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Money guru Paul Merriman shares budgeting tips as cost of living bites

Leading guru predicts many people will have to take on a second job

Paul Merriman CEO of PAX Financial Planning and Founder of Pic Steve Humphreys 23rd November 2018

Eugene Masterson

A leading financial guru predicts many people will have to take on a second job to beat the rising cost of living.

Money expert Paul Merriman is also urging home owners who are on variable or tracker mortgages to take out fixed versions as he can see spiralling increases in rates coming down the line from July.

"The European Central Bank is likely to increase interest rates and that looks like it will be in July. That means mortgage holders are going to get hammered in the next year or two in particular," he explains.

"If the interest rates hikes don't work and inflation doesn't come down, they are going to have to keep increasing rates. If you think it's bad now, if we don't get a handle on inflation, it's going to get worse."

"Anyone on the property ladder should fix their mortgage for as long as possible because I think interest rates are going to rise dramatically. If they do rise dramatically people's mortgages are going to start at one level and probably get out of reach over a few years' time."

Paul, who built up his PAX company by giving advice on social media and now employs 58 people, charges €250 for each private financial consultation and has over 7,000 clients as well as over 100,000 followers on Instagram.

But the 40-year-old Dubliner has some free tips of how you can try and cut corners in a period of the worst inflation for 40 years.

Many people find it hard to pay off their credit card debt.

"Switch your credit card to An Post. An Post have zero per cent interest for 12 months, so switch your credit card to An Post and save that interest," he observes.

With house prices at their highest since the crash and many trapped in the extortionate rental sector and find it hard to save for a deposit to buy their own home, he suggests they may not need to take that route.

"If you just want to buy a new-build home for arguments sake, you get the Government's help-to-buy and that would be about 10pc of cost, they don't need to save up if they had been paying tax for the last five years. People think you still need to pay 10pc deposit, you don't. If you're going for a new build and if you've paid tax for the last five years you could potentially qualify for 10pc back from the Government, up to €30,000," he says.

"If you're trying to get out on the property ladder and you are renting it's very important to look at the help-to-buy, the Government's new proposed scheme where the Government takes a stake in the property for 20pc. There's also the local authority loan, which gives you slightly more than what a bank will give up, up to a maximum of €320,000, so there are various schemes available."

Paul, who is a father-of-three - twins, a boy and girl aged 17 and a five-year-old-boy - stresses there is no shame in taking out a second job.

"That's going to become more prevalent here, the way we are going. It's not nice. I'm not trying to say get up and go to work, or work harder and patronise. But if you have a house, you have children, you have income, you have commitment, you have mortgages, there are ways you can help yourself," he says.

Paul maintains there are various reasons for the vicious circle of inflation, such as the war in Ukraine, Brexit and Covid and the disruption of goods being transported all over the world.

"It's a scary time for people. I think it's a knife edge for the Government and the economy for the next 12 to 24 months if inflation doesn't actually go down," he admits.

"Either it comes down naturally or they try and bring it down by increasing interest rates, which is not good for the consumer, because mortgage wise it could be a disaster and potentially if it's increased on a monthly basis it will be a nightmare for people."

A recent survey he conducted showed 50pc of those he questioned say they will cut down on socialising if things get worse, which will have a detrimental knock-on effect on the hospitality sector and possibly more job losses.

He says anyone who does not have childcare or school commitments should look at properties to rent or buy outside Dublin if their job allows them.

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