Worries about money are the single biggest cause of anxiety for people today. A third of all Irish adults say they have no savings, almost a half of us have no retirement savings. [1,2,3]
It doesn’t have to be this way. Our team of financial experts at moneysherpa, the Irish money guide, have developed a straightforward system to help you get money worry free. The sherpa’s 6 steps.
Step 4 – Reach your ‘rainy day’ goal
Step 5 – Reach your ‘play day’ goal
Step 6 – Reaching your ‘sunny day’ goal & money zen
With the sherpa’s 6 steps we will get you on the right path to money zen. This means being able to afford what you need, having rainy day fund for emergencies and enough stashed away for retirement.
Which = no money worries.
Step 1 – The Irish money guide to picking your goals
Think about what might lie in your future that you need to set money aside for.
It might be a trip to the Bahamas, university for your kids, a dream wedding or a ‘forever’ home. Whatever these things are, list them out. Put them in order and put a money number on each, don’t over think it, a rough idea is fine.
This is your ‘sunny day’ goal, if you’re paying attention you may have already have guessed what’s coming next.
To banish those money worries you also need a ‘rainy day’ goal. This is a cash stash to help you deal with any unexpected financial downpours.
Finally you need to set your ‘play day’ goal. That’s how much you need to have a retirement that’s no work and all play.
These three goals are what achieving money zen means for you. Your personal money Everest.
You can make it to the top, with your own Irish money guide helping you at every step.
Step 2 – The Irish money guide to getting money fit
Congratulations, you’ve already done what the majority never do. You have picked your ‘mountain’. Let’s crack on helping you climb it.
Before we start climbing we need to get money fit.
This means getting more money in and letting less money out.
Getting more money in
There are more moves here than you might think.
As well as your main gig, have you thought about a side hustle? This can be doubly smart, as well as increasing your earning power, you can learn new skills and open up new career opportunities. There are a lot of online platforms such as upwork that make earning on the side easier than ever.
Finally, don’t forget to make sure you get all the tax reliefs you are entitled to. The average cash back on an Irish tax return is just under €1K. 
Letting less money out
There are just two ways to spend less, buy less and buy for less. To buy less, you simply have to reduce what you use. To buy for less, you need to shop around.
Check our Irish money guide 10 top money saving expert tips, which tells you how to save over €12,000 a year, even if you are on an average wage.
Step 3 – The Irish money guide to becoming debt free
Now we are money fit we should have more coming in than going out. Great, but before we start climbing our savings mountain, we need to get to our basecamp where we’re not ‘underwater’ with debt.
If you have no high interest debt, congratulations you are already there. Progress to step 4 of our programme, but if you have any personal loans, pay day loans or leave anything on your credit card at the end of the month, read on.
Saving whilst still having high interest debt is like climbing a mountain with a dead sheep on your back. Exhausting, uncomfortable and irritating, although hopefully a little less smelly. The first thing we need to do is ditch the debt and get that weight off your shoulders.
By taking the monthly surplus from step 2, we can start to pay down the debt. Start with the highest interest first, usually your credit cards. Starting with the highest interest debt first, creates a ‘snowball effect’ where you can use the interest rate payments saved to pay off the next highest rate of debt and so on.
Step 4 – The Irish money guide to ‘rainy day’ saving
So your fit, at basecamp and ready to climb, let’s go get our rainy day goal.
The sherpa recommends having at least three months of your net income tucked away for a rainy day. That way you can pay the rent and bills for a few months even if your income if cut short. Depending on how secure and zen like you want to feel, you might even make it six months.
Put this money away in a separate savings account that’s covered under the deposit guarantee scheme. It will get a lousy rate of return, but this is your emergency fund so we want to take no risks with it. The Irish scheme guarantees deposits up to €100K for each bank or credit union you have, EU banks have similar schemes, but you will have to check the rules for each state. 
Set up an automated transfer to move your savings each month from your current account to your rainy day fund. Keep saving this way until you have reached your goal and then move onto step 5.
Step 5 – The Irish money guide to ‘play day’ saving
Next up is having enough set aside for an active retirement, your ‘play day goal’.
This maybe surprising, but this is where the tax man helps you ‘level up’. Giving you back the tax you would have paid on your salary for every euro you save for your retirement.
If you are under 30, up to 15% of your income can be saved tax free. This gradually increases as you age, until you can save up to 40% of your income tax free at 60 or over. 
So if your income is taxed at 40%, every €1 of take home pay put into retirement savings is boosted to €1.67. This tax free boost makes savings via a pension a no brainer. Even if you just held cash in your pension, the tax benefit alone makes it a smart move.
With improved wellness and life expectancy, 65 is the new 45. Assuming you want to kick up your heels a little and do more than watch day time television, you need to put by around 15% of your income each year into a pension.
What you need to put by will depend on exactly how much working and how much playing you intend to do. If your plan is to retire to a mansion in Mayo and take up fly fishing, then you might need to up the 15%. If you want to keep your hand in at work past 65, you might need less.
For your play day goal you are saving over a long period, so there are lots of investment options from low risk to higher risk that should offer attractive growth. To set up a pension and work out what approach would best work for you, it usually makes sense talk to a qualified financial advisor. You can check out our recommended pension financial advisors near you here.
Step 6 – The Irish money guide to the final ascent
Congratulations! You are money fit, debt free and with emergencies and retirement sorted, money worry free.
Time to push for the summit, total money zen.
With your rainy day fund and play day fund already in place, you can use any remaining surplus for the final ascent.
How you use that surplus will depending on the size and timing of your Sunny day goal. If it’s a short term or small goal then popping it into a savings account might make perfect sense even though you will earn very little interest.
However, if it is a longer term goal like saving for your kids financial security it probably makes sense to invest to grow your money. You need to do this to combat inflation, the rate of reduction of how much you can actually purchase per euro.
You probably need to get a return of over 3% a year if you don’t want to lose money in real terms. As with a pension, the return will vary depending on the risk you are willing to take.
At this point you will need to consider investing to get returns. This usually means buying things that usually appreciate in value, known as ‘assets’. Investment assets include gold, bonds, shares and even rare collectables. Who knew a mountain of Grateful Dead t-shirts would end up being part of your financial strategy.
You probably need to buy a basket of different things to spread the risk, known as a ‘diversified investment portfolio’. There are lots of new digital platforms that now let you do this yourself. These platforms are attractive, because they don’t eat up much of your return in fees.
You may however simply want set your goals and appetite for risk, agree a plan with a financial advisor and let them manage the buying and selling of assets for you. The advisor usually charges around 1% of your fund per year, which if you are getting a return north of 5% or so might make sense due to the lower hassle factor. You can check out our recommended investment financial advisors near you here.
The Irish money guide to what’s next?
So you are at the summit of your own personal money Everest. You have achieved money zen. The feeling of having no money worries, with a huge sense of personal achievement and with the world at your feet.
To help you follow the sherpa’s 6 steps and reach money zen we have created a range of Irish money guide resources and tools.
You can check out our savings calculator here.
You can check out our money saving tips and tricks here.
You can check out our comparison of the best mortgage products here.
and you can check out our recommended financial advisors for pensions and investments near you here.
Good luck on your journey to money zen!
Moneysherpa – the Irish money guide.