# Where can we improve



## seaview (27 Apr 2016)

Age: 36
Spouse’s/Partner's age: 41

Annual gross income from employment or profession: 87000 + bonus ~4000 aprox
Annual gross income of spouse: 0

*Monthly take-home pay 4099 *(after deductions for pension, avcs etc.)

Type of employment: Private Sector

In general are you:

(a) spending more than you earn, or

*(b) Probably breaking even if that*


Rough estimate of value of home - Difficult to estimate 150,000

Mortgage outstanding: 126k tracker mortgage mothly repayments 563.30


*Other borrowings – None*

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

*Savings and investments:*

Savings - 5,000  (saving minimum 130 euro per month)

Stocks  - 12,000 (part of a share bonus scheme must hold onto them for three years before selling to avail of tax benefits.


*Do you have a pension scheme?* Yes husband pays 400 euro into pension and further 300 euro avc.

*Monthly bills:  *Our monthly bills are as follows:

House Insurance renatl property:   42.10
Broadband provider:                      25.41
Sky:                                              33.00
A.A.:                                             17.50
Acorn Life:                                     42.55
Eir:                                                42.55 very bad mobile phone signal so we really need                                                            landline
Friends First:                                  141.61 income protection for my husband
T.V. Licence:                                  13.33 per month
Caledonian:                                    27.41 life policies on our home
O2:                                                40.66
Airtricity:                                        80.65 this month has been quite a bit higher previous                                                               months as this includes all of our heating.
Vodafone:                                      37.00 aprox

Playgroup:                                     220.00 per month will be free next year

We also have all the other expenses of transport, gp vists prescriptions etc.

I am currently putting 550.00 per month into account to pay for expenses such as car insurance, tax, bins, etc.

I put 70.00 per month into the credit union.

I put 300 into account for expenses such as birthdays, presents, weddings etc but I have only started these accounts since 01st February.

*Do you own any investment or other property?* Yes mortgage outstanding 101000 euros monthly repayments 876.37. Standard variable rate 3.65%. Rental income 550 per month

*Ages of children: Two children - 3 years old and new baby*

*Life insurance:* Husband - coverage through work. We both have life policies for each of the properties and another life policy each of 150k.

*What specific question do you have or what issues are of concern to you?*

I am wondering are we going wrong somewhere we just seem to about breakeven each month. A big concern is that both of our cars are getting older and we need to plan to replace them. We live in a very rural area so two cars are essential.
The rental property was where we lived until a job opprtunity came up. We couldnt sell the property at the time and so we have been renting it for the past 3.5 years. We have been very lucky and had just two excellent tennants in that time. We just dont know what to do with it as we wouldnt get back the mony we paid for it.
Is my husband paying too much into his pension?


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## Sarenco (27 Apr 2016)

Hi seaview

What price would you could realistically expect to achieve if you were to put the rental property back on the market today?  Is the rental in negative equity?

I suspect it's not a very profitable investment at that mortgage rate and it's obviously a significant drag on your cash flow.


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## Bronte (27 Apr 2016)

1. SKY + broadband+ Eircom+ Vodaphone +O2.  Is there no 'package' that you can get to bring these costs down.  Called a bundle I believe.

2. Life Insurances

Acorn Life: 42.55
Friends First: 141.61 income protection for my husband
Caledonian: 27.41 life policies on our home

Can you give us more details on those, is Acorn for the rental?

Want to know if you can get a better deal.  Would worry that the Friends first is a waste of time.  Especially if your husband is already covered via work.

3. Airtricity, as far as I know you can make this a more even amount throughout the year by figuring out how much you should pay on an annual basis and then work it out monthly so you get no nasty surprises.

4. Your specific questions about the cars, I would cancel the husband's AVC of 300 per month and instead save that specifically for replacement cars. 

4. Savings of 5K.  Don't understand, you are saving 130 each month but also 70 to the credit union, or 200 a month, can you please explain


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## thedaddyman (27 Apr 2016)

Start with tax. given you don't work, are your tax affairs set up in the best way so your husband can take advantage of your credits. also have you claimed for every medical expense incurred. You may be entitled to a refund for past years.

you need to look at AVC's for someone of his age, I'd question if it's worth it

Your husband should check his work's sickness policy, is it worth paying income protection if his work or pension scheme cover him for long term/permanent incapacity?

You are putting aside €10k (300+550 X 12) per annum to cover car insurance and tax, bins, wedding presents etc etc, that seems a lot


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## seaview (27 Apr 2016)

Thank you for all the replies. 

The daddyman all of our tax affairs are set up to get the most available we have checked this on a number of occasions. All medical expenses have been claimed for. Everything is up to date with regards tax paid and claimed.

My husbands company would pay full salary for the first six months of illness and then they would pay half salary for the following six months. The income protection would only come into effect after the first six months of illness.

The 300 and 550 I have only started putting aside since the 01st February. I have calculated that our yearly bills bins insurances taxes etc to be 4,000.00 so the surplus in this account I was going to use for car repairs and house repairs. The 300 I havent fully calculated how much I would need for birthdays, weddings etc but I was also going to use this to pay for Christmas presents and dinners out which we only do for our birthdays and anniversary. 

I only started putting aside 70 in the credit union again in February and that was really to be car replacement fund as that is a worry for us at the moment.

The avcs we are really wondering are they worth it as we could use that money elsewhere.

Bronte we live in a very rural area and we cannot get broadband from the main providers. the one we are paying for is satellite broadband. I have checked with both sky and eir but they cannot provide broadband to us.

The Acorn life is a seperate policy not tied to either of the two houses. It provides 185000 each in the event of death. Wehave seperate caledonian life policies attached to the rental property they cost 145 euros for me and 175 euros for my husband. we pay those annually a once off payment. 

Airtricity we were making the even amount throughout the year but they had based it on a summer bill last year and so we werent paying enough I rang them up went through everything with them ie heating included and decided it was best to pay our bills based on what we use each month.

The 5k in savings is an account I started three years agao up until recently I was saving 120 into the account but I have increased this to 130. Ideally this account would be building up for our little ones future i.e. college.

Sarenco we bought the rental in 2003 and paid 163k for it it would now guide at 120k probably would get 110k for it and houses in the area the rental property is in take a long time to sell.

All advise is greatly appreciated.


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## 44brendan (27 Apr 2016)

Stop AVC's for the moment and use funds to finance 1 replacement car. Shares will be encashable in max 2/3 years. 2nd car can be replaced from these funds. Also 220 pm free from next year will be a further supplement. My main advice would be to budget everything and stick to the budget. Keep saving for education as these costs if you remain in rural area will be really significant!!!


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## seaview (27 Apr 2016)

Thank you 44brendan for your advise. I really do need to keep saving for education costs as I am aware of how significant they are at the moment because that is our only real savings I worry in case we will have to dip into them. 
All of your advise makes sense. We do try really hard with our money it just feels like we are getting nowhere.


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## Bronte (27 Apr 2016)

Don't be so hard on yourself, life isn't much more difficult than when you have a mortgage and two young kids, your mortgage is low, if you budget well you'll be fine.  I would still double check about the 'broadband' every six months. 

And I'm not sure but you seem to have too much insurance.  What are your husbands work entitlements.  Are you sure that policy will pay out for six months if he loses his job, they are very tricky policies.


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## Sarenco (27 Apr 2016)

seaview said:


> Sarenco we bought the rental in 2003 and paid 163k for it it would now guide at 120k probably would get 110k for it and houses in the area the rental property is in take a long time to sell.
> 
> All advise is greatly appreciated.



You certainly seem to have very comprehensive insurance coverage for your circumstances and I agree with 44brendan that it would make sense to suspend AVCs for a while if you find that you are struggling to meet your current spending needs.

However, I think that the rental property is your real problem and you might want to consider putting it back on the market as soon as you are confident that the achievable sales price would clear the outstanding mortgage and all related disposal costs. At best it's only marginally profitable on an after-tax basis and it's cash-flow negative to the tune of well over €300 per month. 

I'm afraid what you originally paid for the property is not really relevant at this stage.  Any property will sell pretty quickly if it's priced correctly.


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## Steven Barrett (27 Apr 2016)

Bronte said:


> Don't be so hard on yourself, life isn't much more difficult than when you have a mortgage and two young kids, your mortgage is low, if you budget well you'll be fine.  I would still double check about the 'broadband' every six months.
> 
> And I'm not sure but you seem to have too much insurance.  What are your husbands work entitlements.  *Are you sure that policy will pay out for six months if he loses his job, they are very tricky policies.*



It doesn't pay out if he loses his job, it's if he has a long term illness. Very different policies and very important as he is the sole earner in the household. If he's long term sick, they are in financial trouble. Ditto for life cover. If he dies, the family needs cash. 

Seaview, don't be hard on yourself. You are at a very expensive time of life, so you won't be able to keep everything going. Pick the 3 most important things you have to fund this year and make sure they are done. If your husband has to reduce or stop his AVC's, do it.

Sarenco is right about the rental property, it's costing you over €300 a month and that's before tax and all the other costs of being a landlord, so that's over €4,000 a year out of net income going on the property. If it's in a rural area, how long before you get back to what you paid for it? How many years of subsidising it by €4,000 a year? Sometimes investments don't work out and you just need to cut your losses. Count yourself lucky you are not in negative equity and the bank will let you sell it. 


Steven
www.bluewaterfp.ie


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## seaview (27 Apr 2016)

Yes SBarrett that is correct the income protection policy does not pay out if my husband loses his job its if he has a long term illness and as he is the sole earner I would be very reluctant to let that go. 
The life policies are as follows: 
Caledonian life policy: 27.41 monthly - term assurance - attached to the mortgage that we have on our home 
Caledonian Life policy: 316.00 annually - convertible term assurance attached to the rental property it was set up based on 165000 each
Acorn Life policy          42.55 per month - not attached to either property - 
My husbands company  have a death in service benefit of 150k.

While we live in a very rural area the rental property is in a large enough town about 20 miles outside of a city. Its really good to have feedback on the rental property as we have tried many times to decide what to do with it.

thanks again for all the replies.


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## thedaddyman (28 Apr 2016)

seaview said:


> Yes SBarrett that is correct the income protection policy does not pay out if my husband loses his job its if he has a long term illness and as he is the sole earner I would be very reluctant to let that go.



Check your husbands sickness policy and what happens if he lost his job due to illness. I know when it happened one of my team a few years ago, my employer had a scheme in place where basically she get's paid something like half her salary permanently via a company insurance scheme


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## trasneoir (30 Apr 2016)

When I hear from people keeping different savings accounts for different goals, I like to recommend http://www.youneedabudget.com/learn/guide/quick-start .
I and a few others here have found it life-altering. (I'm not affiliated, just a happy customer)


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## Sandals (30 Apr 2016)

Cut out the playgroup, instant 220 saved, less fuel etc...your three yr has one if not two years ecce ahead.

Attend a parent and toddler group, you and both your children will benefit from it and minimal cost, €1 or €2 a morning.


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## Suze456 (1 May 2016)

80 euro between Vodafone and o2 seems high to me
Do you really need sky?
Think I would be putting the 300 euro into a car fund, unless you have a heap of family weddings in 2016  
Also AA - our car insurance includes roadside assistance.


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## seaview (4 May 2016)

Thanks for all the replies. Sandals we do not have a parent and toddler group in our area. We were advised to get the three year old into playgroup for a number of reasons and it has been hugely beneficial for him so this would be something we would be hesitant to cut. He will be free next year and going to national school the year after.

We have two family events coming up in July and October so we will need to have some of the 300euro money for them. I am just curious what you would suggest we do if we do if we put this money into a car fund for money for birthdays, christmas, family events etc

Suze456 80euro is quiet expensive and something that I look into. Unfortunately I renewed my phone contract during the year I was in the middle of my pregnancy at the time and I hold my hands up and say that I just went ahead and renewed it. I do not have any roadside assistance with my car insurance cover I never include it with my car insurance as the aa gives much better cover and because we are in such an isolated area we do travel quite a lot I have had to use aa on a few occasions.


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## txirimiri (4 May 2016)

300euro a month is a huge amount of money to put towards birthdays and weddings. That's 3600 a year! I would have a bit more disposable income coming into the household at the moment than you but I wouldn't dream of spending anything like that on birthdays, weddings etc. I give my kids and nieces and nephews smallish birthday presents (book, lego, CD, small toys), parties are in the house with homer made food or the kids can choose one or two friends and we go to the cinema or for pizza, I don't exchange birthday presents with OH or siblings, for my parents and parents in law maybe a bunch of flowers or a meal out, Christmas we do kris kindle with siblings and parents and buy the kids clothes and sports stuff they need anyway (santa does come with a big present each and, along with food and wine, that does end up costing a fair whack). Family should understand nowadays that things are tight for everyone, particularly when children are small. I don't understand how anyone could expect you to be spending over 3k on family events in one year! What are the events?


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## seaview (4 May 2016)

The expense is more the accomadation costs they are about four hours away from us so we are staying over two nights for each & we have the kids with us. As I said earlier these expenses I hadn't calculated exactly so I could well be putting way too much money into this fund.


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