# 42 very bad with money



## lucashood1977 (9 Mar 2021)

I am a 42 year old single man with 0 dependents and no mortgage despite having a very good salary I have no savings . I would like advice on how to better take care of my finances and whether I should buy a house . Im in my current role for the past 13 years but Im unsure whether to buy a house as I dont think I want to stay in Waterford. Ive pretty much resigned myself to ever wanting kids or getting married so I only have myself to look after . I am currently doing a course in the hope of getting contract roles in the field im in to make more money . Im just wandering if I should try and buy a house anyway as an investment since i am currently in full time employment.


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## lucashood1977 (9 Mar 2021)

Age:42
Spouse’s/Partner's age:no spouse

Annual gross income from employment or profession:75000
Annual gross income of spouse:n/a

Monthly take-home pay:4000

Type of employment: e.g. Civil Servant, self-employed,pharma

In general are you:
(a) spending more than you earn, or: i live pay check to pay check
(b) saving?

Rough estimate of value of home:I dont have a house
Amount outstanding on your mortgage:
What interest rate are you paying?

Other borrowings – car loans/personal loans etc: I have a cu loan for a car i bought last august . Ive 11k to go on it. pay 327 a month.  4.5 years left on the loan

Do you pay off your full credit card balance each month?i dont have a credit card
If not, what is the balance on your credit card?n/a

Savings and investments:0

Do you have a pension scheme?i do through work

Do you own any investment or other property?no

Ages of children:n/a

Life insurance:no


What specific question do you have or what issues are of concern to you?should I get on the property market as an investment even though im considering leaving my permanent job to go contracting . Are investments in s &p 500 mutal index funds something I should get on.


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## cremeegg (9 Mar 2021)

lucashood1977 said:


> I am a 42 year old single man with 0 dependents and no mortgage despite having a very good salary I have no savings . I would like advice on how to better take care of my finances and whether I should buy a house . Im in my current role for the past 13 years but Im unsure whether to buy a house as I dont think I want to stay in Waterford. Ive pretty much resigned myself to ever wanting kids or getting married so I only have myself to look after . I am currently doing a course in the hope of getting contract roles in the field im in to make more money . Im just wandering if I should try and buy a house anyway as an investment since i am currently in full time employment.


If you have no savings you cannot buy a house just yet.

Open a saving account, put in €100 every payday. If you can live like that put in €200 every payday. Increase the monthly amount until you get to a point where you are short of money for expenses.

In a years time set yourself savings goals.


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## Steven Barrett (9 Mar 2021)

Automate your savings so it goes out of your account like a bill. If you are single and earning a decent wage, you should be able to save a decent amount each month given we can't go anywhere. You can always reduce the amount when we can do more. 




Steven
www.bluewaterfp.ie


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## Introuble83 (9 Mar 2021)

Try keep a spreadsheet or write down we’re your money is going . As above mandate an amount of savings from your current account into a savings account . Try not to dip into it . Review your position every few months


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## trajan (9 Mar 2021)

Very much agree with InTrouble83. We all have to present a manageable monthly budget before we can go borrowing any money from a bank, building society or CU - whether it's for a house or anything else. And neither can a financial adviser have anything real  to work with unless you have a realistic household budget in place.

It was only I set up a spreadsheet and coldly (actually it was shameful in the extreme to see how money kept leaking out on unimportant things) examined my income and outlays, then set realistic budgets for all items, recorded exceptional income and outlay items, lodgements to bank/CU a/cs that I started to catch on to myself.

One thing that's a curse to people whose income is "challenged" by their expenses is the distribution of regular expenses (like Direct Debits or Standing Orders, rent, car tax, insurances, utility bills, etc) across the month. Missing a DD payment triggers charges and these upset the plan for the next pay-cycle. This problem is one of the first things you'll spot in a spreadsheet. To get less famine-feast cycles you have to spread the collection dates of SOs and DDs fairly through the month, not have too many on month beginnings or ends.

Utility bill expenses must be examined in detail to see how to economise. It is often possible to use night-rate electricity to do washing of clothes, personal washing and even meal cooking using a slow cooker. A shed or rear stoop can be a cheaper way of drying clothes than the tumbler.

The spreadsheet provides a target plan for savings that you can see grow over each pay period.
Okay, you'll fall flat a few times  but the framework is always there to help you back up again.


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## dereko1969 (9 Mar 2021)

first things first - what is your current rent? You're taking home 4,000 a month, your car loan is 327 a month, that leaves a lot of money that could be saved.
You need to really examine where your spending is going. Since lockdown this should be easier as most of us are using cards for every purchase. Sit down and go through your last 6 months bank statements and see where the money went.


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## lucashood1977 (9 Mar 2021)

dereko1969 said:


> first things first - what is your current rent? You're taking home 4,000 a month, your car loan is 327 a month, that leaves a lot of money that could be saved.
> You need to really examine where your spending is going. Since lockdown this should be easier as most of us are using cards for every purchase. Sit down and go through your last 6 months bank statements and see where the money went.


My rent is 600 a month. 
elec is 200. 
Internet 40
Diesel 50

I should be able to save at least 2k a month.  I drink too much and spend quite a bit on very expensive wine


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## trajan (9 Mar 2021)

Electricity €200 a month or €200 bimonthly ? Explore savings here via dual day/night meters.
Internet is good compared to other cities. I'm on €50 a month myself and most everyone else in this area is on about €60.
I assume diesel bill pertains mostly to work travel so you can't do too much there unless you car share - and that has you depending on other people's idea of punctuality.
But you *have* to watch the drink bill - as an expense and for health reasons. You'd get more socially and financially out of some hobby like droning or photography - there's demand for realistic photos (i.e. not those stupid stock photos) and aerial photos and videos from web designers.


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## Introuble83 (9 Mar 2021)

lucashood1977 said:


> My rent is 600 a month.
> elec is 200.
> Internet 40
> Diesel 50
> ...


If you are saving nothing at present jumping to 2k monthly will be difficult. Start at 1250 and put 750 into a separate savings or credit union . We’re necessary dip into the 750 if you feel you have too but leave the 1250. After a few months increase the 1250 to 1500 and decrease the 750 to 500 . See how it goes . Find a wine you like in Aldi or lidl .


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## mtk (10 Mar 2021)

hi,
may i ask how did you manage to spend it all during lockdown periods?


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## Steven Barrett (10 Mar 2021)

lucashood1977 said:


> I should be able to save at least 2k a month.  I drink too much and spend quite a bit on very expensive wine


If you automate your savings, you won't have the disposable income to spend on expensive wine. When it gets to the month end, you'll have to buy €9 bottles. 

...and if you think that you will just transfer the money out of your savings account into your current account to buy that fancy wine, stick it in a 7 or 30 day notice account where you can't get it quick.


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## shweeney (10 Mar 2021)

SBarrett said:


> If you automate your savings, you won't have the disposable income to spend on expensive wine. When it gets to the month end, you'll have to buy €9 bottles.


he seems to have at least 2500 a month disposable income, he can still afford to buy some decent wine and save some money at the same time.

"I drink too much and spend quite a bit on very expensive wine" - unless you're getting smashed every night on Chateauneuf-de-Pape, I still don't see where the money is going. More information is needed, are you spending 2K a month on wine?


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## trajan (10 Mar 2021)

_"I drink too much and spend quite a bit on very expensive wine" - unless you're getting smashed every night on Chateauneuf-de-Pape, I still don't see where the money is going. More information is needed, are you spending 2K a month on wine?_

I think that a less indignant tone is needed here.  

Look, lucashood1977 needs some time to prepare and explore his expenses and budget before entering them on a spreadsheet for deeper study.
If there is anyone here on a challenged budget and who has undergone this process then they will understand that it is a painful and embarrassing experience, even if it will be transformational for them eventually.
Jokes about Châteauneuf-du-Pape won't help in this endeavour.

With the Davy situation and our financial system in general so much under strain right now, surely we can find more topics to discuss ?


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## shweeney (10 Mar 2021)

trajan said:


> I think that a less indignant tone is needed here.



genuinely not indignant, just wondering what's missing from the picture.
As someone who is married with kids, I think I'd really struggle to spend all my salary without having to support all these hangers-on dependents.


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## trajan (10 Mar 2021)

_As someone who is married with kids, I think I'd really struggle to spend all my salary without having to support all these hangers-on dependents._

Okay. But it does highlight how many people - even so-called high earners like dentists and so on - can somehow find their lifestyle stretching their seemingly adequate budgets. 

So many people in the financial arena will offer you help with investing your payday surplus. 
Yet hardly anyone will help with the financial potty-training needed to generate the surplus in the first instance.


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## _OkGo_ (10 Mar 2021)

trajan said:


> So many people in the financial arena will offer you help with investing your payday surplus.
> Yet hardly anyone will help with the financial potty-training needed to generate the surplus in the first instance


A very true statement. Unfortunately many financial advisors are selling products on which they make commission. They don't really care whether it is right for you or not as long as they get you signed up!

Basic budgeting is a life-skill that @lucashood1977 is currently lacking but can easily resolve. The good news is that there is still plenty of time and a healthy salary to make a real difference to their future.

OP cannot continue living on €4k per month. OP knows they should be able to save €2k/m so where is it all going?


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## Merowig (10 Mar 2021)

You should start tracking your spending as advised here already (Mabs.ie has a spreadsheet).
First you should save for a rainy day fund - something like 2-6 months of spending. Especially if you want to move from a permanent position to contracting you might be in need of this as you might not have always a contract.

Also you mentioned that your company offers a pension fund - do they also top up your contributions? What is the percentage you put in and they put in? If you would increase your percentage would they increase as well? 

For buying a house you will need to have a deposit and also showing saving behavior for at least six months.


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## Clamball (11 Mar 2021)

I really feel for you Lucashood1977, it seems you are in a place where you want to change direction and move on with your life.  But change is tough and if you make a lot of changes at one go then it can be really hard to maintain.  But changing one thing at a time makes things change very slowly and progress can be slow.  But I think there are several things you can consider to help you along the way.

1. Figure out what you are spending all your money on.
My rent is 600 a month. 
elec is 200. 
Internet 40
Diesel 50
Car 375

this is 1265 which leaves €2735 to be accounted for.  So every time you spend money write it down and keep the receipt.   Have a look at the mabs spreadsheet, it will make you think of areas you are spending and don’t recall.
Food?
Drink
Heating
Car insurance, tax, service
Clothes
Books, movies
Takeaways
Medical costs, doctor, dentist, chemist.

2. Once you have figured out what you spend your money on then try and decide how much each month you actually want to spend and give yourself a budget.  

So say you do spend €40 a day on wine which is €1240 per month.  Then decide if that is what you want to spend or can you get away with spending less.  Maybe you can decide on €40 every second day, then you can budget to save €620 per month.  

3 When you get paid put that €620 into a different account, loads of ideas above on how to do that.  And if the month progresses and you find you need to dip into the €620 don’t beat yourself up, just do your best.  Change is hard.  So maybe at the end of the month all you have left is €200 then transfer that to a long term saving that is harder to access.  At the start of month 2 put the €200 straight into the long term saving and the €420 into the different account and try again.

3.  Now you are in month 2, you have definitely been able to make €200 a month saving and you want to make more.  There are several things you can do.  

Examine what causes you to spend, what triggers the action.  I am going to focus on the wine again, and I am sorry it is alcohol as maybe you have addiction issues which are a much bigger issue but I am for the sake of this topic going to assume you are able to decide whether you want to drink or not.  So what makes you decide to buy that expensive bottle of wine.  Do you call to the off licence every night on the way home from work? Do you spend hours researching wine and vineyards and buying them online.  Are you a member of a wine club?  Once you figure out what triggers the purchase then maybe you can do sometime to adjust the trigger.  Maybe if it is a habit to drop into the off licence, change your route home so you don’t pass it.  Decide to go in once every second day rather than every day?  Make a decision to buy a €20 bottle rather than a €40 bottle for the next 10 bottles you buy.  Any little action that can help you make a mindful spending decision rather than a habitual spending decision.  

So each time you are paying ask yourself, if you are happy with your purchase, is it in your budget, or would you like to make one change to reduce the spend.  And maybe half the time you are successful and half the time you default to your typical pattern.  But at the end of the month the savings were €400.  Put that into your long term savings and at the start of month 3 put €600 into long term savings.

4.  Now you are at the start of month 3 with €1400 in long term savings.  You are making great progress and you should be proud of yourself.  But you need to maintain your saving goals by visualising what you are saving for.  You spoke about moving, setting you as a sole trader, probably buying a house.  So start researching and planning.  See yourself living in your new location, imagine your lifestyle, work on your new work persona, sales pitch, business card etc.  Then every month you save, expand your goals,  “this month I can use my savings to buy a chair in my new kitchen”. Imagine it, look up different options, spend the money mentally.  Give yourself a mental pat on the back for making the savings.  Make it real by talking to friends about the type of kitchen chair you are going to buy in your new home.  

5.  As the months go on, make small changes one by one.  Celebrate knowing where you are spending and tracking all your money.  Know exactly what you want to spend each day, week, month.  Be proud every time you decide to save and not spend.  Be really proud of seeing your savings grow.  Distract yourself from being in situations that trigger spending, leave the house, go for a walk, delay the spend, decide to do it the next day if you really want it, anything to wait.  Maybe the trigger event or time will pass and in the morning you can decide again, spend or save.  Set goals for your savings and visualise it happening, say when I get to €10 K saved I am going to change jobs, when I get to €20K I am going to start planning to move, when I get to €50K I am going to buy a house.  Whatever goals work for you.  

Do you want to take the first step and let us know what your spending is for the next week, month.  If you write it out you make it real and people have lots of ideas to help even in small ways.  Changing your electricity provider might save you €200 a year, and you might spend a night figuring that out as a distraction to spending €200, win win all around.


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## tecate (14 Mar 2021)

There are apps which track all of your spending - every last cent. You have to be disciplined about inputting that info -but it's powerful. That to me is your starting point. You earn decent money. There's no way that you can't save on that salary.


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## Gordon Gekko (14 Mar 2021)

Do a spreadsheet and analyse where the money goes. Then identify lines that can be reduced and ones that you don’t want to reduce. Use Revolut as well; great for keeping track of discretionary spending. And be realistic.


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## SPC100 (21 Mar 2021)

lucashood1977 said:


> Ive pretty much resigned myself to ever wanting kids or getting married



I agree with automatically sending money to a savings account the day it arrives in your bank account. Or alternately have your company pay your salary into a new account, and only transfer from that into your current account your budget for the month.

I agree with getting control over your relationship with Alcohol (assuming you are spending 30 euro a day on drink).

I know this is ask about money, but 'resigned' sounds like this is not your preference, and that makes my heart go out to you.

If you want a partner and/or kids you absolutely still can have that, but you will have to work to get it.

Please don't give up hope.


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## Bronte (21 Mar 2021)

The thing that screams at me is loneliness. I suggest making more of an effort there before it gets too late.


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## DBL2018 (21 Mar 2021)

We use the good budget app and have done for a couple of years now. We have cleared down most of our debt apart from the mortgage and are now saving regularly.  We have been a bit rubbish with money, high salaries but good at spending.  Our ten envelopes have really focused the mind.


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## lucashood1977 (9 Apr 2021)

Ive managed to save 2k from my earnings last month and am confident i can save another 2k this month and every month going forward. Im doing this whilst also paying off a car loan. How long do you think the banks will need to see this new habit before they will consider me for  mortgage ?


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## Introuble83 (9 Apr 2021)

lucashood1977 said:


> Ive managed to save 2k from my earnings last month and am confident i can save another 2k this month and every month going forward. Im doing this whilst also paying off a car loan. How long do you think the banks will need to see this new habit before they will consider me for  mortgage ?


I would imagine 12 months would be sufficient


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## noproblem (9 Apr 2021)

Think about buying an apartment, would suit your lifestyle now, and with what you've told us, into the future as well.  At 42 you  need to get your skates on as regards getting a mortgage. I'd imagine any good banking person would be wondering how you left it until 42+ to start putting a few bob aside. I sure would.


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## RedOnion (10 Apr 2021)

lucashood1977 said:


> Ive managed to save 2k from my earnings last month and am confident i can save another 2k this month and every month going forward.


Firstly, well done. That's a big saving once you make the decision!
I would caution whether saving 2k per month is sustainable. 

If you're aim is to buy a property, I'd suggest setting yourself a budget. Work out what the mortgage repayment would be if interest rates were 5%, over 22 year term, as you're already 42.
Set up a regular savings account, and automatically put in that much every month. Don't touch the money in the account.
Check if there's anything else showing up on your bank statements that might be a red flag - 1k transfers to gambling sites, etc.
Make sure your rent payment is easily identified on your statement. The bank will consider this as part of your affordability assessment, but only if you can show it being paid every month.

After 6 months you can start a mortgage application.

You need to work out how you'll have 10% deposit, because that'll take more than 6 months. Together with your monthly savings, there is also the Help to Buy scheme, but the current 'enhanced' HTB is due to expire at the end of the year, although it might be extended in the budget.


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## SPC100 (10 Apr 2021)

Are you better off paying off the 11k cu car loan. Or saving up cash? What is the interest rate on the loan?

Normally I would say pay off the loan first. But if mortgage affordability is not an issue, and you are in a rush to buy a home, i guess saving the cash for deposit makes sense short term.


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## SPC100 (10 Apr 2021)

What price range are you considering for your home?


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## SPC100 (10 Apr 2021)

Oh and big congratulations for making the first step.

Don't beat yourself up if you can only save 1500 some months.

Have you automated the saving, so you don't have to take any action and the saving just happens?


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## lucashood1977 (11 Apr 2021)

RedOnion said:


> Firstly, well done. That's a big saving once you make the decision!
> I would caution whether saving 2k per month is sustainable.
> 
> If you're aim is to buy a property, I'd suggest setting yourself a budget. Work out what the mortgage repayment would be if interest rates were 5%, over 22 year term, as you're already 42.
> ...


Thankfully apart from spending 48 euro a month on the lotto gambling has never been a vice of mine.


SPC100 said:


> What price range are you considering for your home?


Im in 2 mindsets here . I gross around 70k a year and where I'm living you can get a modest 2-3 bedroom house for 140k however I am wondering if I should go for something nicer and more expensive.   Im not sure how much of a mortgage the banks would agree to give me


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## Clamball (12 Apr 2021)

Congrats on taking good steps last month, you must be delighted with yourself.  So you said you are bad with money so pace yourself and see how you keep saving in the next 5 months before you commit to being able to afford a certain payback for a mortgage.  You have to be confident you can make the mortgage payment as well as the bank.   Don’t base your decisions on the first month.  Let us know how you get on next month.


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## so-crates (12 Apr 2021)

lucashood1977 said:


> Thankfully apart from spending 48 euro a month on the lotto gambling has never been a vice of mine.
> 
> Im in 2 mindsets here . I gross around 70k a year and where I'm living you can get a modest 2-3 bedroom house for 140k however I am wondering if I should go for something nicer and more expensive.   Im not sure how much of a mortgage the banks would agree to give me


Well done on starting your savings. As others have said, it may not be comfortable to sustain that level of saving long term so don't be too hard on yourself if you find it slips back to a more liveable level (e.g. 1.5k).

A couple of thoughts.

First off, your pension provision, you have a pension through work but I wonder if you have reviewed it and decided whether it is adequate. I don't know if it is defined contribution or defined benefit, whether it is an occupational pension or a PRSA, what level of contribution you are currently making, whether your employer will match contributions and if they do to what level, etc. If you are currently contributing the maximum % allowable tax free (for your age that is 25%) then you shouldn't need to review it, but if you are contributing 5% then it may be worth considering contributing more. If not immediately (as you want to save for a deposit for a house first) but it should be something you keep in mind going forward. Because of the tax credit, retirement savings are particularly good value but if your first priority is getting a house then that is where your focus should be for now. If you want to look at your pension provision, start with a calculator like this one https://www.pensionsauthority.ie/en/lifecycle/useful-resources/pension-calculator/

Secondly, I take it you are planning to live in the property, at least in the medium term? Even if down the line you decide to rent it out, as it will be your home for a time, so buy a place that suits you. Buying a cheap property with a view to rental and living there may not be money well spent. You earn well enough to afford something besides the cheapest property on the market and if you are going to live there then you should afford yourself a home you will be happy to live in. What do you see in a home for you? Is a garden important? Do you want scenic views? Do you want a home office? Will you need entertaining space? Will you have people staying? Do you want a period piece or is a new build more to your taste. As you are 42, there is a limit as to how long of a mortgage they will give you now, that will decrease over time, so it is possible that the most you will be able to borrow will be for this property. I am not advocating over-stretching to a €300k-€400k property but don't confine yourself to the €130k-€140k bracket either. Take your time looking. You have to build up a deposit anyway and you should also build up a fund for fees and furnishing so that you are not moving into an empty shell with empty pockets when you do get the keys to your first place.


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## _OkGo_ (12 Apr 2021)

lucashood1977 said:


> Im in 2 mindsets here . I gross around 70k a year and where I'm living you can get a modest 2-3 bedroom house for 140k however I am wondering if I should go for something nicer and more expensive. Im not sure how much of a mortgage the banks would agree to give me





lucashood1977 said:


> My rent is 600 a month.



What are you currently renting for €600/m? Are you renting your own place or sharing? Is it the type of property you could see yourself living in long term? How much is it worth? If it is one of the modest 2/3 bed properties that you describe then it will give you an idea of whether you want or need to go more expensive in your own property search.

If you maintain your new saving and spending habits (maybe not as extreme as €2k/m) then you should have no problems getting a mortgage up to 3.5x your income. However, your bigger issue is the deposit. If you want to buy at €250k, you need at least €25k as deposit plus savings for all of the costs of purchasing so really you should budget for €35k. 

That is at least 18 months of aggressive saving for you. Can you or do you want to do that?


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## lucashood1977 (12 Apr 2021)

Thanks for the responses folks.  Some very good replys.  The thing is Im not really committed to living where I currently am despite being here in full time emooyment almost 13 years. In fact im looking to upskill in my current field and go contracting either in ireland or abroad.  I know time isnt on my side for the mortgage but im not sure what to do if my heart isn't set in living here in the long term . To the person who asked my current situation.  I currently rent a very basic 1 bed apartment in Waterford City


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## so-crates (12 Apr 2021)

lucashood1977 said:


> Thanks for the responses folks.  Some very good replys.  The thing is Im not really committed to living where I currently am despite being here in full time emooyment almost 13 years. In fact im looking to upskill in my current field and go contracting either in ireland or abroad.  I know time isnt on my side for the mortgage but im not sure what to do if my heart isn't set in living here in the long term . To the person who asked my current situation.  I currently rent a very basic 1 bed apartment in Waterford City



Being a landlord, especially in the case where you have a single property, can be quite a commitment. If you do end up working and living abroad and decide to rent out the property, you will be responsible for the maintenance etc of a property in a different country, you will have an income in two different tax jurisdictions, you will have to consider how to manage vacancies and what to do if something (heaven forbid) goes wrong. I assume you would probably look to a management agency but you will need to think very carefully about how this would work, what it would cost, what you could afford. You should also consider whether it would actually pay for itself. If it comes to living abroad it may prove better financially to sell the property.

Given that perhaps you should be focusing on what you want from a home in the medium term. It may also be worth revisiting the decision to buy a property at all. If you buy property, moving will involve either dealing with that property at a distance or you will need to sell it. I think whether or not you purchase a property, having savings will be beneficial and could be used for several other things (such as training, taking a career break to focus on upskilling, moving to a new place in Ireland or abroad).


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