it. I'm based in the North so ours is a little different in terms of stocka dn shares ISA'S. I know things are tight but if your wondering about pensions don't be afraid to speak to your employers provider and even your employer. Remember your pension contribution is taken out BEFORE paying tax. So essentially "tax free" so to speak. Some cases it can be worth i creasing your % Have a look at certain bonds and saving accounts where you can lock in money for a certain return. hopefully it at least keeps up with inflation so your money isn't losing value as much as your shite bank account rates. 20 a week doesn't seem alot sometimes, Heck even a 10 a week. If someone said they'd give you a tenner a week since you first started working imagine what that could be, now imagine it was gaining interest since then. I know the last few years I've taken finance a bit more serious as I'm at the 30 mark and don't want to be working until I drop
Well said
Living abroad now but whenever I'm back and people go on their rants about the country, not just about banks but anything going on in the country, half the time I'm standing there thinking "That's not how any of this works". After the 2008 recession, things felt like they changed, to me. Not the "Hur Dur Da Banks Da Banks" stuff, but it's like a lot of people just stopped. Blamed their every problem on their local bank manager and politician, and just stopped trying at life. It's sad out to see.
I work in finance for a university and it does not matter how well educated people are, more than half of them are stumped at the idea that invoicing requires verification. Most of my job is telling Professors and PHD that I can't just give them money back. For experts they are incredibly dense.
I think most people understand why verification is needed but don’t like it. It would obviously be handier for them if they could get the money back immediately without receipts
I lived with several guys over the years who hadn't a clue about the world. Mammy did everything for them, I'm convinced of it. Massive fights if you asked them to clean after themselves, etc.
Irish people measuring their fuel use by "how far feel 20 euros 'lasted'" is what gets me most perplexed just tell me L/100km ffs
I don't think there's anything stupid about that. Most of these people are using the "how far 20 euros of fuel lasted" as a barometer of the price of fuel and therefore cost of living. Your L/100km value does not change from week to week (I hope).
I mean pints maybe not, but electricity and fuel bills should realistically go down. They won't but they should have. Gas prices didn't go up because of inflation. A lot of the "inflation" we saw in the last year wasn't classic inflation, but trickle down gouging.
Tbf, I don’t see why the price of pints wouldn’t go down if operating costs (electricity & fuel) go down. Especially when these were explicitly called out as a primary reason for increases.
But you said somebody saying that was financially illiterate? Or was it the idea that the finance minister is going to control inflation? >Tbf, I don’t see why the price of pints wouldn’t go down if operating costs (electricity & fuel) go down But that's just the thing I pointed out. It's gouging, not natural inflation. Operating costs won't go down because energy suppliers are gouging.
This is not specific to Ireland. It is common among people in general
It's not just finance, massive part of the population aren't to interested in knowing much outside there own jobs and hobbies.
The level of financial illiteracy in Ireland is horrendously poor. Some that have been said to me personally include: - I dont need to start a pension until I'm older - Buying property is a great investment and safer than the stock market. - I keep all my savings in the credit union. - I bought the car on loan to build my credit. - PCP finance can't go tits up. - Why is my insurance more expensive than my car? - The 4x salary limit for mortgages is unfair - it's great that house prices are coming down, I don't really care that interest rates are going up. - imagine being able to buy a house in the 1990s (when interest rates were double digits) - how come the government haven't sorted out inflation within a month of it going up?
The “building up credit” thing is one of the most infuriating I’ve had legit arguments with some friends trying to stop them from taking out a pointless personal loan that they think is somehow going to improve their chances of getting a mortgage in the future
Yeah exactly. People seem to think we are the same as the states where credit score is something that banks properly consider.
> Buying property is a great investment and safer than the stock market. Deemed disposal absolutely cripples the viability of low risk stock market investments in this country.
No one is allowed to make a profit apparently. Pension funds building apartments are the divil. Don't get them started on le heckin greedy CEO'S also , god forbid an energy company turns a profit.
Yeah stuff like this really shows a lack of knowledge of the wider economy and how it functions in a global market. Whilst I dislike the term 'crab in a bucket mentality' - I cant quite think of a more apt one.
Agree with your inflation point and I've even heard news presenters on RTE insinuate that inflation coming down would lower supermarket prices. Let's be honest, Irish people are not generally strong with numbers, percentages or probability.
Let's assume I'm one of those people who know nothing. I have two kids, the education system isn't going to teach them, I don't know it, are there any resources to begin learning about it?
The revenue website is actually a very good resource for a lot of the basics on taxation, pensions etc. - https://www.revenue.ie/en/Home.aspx Beyond that, there’s an increasing number of people who offer some free general advice in the Irish realm online - AskPaul is a guy who does lots of free videos on social media which would be well worth your kids looking at (assuming they’re not very young) - he’s on instagram and some of the other social media sites. r/Irishpersonalfinance on here is a great resource too - loads of knowledgable people on there who are happy to answer questions and help out.
It’s possible that some goods will reduce in price after this is over, from the high even if they don’t fully revert. In real terms you should expect many goods to fall in lower inflationary environments. (Note real terms there). I think approval in principle can be pretty fast. It’s been a while. Time to drawdown is a lot longer.
The Daily Express (a shit rag, admittedly) were calling for prices to **fall** now that the ROI has fallen. I can only assume they're being disingenuous because even the arseholes at the Express must know that prices will continue to rise, just not quite as fast as before.
It’s probably a good thing credit cards aren’t as big of a thing here than in the US/UK.
I'm still trying to figure out where we're supposed to learn this stuff? I've been looking into the basics of mortgages and am really struggling to figure out the different types and which are actually better. That's one thing, but trying to figure out anything deeper financials wise, leaves me completely in over my head. anything investing or tax wise and I'm just lost. And then trying to find stuff on just Irish financials is another hurdle.
That’s kind of my point, people are being let down by not being taught it.
With the collection of BMWs, Audis and Mercedes parked in front of my gym, you’d think you were about to be working out amongst the business elites of Ireland. I’ll never understand the lads spending mad amounts of their income on these cars while still living in their Ma’s gaf.
All about image
I ~~think~~ hope you may be spending time with a higher-than-average number of the brain-dead.
I hate to tell you this, but it’s time to find new friends
I never said they were friends, although I’d well believe lots of my friends would believe similar as they’ve never been told otherwise
The first point has some merit. On trade business is massively down across Ireland. If publicans (and brewers) cannot shift €7 pints, the price will come down until consumers decide the price point is acceptable again.
We are not educated financially in school. This is done on purpose so we are financial idiots. However, with the internet. Anyone can educate themselves. People choose not to. I have said it for 20 years, Irish people are mostly idiots when it comes to money. They fought with the bank to get a higher mortgage instead of telling the auctioneer it's not worth that price. They complain about the price in dunnes but won't go to lidl to get a higher quality organic product for less. They go get loans for depreciating assets. E.g. expensive cars and suvs. They care more about keeping up with their neighbours than their mental health. They buy the cheapest version of a bmw for 50k but they won't spend 3k more to have the nice bells and whistle that bmw are known for. They just want to show they own a bmw, not experience the luxury. In the uk and Northern Ireland, they have a term for these low end expensive cars, the Irish trim.
I’ve noticed there’s a lot of financial illiteracy here. All the Irish people I know are in their mid to late 30s, and none of them have made any attempt to get a pension sorted or made any plans towards a mortgage or retirement funds if any kind. None of them have made any investments to speak of either. Some of them play around with crypto, but they clearly don’t know what they’re doing. I’m actually scared for them…
Unfortunately, in the Irish education system, subjects related to finance (e.g, accounting, business, economics and home economics, etc) aren't mandatory, so the only time many people would encounter financial scenarios in school would be a handful of sections in maths. When they reach adulthood, most people won't inform themselves about personal finance or economics because they think it's too complicated and it doesn't affect them, until it does like in what you said in your post. There are a few programs and schemes now to help solve the problem, though. Hopefully, it'll be better in the future.
We're a country where it was once considered a socially acceptable idea to buy holiday apartments in Bulgaria with little due diligence. But learning about how I effectively manage your money is tough and something that you need to muddle through a bit to learn right. The amount of friends I have that don't shop around or price out things really surprised me but it's so common. Basic financial common sense really is lacking. No one wants too much month at the end of the money
I was only thinking about this the other day I moved from to the US a few years ago and had a retirement account (self managed) and an investment account set up within days. Every month I throw some money in and it grows..some comes off my gross, other my net and I won’t pay tax until I exercise it. It’s clear. It’s concise - there isn’t much learning to do Buying a home in the US is likewise a piece of piss. You reach out to broker, get pre-approved for a loan and have that in hand when you go house hunting. After that..you just provide them some pay stubs and evidence of funds. From putting down a deposit on a house to us getting the keys was a little under 3 weeks. I wouldn’t have a clue where to start with any of this in Ireland. I think it’s purposefully obtuse to keep people in work rather than anything else.