Free Money. Where do I sign?

One of the most common mistakes I see with my clients, friends and young professionals is refusing free money.

This can be due to laziness, ignorance or disbelief. There is such a thing as a free lunch and you shouldn’t refuse a genuine opportunity of getting something for nothing. This isn’t a trick or a scam, free money really does exist any many ignore it.

When assessing a person’s finances, one of the first steps is to look for the low hanging fruit and this is often refusing free money. For the purposes of this conversation, I am counting discounts, reliefs, benefits in kind and already-paid expenses as free money.
 
Types of Free Money:
Employer contributions to pension. I’ve met people not signed up for a company pension where the company contributes 12.5% of their salary. If your company contributes to a pension and you haven’t signed up, you are refusing a pay rise. This is the most common and largest impact mistake I see!

Employer matching contribution. When your employer will match or double your contribution up to a set level. Eg. You pay 4%, they pay 8% extra. Same logic as above, you are refusing a pay rise.

Pension tax relief. Most people will benefit from having a pension. The tax relief is generous and lowers your effective tax rate.

Growth on pensions. Pensions are so great you also don’t get taxed on the investment growth.

Tax incentivised investments. Some investments are tax incentivised. Eg. Prize bonds, State Savings, National Solidarity Bond, SSIA. The tax benefit improves your net return.

Employer death in service benefit. Although this doesn’t directly affect you, it could be the most altruistic act you ever do. With this, if you die, something will be left to your loved ones. It can be multiple of your income (standard is 4-8 times your income) or a lump sum like €200k. Many companies will pay for this benefit but you need to sign up. Not signing up leaves nothing. Signing up could mean your loved ones have financial support if you were to die suddenly. If you have children, you have a moral obligation to do this.

Employers paying for education. This can increase your employability, career progression and income.

Paid leave. If you are not taking this, you need to take a hard look at yourself.

Maternity/paternity leave/force majeure leave. Paid or unpaid time off when needed can be a priceless benefit.

Educational allowance after redundancy. Although nobody would refuse their redundancy payment, many will not avail of the additional benefits that go with it. As above, this can increase your employability, career progression and income.

Benefits from employer. Preferential loans at banks, housing at universities, food and drink in restaurants, housing in live-in roles (gate lodge, apartment manager), entertainment, childcare.

Tax credits and reliefs. Taking advantage of every tax credit and relief available can save you hundreds or thousands a year, depending on your situation.

Rent a room relief. Renting out a room in your home could earn you tax free income. This can be a significant help, especially in the early years of a mortgage.
 
If you have some free money available you have not taken advantage of, now is the time to act.