# Advice Required



## cully (20 Nov 2007)

Age: 31
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 65,000 + 10-20% Bonus
Annual gross income spouse: 52,000 + 10% Bonus

Type of employment: e.g. Different Companies in Private Sector

Expenditure pattern: In general are you spending more than you earn or are you saving? Savers usually

Rough estimate of value of home: 400,000
Mortgage on home: 375,000
Mortgage providerTSB
Type of mortgage: 30 year annuity - Fixed Rate 4.54% ends Nov 2008

Other borrowings – car loans - 6 payments of €390 left on my own. Partners car paid off

Do you pay off your full credit card balance each month? Usually
If not, what is the balance on your credit card? 

Savings and investments:Me - 15000 in PIP , her - 10,000 savings

Do you have a pension scheme? Yes-both on DB contributing 5%

Do you own any investment or other property? No

Ages of children: None

Life insurance: Life assurance policies relating to Joint Mortgage

Incoming:
Approx 6200 per month


Outgoings:
Mortgage - 1549 pm after Interest Relief
Car Loan - 390pm - 6 months left
Sky - 50pm
Phone & BBand - 55pm
Gas - 60pm approx
ESB - 50pm approx
House Insurance - 37 pm
Life Assurance - 121pm
Petrol - 400pm - both have approx 50 mile commute each day
Charity - 20pm
Food/Entertainment - varies hugely


We purchased our house last year and Stamp Duty (25k - whn FTB still had the pay) and deposit on house cleaned out most savings. We are getting married early next year, and even though most is paid for already, we will still end up using approx 10k of our savings leaving just 15k (and less if ISEQ doesnt pick up) in savings. - I guess we will get presents at Wedding but dont know what..

Even though financially we seem ok, i am terrified of what would happen if we had a kid in the next year or two. Dont know if I could meet all outgoings on my own and pay for baby and wife. What entitlements would my fiancee/wife be entitled to from the state as a mother? I know her company have a decent parental leave scheme but it doesnt last forever.
Would like to know if others think I am panicking unnecessarily 

Any advice welcome

Thanks,
Cully


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## apple1 (21 Nov 2007)

Cully,

I think you're in an envious position.  Your own salary is very healthy, you have some level of savings, short term loans are virtually cleared & presents you'll receive at the wedding (given you own your own place already) will probably cover the costs of the day & more (that was my experience).  I don't think you should fret too much.  I am on a smaller salary than you and recently had a new addition to the family, we're down to one income as wife had no maternity scheme and we're managing ok.  Its the age old saying, "you cut your cloth to suit".  Your fuel expenses will reduce substantially given your wife won't be travelling to work & I can guarantee that your entertainment costs will plummet (!) if and when baby arrives.  As I say, don't panic......there are thousands of couples in a much worse state financially & you look on a solid footing.  Relax & look forward to your wedding.....apple1


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## Giggsey (21 Nov 2007)

> I am panicking unnecessarily? - Yes.

Your finance seems to be in  good shape.

You could hint that cash in card is your preferred wedding  present...
But I'd say no need to worry.

I wonder has Irish press over  compensating in Ireland rip-off mindset -  that we are all frightened to do anything?


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## Giggsey (21 Nov 2007)

One other thing, you say you have 6 payments left on car loan.
(If there is no penalties)- why not just pay it off? And put extra 390 in  savings ....


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## F. Kruger (21 Nov 2007)

€121pm for mortgage protection seems very high, or does that premium include your savings to the PIP also?


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## cully (21 Nov 2007)

Thanks for Replies Giggsy & F Kruger,

Have queried the life assurance cost with mortgage Broker. Cost of this is just for two life assurance poliices (one each to clear 400k in the event of either dying).At the time i though it excessively high and will look around again as its time over a year now since i started. Its not decreasing cover so may look at that to reduce cost.

Re Car Loan - its a fixed rate loan so minimal penalty would apply i imagine.

Thnk ye are right is saying there is so much in the medai now regarding recession/job losses/property downturn/poor equity returns that people are nearly frightened to commit to anything longterm (children!) due to uncertainty 

But sure life has to go on as normal i suppose


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## ClubMan (21 Nov 2007)

cully said:


> Cost of this is just for two life assurance poliices (one each to clear 400k in the event of either dying).


Two individual policies or a single joint one? If the former - why!?


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## bamboozle (21 Nov 2007)

House insurance of 37pm is far too much for a house of value 400k, I got a great deal of just over €200 with allianze, you also get a 30 or 50 quid discount if you buy policy on line.
Down grade sky package or consider getting NTL tv & broadband combo package.


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## ClubMan (21 Nov 2007)

bamboozle said:


> House insurance of 37pm is far too much for a house of value 400k


Market value is irrelevant - the property should be insured for its reinstatement value.

[broken link removed]


> I got a great deal of just over €200 with allianze


I agree that people should shop around for insurance as with anything else but how do you know that your home insurance quote is in any way relevant to the original poster's situation? Different properties, locations (?), personal details etc.


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## Giggsey (21 Nov 2007)

> Down grade sky package

Cully is not in a position that savings need to be made. why downgrade?
Of course if for eample sky sports is in package and never watched - that is a waste, and downgrade makes sense.

But (again just example) if  Arsenal V Chelsea is a big deal in cully house then 
keep it. Have the option of match being available in your living room....

In a comfortable position, so no need to scrimp and save.


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## bamboozle (21 Nov 2007)

Clubman, to clarify; having been in a position of paying €40 per month for house insurance which was arranged through EBS along with my mortgage, I rang about and through Allianze I was offered an improved policy for €248, I also received a discount for booking on-line.


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## sinbad75 (23 Nov 2007)

Cully,
Myself and my husband have an almost identical income to yourselves, and other than mortgage, are debt free. We are expecting a baby any day now, and in preparation, I sat down to prepare a budget - using all of the good advice I got from this forum.  In addition, we decided on long and short term financial goals.

Firstly, we analysed what we were spending money on - this was especially important when it came to entertainment and food and what I call annual costs - birthdays, christmas, car tax, insurance, car maintenance, holidys etc.  From your thread, assuming you spend everything surplus to what you've outlined, you are spending approx 3400 a month on food, entertainment and annual costs.

We finally came up with a plan - which is working, I might add, an example from my spreadsheet is below.  

What we discovered from the analysis, is that by budgeting 1000 euro a month for food, entertainment and fuel costs, and 1000 euro a month for annual costs, we could afford to pay all of our bills, and in addition:
a) set up a car fund of 750 a month which will allow us to change our cars without getting loans (75 interest, halifax)
b) throw an additional 1000 euro off the mortgage a month - allowing us to pay off our mortgage in ten years time
c) set up monthly savers accounts, which will help to pay for the 16 weeks unpaid maternity leave that I will be taking at the end of my paid maternity leave, and the habit will allow us to pay childminding fees once I get back to work.  

This exercise was very useful for us, as it showed that we could afford to have a child, prior to this, we spent every penny we had every month.  

Also, our standard of living has not changed, we have just as good a time, but with a few more packed lunches and shopping on ebay!  

Finally, you've received a lot of advice regarding the costs that you've outlined, i.e., house insurance etc, but I think that you should concentrate on those costs (i.e., the 3400) that you have not.  

Anyway, hope this helps.




*Month**Sep-07**Surplus*€ 0*Income x*€ 3,513*Income y*€ 2,785 *Revenue mortgage tax relief*€ 72*Total income*€ 6,370*Mortgage*€ 1,113*Top up*€ 1,500* savings x*€ 300* savings y*€ 300*Life Assurance*€ 27*ESB*€ 94*Sky*€ 26*Childcare costs*€ 0*Broadband*€ 25*Car fund*€ 750 *general spending*€ 1,111 *Annual costs *€ 1,000*Total Spending*€ 6,246


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## sinbad75 (23 Nov 2007)

sorry, spreadsheet didn't come up, hope this is a bit better

*Month*
*Sep-07*
*Surplus*
€ 0
*Income x*
€ 3,513
*Income y*
€ 2,785
*Revenue*
€ 72
*Total income*
€ 6,370
*Mortgage*
€ 1,113
*Top up*
€ 1,500
*savings x*
€ 300
*savings y*
€ 300
*Life Assurance*
€ 27
*ESB*
€ 94
*Sky*
€ 26
*Childcare costs*
€ 0
*Broadband*
€ 25
*Car fund*
€ 750


*general spending*
€ 1,111
*Annual costs *
€ 987
*Total Spending*
€ 6,233


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