# Finance Guidance Needed



## laura28 (6 Jan 2009)

Age: 28
Spouse’s/Partner's age: 31

Annual gross income from employment or profession: 38K
Annual gross income of spouse:33K

Type of employment: e.g. I am a civil servant, husband in the engineering sector. Made redundant late last year and in new employment now, more stable than prior but has taken a large pay cut. 

 Rough estimate of value of home : Paid €250k in 2006, worth approx €270 now – 2 bed apt. 
Amount outstanding on your mortgage: no idea. Have mortgage for €230k approx, paying €1k every month.

*What interest rate are you paying? Fixed till mid 2009 – 5.1%*
Other borrowings – car loans/personal loans etc
One total amalgamated loan of €15k. This was taken over 3 years (loan originally for €22k and currently at start of second year. Loan has arisen as a result of overspending on credit cards etc etc. Repayments are €700 per month.
I got rid of my card and we now have a joint card used for flight bookings etc and always paid off in full each month, used very rarely. No other loans or over drafts etc.

Savings and investments:
€7k in a Rabo account
Do you have a pension scheme? 
Yes – I have a Civil service pension. Hubby does not
Ages of children: None – but planning a family soon
Life insurance: just to cover house

*What specific question do you have or what issues are of concern to you?*
Basically I am looking for some suggestions on how to improve our suggestion. We got a huge shock when hubby lost his job last year and this ate into our savings. Only just recovering now. Would a good idea be to continue loan repayments and savings until mid 2009 and which stage we should have enough to clear the loan? Is it risky using all the savings in this way? The €700 we are re-paying every month is eating into our cash and I would love to save more than the €400 a month we currently save, esp with our plan to hopefully start a family.

Our other monthly outgoings are – 
€100 – Gym
€150 – VHI
€120 – Sky & Broadband
€100 – ESB & Gas
€100 – 2 x mobile phones
Annual Outgoings - 
€300 – Car Insurance
€350 – Car Tax
€350 – Home Insurance
€250 – Mortgage Insurance


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## deebnm (6 Jan 2009)

Cut out the gym - if ye are fitness people invest in a 2nd hand treadmill and rower and use from home!

Reduce sky and broadband to basic packages 

VHI seem's high 

Put your savings into clearing loan asap


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## laura28 (7 Jan 2009)

Thanks for that advise. 
Do you really think using all the savings to clear the loan is the best option? Are we not leaving ourselves open to risks with no savings?
I am just trying to determine if we are in a terrible position - should we have more savings etc?


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## SteveW9 (7 Jan 2009)

"Rough estimate of value of home : Paid €250k in 2006, worth approx €270 now – 2 bed apt."
If your appartment cost 250k in 2006 its definately not worth 270k now unfortunately more like 200k and thats if you were able to sell the thing.


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## PaddyW (7 Jan 2009)

Ok, this might be a bit out there, but bare with me. Take 4k from your savings and lump it off the loan. That leaves you 3k in reserve for emergencies. Now, instead of saving 400 per month, put that with the 700 repayment, so you'll be paying back 1100 per month and loan is clear in 10 months, after which you can start saving 1100 per month and building your savings back up in no time. I'm assuming with this that your loan is on a variable rate and will incur no penalties for paying early?


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## laura28 (7 Jan 2009)

PaddyW – you’re a genius! That’s exactly what I am going to do! We have a variable rate loan so thankfully no penalties incurred! I am just looking to get us debt free and not at risk with no savings ASAP! Thank you so much for your help.

SteveW9 – sorry to disappoint but you’re comments on the value of our apartment are untrue. We actually bought off plans for €250k in 2005, moved into the apt in 2007 at which point it was worth (I mean selling on the open market and in second phase) for €330 and has since fallen again to a value of €270k. Apartments have sold recently for this price in our development. Anyway we are not interested in selling at the moment so it’s not really of key importance – have to live somewhere!!!


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## PaddyW (7 Jan 2009)

I wouldn't say I'm a genius at all. Glad to help though. Be sure to let me know how you get on. Best of luck.


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## Bronte (8 Jan 2009)

You can also save an extra 100 (Gym) and 120 (Sky) a month.  Can you clarify the monthly figures you have given for the house and life insurance.  Also what interest rate is your loan at.  You should make out a calculation of what it will cost to have a child, medical bills, specialists, equipment and childcare.  Will you need to move house if you have children.


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## laura28 (8 Jan 2009)

Thanks again for all the help guys.
Bronte - i forgot to mention that we save an extra €200 per month for the annual bills. This is saved alongside the €400 proper savings and as an annual bill e.g. car tax etc comes through we take it from the €200's we are saving.
I know we could save a fortune by getting rid of gym and sky & broadband but we use all of these regularily and i guess i don't want to have to get rid unless we really have to. Does that make sense?
We have lived the good life for the last few years - lovely wedding, honeymoon, couple of holidays a year, designed clothes and are ready now to quit all that and focus on family life. I guess i want us in the best possible debt free with some savings situation on what we earn.
We live in a 2 bed apartment so have room (just) for one child. If we had another then we would need to move but at this point this is far down the line.
I did some re-search yesterday and am going to change health insurance - we are currently being ripped off!


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## PaddyW (8 Jan 2009)

I just discovered this morning that VHI has increased it's plan cover for me. I've cancelled and am changing too. Over a hundred euro saved.


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## laura28 (8 Jan 2009)

Ya - the flaming cheek of them!
Who are you changing to?


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## PaddyW (8 Jan 2009)

Changing to Hibernian, Laura.


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## mell61 (8 Jan 2009)

I'd definitively revisit the health expenses they do seem high for your age group, unless you have a specific need for health care.
The mobiles also lookk high to me, checkout your costs there, and review your actual calls, are you doing a lot of 'where are you', non-calls.   All you have to do is listen to the inane calls that you hear on the dart / luas / inshops to realise that mobiles are a license to print money!  
Reduce the sky to basic, drop films / sports... we dont' have either and don't miss them, you'll keep the Film 4 movies which are pretty good.   Sky is a like, not a must....  €20-30 a month off that is another €240-360 a year towards being debt free.
You've had a good few years, any chance you can ebay any of the tangibles you have left, be it the designer stuff, or stuff you bought and never used.   You'd be surprised how much you can find when you look, make some money off it...  It can go towards your debt.

Checkout the money manager free software, its downloadable off www.thezeal.com , I use it following a few recommendations from this site, and find it excellent.    It'll take a few hours to plug in all the info, but it gives you a good picture of where you are financially, and also makes you account for every penny/cent, so you can see how much you are actually spending on miscellaneous (coffee, papers, magazines, snacks).
Good luck


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## SteveW9 (14 Apr 2009)

laura28 said:


> PaddyW – you’re a genius! That’s exactly what I am going to do! We have a variable rate loan so thankfully no penalties incurred! I am just looking to get us debt free and not at risk with no savings ASAP! Thank you so much for your help.
> 
> SteveW9 – sorry to disappoint but you’re comments on the value of our apartment are untrue. We actually bought off plans for €250k in 2005, moved into the apt in 2007 at which point it was worth (I mean selling on the open market and in second phase) for €330 and has since fallen again to a value of €270k. Apartments have sold recently for this price in our development. Anyway we are not interested in selling at the moment so it’s not really of key importance – have to live somewhere!!!


 
Well if you bought it in 2005 for 250k its now worth 220k


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## covered (16 Apr 2009)

oo


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## covered (16 Apr 2009)

SteveW9 said:


> Well if you bought it in 2005 for 250k its now worth 220k


Steve

Did you read the rest of the OP's post regarding what similar properties have sold for recently??? Or do you have some agenda highlighting falling property prices???


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## Welfarite (16 Apr 2009)

covered said:


> Steve
> 
> Did you read the rest of the OP's post regarding what similar properties have sold for recently??? Or do you have some agenda highlighting falling property prices???


 

Agree, Covered! The value of the house is totally irrelevant to the post for help by the OP!


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## laura28 (17 Apr 2009)

I was just logging in to do an update on our finances at the moment but first i feel i need to address the doom monger's posts above on the value of our apartment. This individual seems to be getting a large sense of satisfaction in thinking that the value of our apartment has plummeted! God knows why - 
Apartment purchased for €247,500 off plans in 2005
Apartment completed 2007, 2nd phase and new apartments sold for €330.
Currently aparmtent the exact same as ours selling for €270,000.
Hopefully that clarifies matters and the relevance of this whole discussion appears to be limited when you consider my inital request fopr help. We will be staying where we are for the next couple of years and will assess the market again when and if we look to trade up!

So, since my initial post obviously things have changed somewhat. As a public sector worker (the spawn of satan according to some on here!) my disposable income as been impacted heavily by the various levies but we are still on course to have our loan cleared by the end of the year. We have moved from VHI to Avivas, reduced both our phone contracts and been availing of every bargain/discount available when making purchases. Our savings remain at €7,500, with the current balance of the loan at approx €12,000. Once the two are equal we will clear the loan and start re-saving. 

This year we are still going on a holiday (a week in Spain, cheap flights and staying for free in relative's apartment), going to x 3 weddings (same outfit for all and not staying in hotel where possible) and have even manages to squeeze in some shopping and mini breaks in Ireland (last minute cheap deals and shopping mainly on internet). We could be doing a lot more (cancel gym, Sky, Internet) but i am happy with the way we are trundling along through the troubles!!


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## kopq (17 Apr 2009)

Good for you OP. You're tackling your debt in a very sensible way without giving in to the pessimism some would have us wallowing in. Good luck.


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## Locke (17 Apr 2009)

Great to read a Post like this. Well done on managing your finances so well.


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## laura28 (17 Apr 2009)

Thanks guys!
Forgot to mention have been doing the obvious with regard to shopping around and so far have saved a fortune on apartment contents insurance and on car insurance - gives me a great sense of satisfaction!!
Also recently attended a Frock Swap event and got rid of some old clothes and picked a couple of second hand bits for myself.
I refuse to get down and depressed about the state of things. As a country we are doing a lot of "hating" at the moment - Guards, Teachers, Public Sector (me), politicians, developers, bankers...the list is endless. People (and i include the Poster who is adamant about the value of my apartment in this) seem to get a sick thrill from telling people how dire the situation is and i refuse to go under!!!


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