Mid 40's with 3 young kids seeking financial advice for the future.

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Pablo74

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Age: Mid 40's
Spouse’s/Partner's age: Spouse is also in her mid 40's

Annual gross income from employment or profession: €32,500
Annual gross income of spouse: €20,000

Monthly take-home pay €3,627

Type of employment: both work in the private sector- I am full time and spouse is part-time.

In general are you:
(a) spending more than you earn, or
(b) saving? We are saving €400 per month.

Rough estimate of value of home: €350,000
Amount outstanding on your mortgage: €52,000
What interest rate are you paying? AIB tracker 0.6%
Mortgage repayments are €480.00 per month. About 9 years left.

Second property: Spouse is Co-Owner of an apartment.
Mortgage is €213,000 - Rate 1.250%
Value of apartment - €240,000
Rental figures cover mortgage and property management fees on a yearly basis.
Thoughts are to sell this apartment in the next few years.

Other borrowings – car loans/personal loans etc: Car loan €13,000

Do you pay off your full credit card balance each month? no
If not, what is the balance on your credit card? €480

Savings and investments: €55,000 savings
€45,000 was an inheritance.

Do you have a pension scheme? no

Do you own any investment or other property? Co-owner in apartment

Ages of children: 7, 4, 4

Life insurance: none

What specific question do you have or what issues are of concern to you? We would like to know what is the best way forward with 3 young kids, €50,000 sitting in the current account and €5,000 in the credit union. Do we set up a pension scheme, put away a little for the kids future every week. Who would be best to do it with? We really don't have a scooby doo. Thank you.
 
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First thing I would do is clear the car loan, I assume you paying a pretty high interest rate? Clear the credit card also. I wouldn't not touch or overpay the mortgage as 0.6% is almost like free money.

Decide on a rainy day fund which you are comfortable with. As a civil servant you would assume that at least one income is secure. How secure is the self employed person? Only you can answer that.

It would be prudent to set up a pension and avail of the generous tax break. I would assume by the time your kids reach college etc that your mortgage will be repaid so you can use the mortgage payment to fund college fees etc. You might want to provide more detail around your mortgage repayments. This is back of envelope stuff, the guys on this forum are far more knowledgeable than me on these type of subjects but this is my two cents.
 
You mention that you are a co-owner in an apartment. Do you view this investment as a form of pension provision or are you an accidental landlord? It may be useful to provide details such as your % share, the current market value and any debt on the property and your plans for this property for the medium term.

Also, do any of your employers offer a contribution towards a pension as a % of salary?

This could help inform the quality of the advice AAM will provide to you.

I'd be starting with clearing the non-mortgage debt and also looking at the life insurance situation before looking at the pension. As the higher earner, is there any element of provision for your family in the event of your loss of income in the (hopefully very unlikely) event of your death etc? Does your employer provide a lump sum on death or critical illness cover etc?
 
Thank you for your reply imalwayshappy, - Apologies as I forgot to delete the examples from the "Types of employments" section.
We work both in the public sector. I work full time and my wife is part-time by choice (young children).
 
Yes, crazy having those savings when having debt at same time. You don't need 55k as a rainy day buffer, at a very minimum clear car loan and credit card.
You are in a v strong position overall financially (300k equity in home plus good savings and share on other property) . Were you on higher salary at some point or extremely prudent with your money? This matters as it will influence advice given here
 
Pablo74 said:
Thank you for your reply imalwayshappy, - Apologies as I forgot to delete the examples from the "Types of employments" section.
We work both in the public sector. I work full time and my wife is part-time by choice (young children).
Click to expand...
Then you are both in a pension scheme (a very good one!) so you need to update that also
 
It would be helpful to know if there's any mortgage associated with the apartment.

Is that a rental property? If so, could give us an idea of the monthly rental income and what share goes to you.

Are you sure your employer does not have a pension scheme? That would be very unusual for a public sector employer.
 
Pablo74 said:
Thank you for your reply imalwayshappy, - Apologies as I forgot to delete the examples from the "Types of employments" section.
We work both in the public sector. I work full time and my wife is part-time by choice (young children).
Click to expand...

Good stuff, I would edit you initial post above to reflect this and add in your monthly mortgage repayments etc. People would draft their responses based on what they read in your initial post. ;)
 
imalwayshappy said:
Good stuff, I would edit you initial post above to reflect this and add in your monthly mortgage repayments etc. People would draft their responses based on what they read in your initial post. ;)
Click to expand...
Perfect, I have updated and added my mortgage repayments
 
AAAContributor said:
You mention that you are a co-owner in an apartment. Do you view this investment as a form of pension provision or are you an accidental landlord? It may be useful to provide details such as your % share, the current market value and any debt on the property and your plans for this property for the medium term.
Click to expand...
Hi AAAContributor, Accident landlord as it was my wife are her friend bought it 12 years ago. Little or no equity if it was sold. It is rented at the moment so paying for itself.

Also, do any of your employers offer a contribution towards a pension as a % of salary?
Click to expand...
yes, my wife currently has a pension set up. I am not too sure my employers do... I will find out,

Does your employer provide a lump sum on death or critical illness cover etc?
Click to expand...
I will look into this also
Thank you.
 
Pablo74 said:
Age: Mid 40's
Spouse’s/Partner's age: My wife is also in her mid 40's

Annual gross income from employment or profession: €32,500
Annual gross income of spouse: €20,000

Monthly take-home pay €3,627

Type of employment: both work in the public sector- I am full time and my wife is part-time.

In general are you:
(a) spending more than you earn, or
(b) saving? We are saving €400 per month.

Rough estimate of value of home: €350,000
Amount outstanding on your mortgage: €52,000

What interest rate are you paying? AIB tracker 0.6%
Mortgage repayments are €480.00 per month. About 9 years left.

Other borrowings – car loans/personal loans etc: Car loan €13,000

Do you pay off your full credit card balance each month? no
If not, what is the balance on your credit card? €480

Savings and investments: €55,000 savings

Do you have a pension scheme? no

Do you own any investment or other property? Co-owner in apartment

Ages of children: 7, 4, 4

Life insurance: none


What specific question do you have or what issues are of concern to you? We would like to know what is the best way forward with 3 young kids, €50,000 sitting in the current account and €5,000 in the credit union. Do we set up a pension scheme, put away a little for the kids future every week. Who would be best to do it with? We really don't have a scooby doo. Thank you.
Click to expand...
Sarenco said:
It would be helpful to know if there's any mortgage associated with the apartment.

Is that a rental property? If so, could give us an idea of the monthly rental income and what share goes to you.

Are you sure your employer does not have a pension scheme? That would be very unusual for a public sector employer.
Click to expand...

Hi Sarenco,
I have made a few mistakes which I am editing at the moment. My wife and I both work in the private sector. Not sure what I was thinking earlier when i typed this. I will update with the apartment details shortly. Thanks for your help also.
 
Type of employment: both work in the private sector- I am full time and spouse is part-time.

Sorry I'm a bit confused, so you don't work in the Civil Service, you are both private sector employees?
 
A few quick points:

Clear the CC debt straight away.
Clear the car loan.

Buy life insurance, as you have a spouse and three children.

I would start there.


Then, start a pension, unless you have work pensions.

Next, I would consider income protection policy.
 
I would fully agree with @Protocol's list of priorities.

Come back to us if your employer does not offer a pension scheme and we can make some suggestions on how to get started.
 
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