In Ireland, we’re no strangers to economic ups and downs. From the property boom — and bust — and the recent inflation surge, we’ve seen how financial plans can go off track.
Even the best-laid financial plans can hit a bump in the road. Hot investment ideas can cool off. Pay rises may not keep pace with inflation. And unexpected costs can knock you back.
The reality is that financial success isn’t just about chasing returns — it’s about protecting the downside too. If Plan A doesn’t quite go your way, what’s in your financial Plan B?
At Moneycube, we think resilience is as important as growth when it comes to your finances. So here are six practical ways to shore up your financial foundations, and ensure you’re in a strong position — whatever the markets, economy or life itself throws your way.
1. Never bet the farm
We all like to believe in our convictions. Maybe you’re bullish on tech stocks, property, or a particular fund manager. But concentration risk — putting too much into one asset class, region, or theme — is a common pitfall.
Even if your investment thesis is solid, unforeseen events can derail it. That’s why spreading your risk across sectors, geographies, and asset types is essential.
In Ireland, particular care is needed for some workers in the tech and pharma industries. If your employment is tech or pharma, you likely hold stock options in the company you work for, and pensions and investments which are also heavily oriented towards these industries. It could be too much exposure to a narrow investment theme.
If that sounds like you, it’s worth considering the risk that all the pillars of your wealth could get hit at once, and how you can diversify.
2. Invest in less correlated assets
One way to protect your downside is to diversify into assets that don’t move in lockstep with the stock market. These are known as non-correlated or alternative assets — and they can play a valuable role in cushioning your portfolio.
Think commodities like gold, infrastructure investments, or even certain types of real estate and hedge funds. In recent years, digital assets have also gained attention, although they come with their own risk profile.
The idea isn’t to abandon traditional investments — but to mix in alternatives that can perform differently in varied economic conditions. It’s a classic Plan B move.
3. Cover the big risks: life assurance and income protection
Financial resilience also means protecting what matters most: your health, your income, and your family.
If you have dependents, life assurance ensures they’re looked after should the worst happen. And income protection policies can replace a portion of your earnings if illness or injury prevents you from working for a sustained period.
It’s worth noting that income protection premiums often qualify for tax relief, making it a more affordable safeguard than many people realise.
These kinds of policies aren’t just about peace of mind — they’re part of a properly diversified financial strategy.
4. Operate a surplus, not a deficit
Consistently spending less than you earn is the bedrock of financial stability. A surplus each month gives you the freedom to invest, pay down debt, or build that emergency fund.
Building a regular saving habit, reviewing recurring expenses, and increasing income where possible (even marginally) all contribute to moving from reactive to proactive with your money.
5. Have a plan to pay down debt
Debt can magnify gains — but it can just as easily amplify losses. That’s why a smart financial Plan B includes a strategy for reducing what you owe.
There are certainly assets which it’s worth borrowing for (above all the property you want to live in). But debt needs to be at a manageable level, and paid off eventually. Managing your debt doesn’t just save money on interest — it also boosts your financial flexibility and gives you more options when things don’t go to plan.
6. Build (and maintain) an emergency fund
An emergency fund is your financial shock absorber. It gives you breathing space if your income takes a hit or you face an unexpected expense, like a car breakdown or medical bill.
How much is enough? A good rule of thumb is to aim for three to six months’ worth of essential outgoings. This fund should be in cash and kept separate from your investment portfolio.
Having a solid emergency fund can stop short-term problems from becoming long-term setbacks.
Financial progress isn’t always a straight line. Markets wobble, jobs change, and life throws curveballs. But with a strong Plan B, you can protect what you’ve built and withstand setbacks in Plan A.
Need help putting that safety net in place? Talk to Moneycube today — and let’s build a financial plan that works in real life, not just on paper.
