How to arrange finances to take unpaid maternity leave

E

eimsRV

Registered User
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Age: 30
Spouse’s/Partner's age: 32

Annual gross income from employment or profession: 47K - private sector.
Annual gross income of spouse: 36K - semi state body.

In general are you:
(a) spending more than you earn, or
(b) saving?

Rough estimate of value of home.
House – 330K.
Apartment – 200K.
Amount outstanding on your mortgage:
House – 280K.
Apartment – 130K.
What interest rate are you paying?
House – Fixed @ 5.1% for 5 years, 3.5yrs remaining of fix term.
Apartment – variable – unsure of rate but repayment is 750 per month.

Other borrowings – car loans/personal loans etc
Car Loan – 7K, 2 yrs remaining.
Personal Loan – 17K – 4 yrs remaining.
Credit union Loan - 8k - 1 yr remaining.
Owe a family member 2K.
Owe Solicitor fees of 2200.

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 5,000

Savings and investments:
4000 in credit union

Do you have a pension scheme?
Yes both do through work.

Do you own any investment or other property?
We live in my house, while the apartment is idle. Unable to rent out as it is an affordable housing property.

Ages of children: 3 months.

Life insurance:
Both have life assurance for mortgages.
We both have life insurance policies through work.

Other monthly outgoings:
Mortgage on house – 1230
Mortgage on apartment – 750
Sky – 26.
Broadband/Phone – 45.
Mobile phones - 40.
Groceries – 500.
ESB & Gas – 90.
Petrol/Car maintenance – 240.
Cigarettes – 250.
Life assurance Premium – 36.
Going out - 150.
Property management fees - 150per month.

house and car insurance are paid for the yr, but will both be due for renewal in December.


What specific question do you have or what issues are of concern to you?
I’m on paid maternity leave until the start of august. I’m receiving state maternity benefit plus my company is paying the balance so effectively I’m on full pay at the moment. As per Irish law I have the option of taking an additional 4 months unpaid maternity leave and we are trying to figure out how we can make this work for us.
I’ve contacted my mortgage company to take a payment holiday but this is not an option, although I can go on interest only for one year which would mean a reduction of about 250 a month.
I’ve spoken to the bank and they have said I could take a payment holiday on both loans.
We have already cut back on sky package and grocery bill.

I’m getting child benefit.

I’m wondering does it make sense for us to avail of the interest only on mortgage, and take a payment holiday on loans in the current climate so I can stay home with our daughter for an additional few months. As we are not married I understand my partner can’t avail of my tax credits? Would there be any additional benefit we may be entitled to?

Ideally we would rent out the apartment but it just isn’t an option. However we may be able to rent out one room which would generate about 400euro a month.
If i can take the unpaid leave it would mean we wouldn't be paying out on childcare during those months.

Can anyone see any other way we can make savings/adjust payments?

Thanks!!
Eims
 
Hi Eims.. I understand that you have a new baby and want to do everything you can to spend more time at home while s/he is young..

..but am I correct in thinking that there are 2 adults + 1 baby.. and that you have both a house & apt and 40K+ in debt.. and you want to stop earning an income for 4 months???

Why can you not move into the affordable apt and rent out the house? It makes no sense to leave it idle.. why not sell it? if you say it is worth 200K and you only have 130K as a mortgage?

you also need to look at the other threads on managing money.. 500 for groceries is crazy for a start.. and someone is bound to mention the cigs, petrol & going out money.. which should be significantly reduced

best of luck. I do hope you come up with a solution.
 
You really need to get rid of that apartment - how are you going to afford childcare once you do go back to work? It costs over €1k a month to have a baby in creche.

The apartment is costing you €900 a month for nothing in return.

Don't want to put a downer on your idea of taking unpaid leave - but I can;t see how unless you get rid of the apartment.
 
Thanks for the replies.
I guess we are reluctant to sell the apartment as it belongs to my bf and the house is mine. I think we need to sit down and discuss it. With the clawback though i don't think we'd make anything from it, but at least it wouldn't be costing anything either!
I realise the groceries are high, but 85euro is spent on premature baby formula and with another 30 or so on nappies a month it really adds up.
I have 6 weeks of holidays built up so it looks like it would be better to use this then take unpaid leave. I don't want us to start off next yr in a worse position!
 
You'll prob get a claw back on tax for your 6 month maternity if your company are paying your normal salary - as the stat maternity benefit is tax free - could end up with an extra month in pay. Check that out too when deciding when to go back.

Best of luck - its hard to leave them when they are young.
 
eimsRV said:
Thanks for the replies.
I guess we are reluctant to sell the apartment as it belongs to my bf and the house is mine. I think we need to sit down and discuss it. With the clawback though i don't think we'd make anything from it, but at least it wouldn't be costing anything either!
I realise the groceries are high, but 85euro is spent on premature baby formula and with another 30 or so on nappies a month it really adds up.
I have 6 weeks of holidays built up so it looks like it would be better to use this then take unpaid leave. I don't want us to start off next yr in a worse position!
Click to expand...

Hi,

If I could offer a different view, which might help to make a decision re the apartment.

If I were you I would be taking the view that by selling now, you might well be ''making'' on it. The 70k gap between the value of the apartment (are you sure it's worth 200k at the moment ?), and the 130k remaining, that gap is going to shrink.

Now, is the other half's job very secure ? If not, and you're forced into a sale further down the line, (hopefully never) you will be in a spot of bother - down an income and forced to realise a loss on the apartment. Maybe.

Perhaps you feel that the 400pm rent is easily do-able. Depends on your location I suppose. But out of that will have to come any repairs and replacements for white goods etc ? Load of hassle, in my opinion.

Not wishing to offend, but I would have had this discussion with partner way before now.

Is there any reason for him to hold onto it ? Are you both agreed that you don't know what to do, or are you clear in your mind that you want rid of it, but he won't budge ?

Don't answer that necessarily, I'm just posing the question - it might help to clarify your thoughts.

Other things -

Is the credit union loan outstanding 8k minus the 4k savings, or is it 12k ? Ideally you'd love to be shot of it in a year, but is a resetting of it possible ?

I'd ask a family member to hold off, if at all possible. Not easy I realise that.

Say no more about cigarettes... used to be a thirty a day man. I know that's not easy. It is an awful lot of money though.

Very best of luck to you.
 
eimsRV said:
With the clawback though i don't think we'd make anything from it, but at least it wouldn't be costing anything either!
Click to expand...
It's an affordable apartment, you're not meant to be making a killing on it. I agree with other posters, either sell the apartment or else live in it and rent out your house. It makes absolutely no sense having the apartment lying idle.
 
Kopq I never said anything about making a killing on it! Anyway both properties are affordable properties so we can't rent either out fully.
We've done some research on similar apartments in the area and they are for sale for between 290 and 400K so going to get an estate agent out to get a value on it and then make a decision if we should put it on the market at the moment.

Thanks.
 
I am not sure about the apartment situation - well not as sure as the others seem to be however i think you need to learn the big lesson of spending below what you earn because frankly these outgoings seem very odd:

Groceries – 500 - hit Aldi and get the staples and if your baby is on bottles maybe a trip to the north for a stack of milk (and nappies i hear) might be worth it.
Cigarettes – 250 - no-brainer
Going out - 150. - this includes a babysitter? seems low for a month if you go out to dinner perhaps
Property management fees - 150per month. - the property is idle, why pay them?

I would say the time is very precious so do your best to rent out the room for 400 take break from loans etc and stay home with baby. but you can only do this if you take a good look at the spending now (i mean the groceries for example) so as well as getting the money saving info from MABS i also advise you to download recipe book from MABS site so you can start cooking on the cheap. Pretend like the child benefit does not exist and let that be your wiggle room/ contingency.
i would also pay the solicitor and family member out of your savings and start again., but some might say that was risky.
 
Hi Eims,

Firstly congrats on your new addition. I took three months unpaid Maternity Leave last year at the end of my paid Leave and like you, my employer topped up my salary so I was on full pay for the 26 weeks. Could you contact the Salaries Dept. in your work and ask if it is possible to arrange your salary to be spread over the rest of your Maternity Leave including the months you would due to be unpaid? That way you would be getting less money every month but you would still get something the months you would be on unpaid.

I ended up taking 3 months unpaid leave and using 4 weeks Annual Leave so I was off for 10 months altogether. I too took a 3 month break from a personal loan which gave us great breathing space.

You might also be entitled to tax back, depending on how you receive your Maternity Benefit (i.e. do you get it directly or is it paid to your employer). If you are due tax back, you will get this at the end of your paid ML.

Best of luck with whatever you decide. It sounds cheesy but you'll never get the time back to spend with your little one as they grow up so fast so any sacrifice financially will be worth it.
 
Thanks for the help and congrats.

Penny, I've downloaded the mabs recipe book. thanks didnt know it existed! I've popped up north once to get formula and nappies, need to make another trip soon.

Anniec thats a good idea about spreading my pay over all the months. I checked with payroll and they said they can do that but first i have to let Hr know how much unpaid leave I'm taking.

Got some good post today for a change. I'm sent off my med1 for 07 & 08 and I'm getting 4K back. So planning on paying off solicitor debt and putting rest off credit card. Helps a bit!

Thanks to everyone :)
 
from my own experience do the Med 1 on paper, as online my husband is still waiting.
Good luck with the new edition and remember to take photos and enjoy the time when you take it!
 
@pennypitstop.... we had the same problem with the Med1 online.. and apparently online you dont get your refund unless you request a P21 balancing statement.. worth checking if your husband has done this

apologies for the off-topic
 
Congrats on the baby. I'm only back myself from Maternity leave:(.I should say when I found out I was preggars I saved like mad so when I was on leave and recieve the benefits I just put them away until my unpaid maternity leaved kicked in. I did too reduced all my debts to bare minimums so I was was unable to save for about 2months.Hope this helps. Enjoy the baby.
 
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