# Advice on maximising our money



## reds (10 Dec 2007)

Looking for some advice on what to do now. I bought my home two years ago and my partner will be moving in with me. 
We hope to move in the next few years and would like some advice on how to maximise our savings, and advice on investments.
I've been lazy about saving until now but between us we're doing well financially and want to get things in order.

Age: 30
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 60,000
Annual gross income spouse: 80,000
Both full-time employed in the private sector

Expenditure pattern: Usually have 2,000 in my current account at the end of the month. I've left it there purely to cover the bits and pieces I've had to do to the house.

Rough estimate of value of home - 380,000

Mortgage on home - 280,000

Mortgage provider: Ulster Bank tracker LTV<80%

Interest rate - 4.75%

Other borrowings – car loans/personal loans etc - None

Do you pay off your full credit card balance each month? Yes

Savings and investments: I save 250 a month into an EBS SSIA Optimise account. I know there are better rates out there, which one?!

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Life insurance: 16 a month


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## CCOVICH (10 Dec 2007)

Could you use the €2,000 left in your account to pay down the capital amount on your mortgage?

Re. the Optimise account-there are almost certainly better regular savings options out there.  See here for more details.

If you are willing to take a bit more risk, you may want to consider investing in a unit linked fund that allows for regular contributions.

Are you on a defined contribution pension or a defined benefit scheme?

What will you need money for in the next few years-do you plan to get married or start a family?


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## reds (10 Dec 2007)

I plan to to "over pay" my mortgage once we have two salaries coming in, my main aim is to get the mortgage amount down as much as possible.

I am totally clueless about unit-linked funds!

Thanks for the link to the other savings options, I will check them out. I'm reluctant to open another account, would prefer a direct debit option from my current account.

As for the pension, I'm not sure (!) I can contribute a minimum of 5% and the employer contributes 7.5%. Will have to check that out, obviously.

We do hope to marry and start a family in the next five years. 

I suppose I feel that we should be making the most of our income while we are both earning full-time salaries.


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## Sherman (11 Dec 2007)

As you're only starting out in life, you might be better putting the €2,000 spare each month into more liquid investments than paying off your mortgage - if you pay off the full €2,000 per month extra, chances are you'll never be able to get that money back again. 

If you put the money into some kind of stock market fund e.g. Quinn funds etc, you'd be able to cash the money in if needed in the future when you start a family - after all, your mortgage repayments are quite small compared to your monthly take-home, so I doubt you desperately need to reduce the mortgage. 

Don't forget also, you're unlikely to stay in (what I assume is) your first house for more than five years, so you'll need a hefty deposit when trading up - again this would point to keeping your spare cash in relatively liquid vehicles like the stock market.

However, first priority is to build up an emergency fund - given that you're both in the private sector, I'd go for up to 6 months' of living expenses e.g. mortgage, food, transport etc.

I note you're paying 12.5% into your pension - at your age, you can get tax relief on contributions up to 20% of your gross salary - you might look at upping your contributions to take maximum advantage of the tax relief available.


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## reds (11 Dec 2007)

Thank you both for your help.


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## clone1 (11 Dec 2007)

reds said:


> I can contribute a minimum of 5% and the employer contributes 7.5%.





Sherman said:


> I note you're paying 12.5% into your pension - at your age, you can get tax relief on contributions up to 20% of your gross salary - you might look at upping your contributions to take maximum advantage of the tax relief available.


I didn't think the 20% figure included employer contributions. So reds could increase contribution from 5% to 20% with an employer match of 7.5% giving a total of 27.5% to retirement. Can anyone clarify if this is the case?


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## ClubMan (11 Dec 2007)

I think with occupational pension schemes (not including _PRSAs _under a company scheme umbrella) you can discount the emloyer's contribution when working out what the employee can contribute and still get full tax and _PRSI_/health contribution relief.


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