# Plenty of income, nothing ever left!



## siobhank83 (18 Feb 2016)

*Age: *32
*Spouse’s/Partner's age: *32* 

Annual gross income from employment or profession: 54,000
Annual gross income of spouse: 55,000*
*Other income: *
Inheritance due of approx 40,000 lump sum this year. Also 160,000 worth (depending on market) of foreign property at some stage in next couple years, rental income from abroad approx 800 euro per month again due when these properties transferred (plus rent collecting in account - approx 12,000 there at the minute)
*
Monthly take-home pay:* about 5,400
*
Type of employment:* public sector (me) private (him)
*
In general are you:*(a) spending more than you earn, or
(b) saving
*(c) spending what we earn √

Rough estimate of value of home: *290,000
*Amount outstanding on your mortgage:* 246,000
*What interest rate are you paying? *3.75% = we pay 248 per week
*
Other borrowings – car loans/personal loans etc: *Student loan of 87,000; I pay 275 per week
*
Do you pay off your full credit card balance each month? *yes
*If not, what is the balance on your credit card? 

Savings and investments: *we save 250 euro per week -about to clear it all out to pay for wedding/honeymoon so will be starting from scratch again
*
Do you have a pension scheme? *HSE plus I pay 69 euro per fortnight AVC; he pays only 100 euro per month BOI pension scheme
*
Do you own any investment or other property? *Just inheritance as above
*
Ages of children: *none - yet!

*Monthly bills:* Sky 65 euro, Health 67 euro, no travel expenses, life and house assurance 80 euro, phone 42 euro, electricity and gas about 100 per month, Spotify and Netflix (I know...) 25 euro per month, groceries approx 400 pm (Lidl all the way)

I suppose we spend about 300 per week on just 'stuff'. Socialising, clothes, etc.
Also, we are with BOI and are shelling out 50 quid a month on charges. I was thinking of switching to KBC as they have a 4% savers account attached to a current account extra (no fees)?

*What specific question do you have or what issues are of concern to you?*
About to get married. Have good incomes and mine goes up incrementally every 18 months by about 5,000. Would like to have kids. Student loan will not be paid off for 7 years. Would need bigger house if we have toddlers. I suspect student loan will hamper any efforts to get bigger house and *we have no cash left at end of each month*. Should have about 40,000 in my hand this year from Irish inheritance - to keep it in savings or to pay a chunk off the loan? Foreign property and accumulating rental income will come when the relevant court transfers deeds - can take a while - so am leaving that out of the equation. (Am under the 225k limit for inheritance tax by the way).
*Can anyone see how to make our money work better for us?*
I was recently refused a Tesco credit card - CRIF 3 rating of 502 on my ICB account.
*Do we need income protection/illness protection/increased pension pots etc?*
I should add, our aim is to have a good time and live in the now, but we need to be a bit practical I suppose.

*Many thanks. Siobhan*


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## bcol1 (18 Feb 2016)

First thing is to get yourself sorted with everything on a spreadsheet, as to me there is something missing. You say you have no travel expenses, so no travel tickets, cars, insurance etc? I'm calculating total expenditure = 3,796 euros per month. So where's the other 1,600 euro going?

*Monthly take-home pay:* about 5,400

Mortgage @ 248 per week = 1,075 month

Student loan @ 275 per week = 1,192 month

Pensions combined = 150 month

Savings towards wedding = 250 month

Groceries = 400

Socialising & Clothes = 300 month

Monthly bills = 379 month (Sky 65 euro, Health 67 euro, life and house assurance 80 euro, phone 42 euro, electricity & gas 100, Spotify & Netflix 25 euro)

BOI bank charges = 50 month

I'm calculating total expenditure = 3,796 euros per month

So where's the other 1,600 euro going?


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## Clara16 (18 Feb 2016)

its €300 a week on stuff not monthly from experience you need to keep a spend diary on this


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## PaddyW (18 Feb 2016)

bcol1 said:


> First thing is to get yourself sorted with everything on a spreadsheet, as to me there is something missing. You say you have no travel expenses, so no travel tickets, cars, insurance etc? I'm calculating total expenditure = 3,796 euros per month. So where's the other 1,600 euro going?
> 
> *Monthly take-home pay:* about 5,400
> 
> ...



Hi BCOL, savings towards wedding is per week rather than month, same for socialising so €1084 and €1300 respectively


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## bcol1 (18 Feb 2016)

Thanks PaddyW. A lot of socialising happening so


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## bcol1 (18 Feb 2016)

*Monthly take-home pay:* about 5,400

Mortgage @ 248 per week = 1,075 month

Student loan @ 275 per week = 1,192 month

Pensions combined = 150 month

Savings towards wedding = 1,084 month

Groceries = 400

Socialising & Clothes = 1,300 month

Monthly bills = 379 month (Sky 65 euro, Health 67 euro, life and house assurance 80 euro, phone 42 euro, electricity & gas 100, Spotify & Netflix 25 euro)

BOI bank charges = 50 month

I'm calculating total expenditure = 5,630 euros per month (thanks to Paddy for pointing out my error above)

If i was you, i would definitely use your 40k inheritance to clear your student loan, and also look at other areas of spending where you could make cuts (Socialising & clothes 1,300 is a lot, also groceries just for 2 of you at 400 euro seems high, also sort of your bank account fees), and use the funds to pay off your loan sooner. As long as you have that personal loan, it's going to restrict your ability to trade up to a bigger house, and if kids come along, you'll have childcare expenses too that will restrict you even more. 

Your salaries are great and it's easy to live life now when you're young and child free and you are dead right to do so, just would try and tackle that loan now while you can.


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## siobhank83 (18 Feb 2016)

Thanks... that's what I was thinking. Himself wants to hang onto the 40k for future mortgage deposit but I reckon you're right; no point having a huge debt and 40k side by side. Problem is then should I maintain the same amount 275 per week or keep the 7 year term and pay 180 a week or so instead. I guess I should clear it ASAP.
Going to start keeping an Excel and cutting back on the discretionary spending. I kinda knew the bad news would be to cut back on that!
All this aside, I have cousins with two and three kids making less than half what we make and I just don't know how they do it. I suppose my loan is a big debt but I can't see us being able to afford having kids at the moment - we need to start good habits first.


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## Steven Barrett (18 Feb 2016)

Hi Siobhan 

If the money is sitting in your account, you will spend it. No one ever saves what is left at the end of the month. You need to automate your savings, set up a standing order and have a fixed amount go out the day after you get paid. 

It's no problem living in the now but if you go through your bank statements, you will probably see money spent on rubbish. Good financial planning is realising that you have a finite earning capacity. You need to accumulate wealth in that period so you can spend it on experiences that will be memorable to you both. I'm not just talking about retirement, which is a long way off for the two of you, there's a lot of living to go on before then. As you ability to earn is your greatest asset at the moment, you need to protect that too in case you are unable to work. It's boring but important. 

Start with a spreadsheet on what you spend all your money on each month. It will be an eye opener. 


Steven
www.bluewaterfp.ie


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## bcol1 (18 Feb 2016)

And don't worry about not being able to afford kids, cos hand in hand with kids goes a huge reduction in socialising , you'll swap all those nights out and new clothes for creche fees


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## mathepac (18 Feb 2016)

It looks like neither of you have cars, or at least there is no car-related expenditure - loans, fuel, insurance, tax, parking, maintenance.

The spreadsheet is a good idea BUT to get to that stage you will need to become anal about getting, keeping, categorising and retaining RECEIPTS. If you get coffee or park the car for an hour, GET A RECEIPT! If you go to the pub, get receipts and depress yourself adding up the receipts the following morning. Update your spreadsheet(s) daily, you will need more than one. Unless you capture expenditure as it happens I can guarantee you you will be left with unexplained gaps in your memory and in your budget. That's the another trick - set budgets for booze, food, lunches at work, etc. Guess what you're spending at the start and prepare yourself for the shocks as you progress, hopefully at least some of them will be good.

Start out by accounting for all current balances, cash, bank accounts, credit cards, credit union, post office and make sure you track flows between them e.g. 100 quid out of the ATM is 100 quid into the cash account.

HTH


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## siobhank83 (18 Feb 2016)

Yes he has car with petrol, tax, insurance  etc paid by work and I walk to work; similarly his phone and health insurance are paid by work so luckily fewer expenses than most. Also we bring lunch to work (if we get lunch!) so that's not an expense.
The receipts are a good idea. We are terrible for just using the card here and there (hence I have applied to move to KBC current account) and not thinking of how things add up. Maybe using 200 quid cash per week and sticking to it would be better. E.g. husband-to-be just returned from Spar with a 5 euro tube of toothpaste....


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## Boyd (18 Feb 2016)

What happened to "Lidl all the way"?! Biggest issue is spending 1300 per month on unknown expenses. I would immediately set up a standing order for 1000 per month into EBS 3% 1 year fixed regular saver. This way your cash is gone straight away and you have no chance to spend it. This will hurt but still leave you with 300 quid ad hoc spending money after all other bills, food etc are paid.
As someone else said, 400 per month on food (especially in lidl) seems like an awful lot for two people. Should be closer to half that in my opinion.
That's where I'd start anyway.


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## PGF2016 (19 Feb 2016)

My advice... I don't see any point in collecting receipts and it sounds like a headache. You seem to know where your money is going. 

With BOI you need to maintain 3000 in your account to avoid charges. With KBC you have to deposit 2500 per month into a current account to avoid charges. Switch to KBC and avail of their better terms and savings rates. They also do a credit card that offers 1% cash back on grocery shopping. Free money if you're disciplined in paying it off. 

300 a week on clothes and entertainment seems like a lot. As soon as you get paid put 100 of that into savings. You should be able to entertain yourself on 200 euro per week (more than a dole payment!).

Limit your opportunity to spend money. Make a list and do all your shopping once a week. Hopefully this will save you heading to Spar midweek and picking up expensive toothpaste. 

Hope this helps.


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## thedaddyman (19 Feb 2016)

Start with your tax, are your set up in the best possible way. Have you claimed for everything you can claim for, lots of people forget about health expenses for example

Agree with other poster on the €40k, reduce your debt

Sorry to be a killjoy but you are spending far too much on clothes and entertainment. If you want to get your affairs in order, that needs to be cut significantly.


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## Cervelo (19 Feb 2016)

mathepac said:


> It looks like neither of you have cars, or at least there is no car-related expenditure - loans, fuel, insurance, tax, parking, maintenance.
> 
> The spreadsheet is a good idea BUT to get to that stage you will need to become anal about getting, keeping, categorising and retaining RECEIPTS. If you get coffee or park the car for an hour, GET A RECEIPT! If you go to the pub, get receipts and depress yourself adding up the receipts the following morning. Update your spreadsheet(s) daily, you will need more than one. Unless you capture expenditure as it happens I can guarantee you you will be left with unexplained gaps in your memory and in your budget. That's the another trick - set budgets for booze, food, lunches at work, etc. Guess what you're spending at the start and prepare yourself for the shocks as you progress, hopefully at least some of them will be good.
> 
> ...




I cant agree more with this more, in fact I would say the spreadsheet is the first and the most important thing for both of you to do because until you can actually know where you are spending your money you wont be able to make proper decisions.


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## 44brendan (19 Feb 2016)

PGF2016 said:


> My advice... I don't see any point in collecting receipts and it sounds like a headache.


I would totally go along with this for "casual expenditure". The most efficient way of controlling this is to set a weekly limit and take out that amount in cash each week. Up to you what you spend the cash on but if you go back to the ATM then you need to either justify your extra expenditure as being within another budgeted category or revise your figures. I.e. No point in fooling yourself that casual spending is €100 pw when in reality it is near €200. What doesn't get measured doesn't get done.


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## mathepac (19 Feb 2016)

The OP cannot explain where all the money is going and until such time as she gets a handle on this, the very notion of "casual expenditure" is ridiculous. Unless and until all expenditure is accounted for, all spending is a serious matter.


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## siobhank83 (19 Feb 2016)

Thanks all for very sensible replies. You are all correct in that, yes, I haven't a clue where the money is going and I need to reign in the spending. I gave Himself some dressing-down for the impulse toothpaste buy!
Good news today coincidentally that I am now getting a 10k pay rise so instead of going on a mad one to celebrate we are treating ourselves to takeaway and that's it! We have agreed 200 cash per week for casual spending. I have a feeling it will not be as 'casual' as previously.
Many thanks again.


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## moneybox (19 Feb 2016)

siobhank83 said:


> Good news today coincidentally that I am now getting a 10k pay rise



Good on you Siobhan, plenty of funds now to have a grand wedding and equally enjoyable honeymoon. Wishing you a prosperous and happy future


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## Monbretia (19 Feb 2016)

I'd be going into lockdown for a while until you get control.  Even 200 a week for casual spending is a lot, or maybe that's just me showing my age!  I'd live on that much in total for a week.


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## Cervelo (19 Feb 2016)

siobhank83 said:


> Good news today coincidentally that I am now getting a 10k pay rise so instead of going on a mad one to celebrate we are treating ourselves to takeaway and that's it.



Well done you, enjoy the takeaway but don't forget to put it in your spreadsheet


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## gianni (19 Feb 2016)

siobhank83 said:


> Good news today coincidentally that I am now getting a 10k pay rise...



Are you sure you're a public sector worker?


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## Marion (19 Feb 2016)

gianni said:


> Are you sure you're a public sector worker?



I'd say a promotion?

Marion


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## Boyd (19 Feb 2016)

Monbretia said:


> I'd be going into lockdown for a while until you get control.  Even 200 a week for casual spending is a lot, or maybe that's just me showing my age!  I'd live on that much in total for a week.


.

Agreed. E200 per week or E800-1000 per month it's crazy spending. It's hard to take someone seriously when saying they have no money left at end of month when they're freely admitting to blowing this much per week on unknown spending!


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## gianni (20 Feb 2016)

Marion said:


> I'd say a promotion?
> 
> Marion



Maybe the public sector in Saudi?


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## siobhank83 (20 Feb 2016)

It's interesting to hear that most think 200-300 per week is crazy spending. I am looking forward to examining our receipts and so on to categorise things. E.g. last week we were passing Woodies and decided to get paint and rollers and paint the hallway. So that was 100 euro. Maybe we should have a small household fund etc for such things. I would put a few things on Amazon and ASOS frequently too which I need to cut out.
I am a public sector worker; I passed exams which puts me on a higher increment - being the public sector it will take months to get it but it will be back paid. And I took out a loan of over 100k to get my current job so I always think of my job as 'costing' me 275 euro per week til that loan is paid off. I made it my business to do the exam ASAP to increase my income. 54,000 at the moment as as per my p60; includes quite a bit of overtime.


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## moneybox (20 Feb 2016)

siobhank83 said:


> And I took out a loan of over 100k to get my current job



Was the loan of 100k for educational purposes?  It's a huge sum.


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## siobhank83 (20 Feb 2016)

Yes - 25k per year for four years, 13k for fees and 12k for living expenses. Getting approved for a mortgage together with that loan hanging over me was a huge struggle. Others who have it and aren't in a two-income household can't manage it and most have had to emigrate for better salaries.


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## Cervelo (20 Feb 2016)

siobhank83 said:


> It's interesting to hear that most think 200-300 per week is crazy spending.


 I wouldn't agree that it is crazy spending, I would agree that it is crazy that you don't know what you are spending your money on. I think we would all agree if you went out one night a week for a meal with friends and then the pub and or nightclub you probably wouldn't see much change out of 200.
You're both young, both on relatively good salaries paying all your bills/loans and saving, I would agree with you "live in the now" but keep an eye out for the future which I think you are doing anyhow.


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## Fella (20 Feb 2016)

I don't think you should be tight just for the sake of it , I would never collect receipts or count what i spend each week , I work hard and make a lot of money , I save what's left after I live how I want first . I think it's just a burden having to fill a spreadsheet in for your spending when your on a decent wage , why make life more difficult , chances are your in a job for life and never will go poor so socialise enjoy yourself and don't worry about money , the best thing about having loads of disposal cash is never having to worry about what your spending . if I want something I will buy it i don't worry about it , i dont shop in lidl or aldi I see not having to worry about what I spend been the biggest perk of years of study hard work to get where i am now .


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## Boyd (20 Feb 2016)

I wouldnt agree with the above from Fella. The above definitely reminds me of the famous Charlie McCreevey speech "when I have it I spend it". Im sure lots of people in 2008 thought they were jobs for life and we know that didnt work out. Living "in the now" is perfectly fine to some degree, but some forward planning is always prudent.

I note down what I spend on my phone each week and think its quite handy to know where cash is going. Its not about being "tight" its about being in control. I have no issue with going out to dinner and spending E100 quid or whatever but I want to know that I spent in on dinner and drinks - I dont want to be wondering at end of week why my wallet is empty when I was sure I took out E100 quid on Thursday.

I shop in Lidl and Aldi as they are cheap, have good quality stuff but are also convenient for where I live. I dont think its seen as a downer to "have to resort" to shopping in Lidl and Aldi (as it once was). Its a choice, not a necessity. Just because someone earns good money doesnt mean they wont be poor due to bad money management which is exactly the problem the OP is facing. Hence, telling them to buy whatever and dont worry about it doesnt really sound like good advice to me.


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## Frank Underwood (20 Feb 2016)

Hi Siobhan,

Based on what you have posted I think your focus should be getting that student loan down. When you get your pay raise put all the increase in wages into the loan. I would do the following also. For 6-8 months of the year I would live very frugally and save every penny I can for the next 2-3 years. For the other months spend a bit more, go out etcetera. We are expecting our first children, the costs associated with having babies are not cheap. There is going private with doc, buying all the stuff that comes with babies, saving for their education, paying for childcare, having no income if you take unpaid mat leave. We are expecting twins but are lucky that we had all debts cleared and have very good savings. When you get the 40k I would hold back 10k, I personally hate being without some savings. Best of luck with it all.


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## gnf_ireland (5 Apr 2016)

Hi Siobhan,
I have just looked over the thread there and I am somewhere in the middle of the two camps. I have two young kids, and the idea of spending 1200 euro a month on socialising would frighten me senseless right now ! Not so much from the spending, but from the recovery time 

That said, you are both at a milestone in your lives, and your lives will probably change a bit over the next while in any event. You also like the idea of having kids (which is not cheap as many said) and also want to upgrade the house (potentially). All of these cost money, and this will all need to come from your earnings (or inheritances) ultimately.

Instead of looking at things like socialising from a weekly budget, try moving it to a monthly budget instead. Try using cards, including contractless, for most of your transactions (once you move towards a more fee friendly bank), so its easier to track and categorise them. I am not a fan of keeping every receipt, but using contactless (for a period) will at least show you where the funds are doing.

Why not half your socialising budget, by adopting a week on/week off approach to it - so every second week is a quiet one - watch a movie at home or go for a walk etc. It still gives you 2 decent nights out each month. Call it 'part of your settling down' phase  

Most of the rest of the stuff can be tackled, but I would agree to reduce your debts as quickly as possible - any overpayment wil have large benefits in terms of interest paid on the money. I imagine you are paying ~4% on the loan given 7 years/275 a week/87k. If you were to divert 500 a month from your socialising budget towards it, you would save 4270 on interest and have it paid 2 year 3 months earlier. Paying 20k of your inheritance against it (in addition to the 500 a month), would give you an interest saving of 7300 and pay it off 3 years/5 months earlier. 

I know it may not be the 'cool' thing to do, but remember by the time your loan is paid off at the moment, you will be hitting 40, and hopefully other priorities in life !!

I agree that if you are planning to have children, you should hold back some of your inheritance - probably 10k to cover an extended maternity leave and other incidentals. The other 10k you can put as a reserve fund, which is always good to have. 

Hope this helps and try and have a nice balance between your current outlook on life, with your future plans and reach a happy medium that allows you to plan for your future.


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## trasneoir (16 May 2016)

youneedabudget.com has the best spending diary that I know of. Because it's got a phone app, I can record a spend between the checkout and the exit of the shop.

You are making too much money to have no money. Treat the student loan as a financial emergency and it'll be _gone _by the middle/end of 2017. From that point forward, you'll have an extra 14,300 a year of _after-tax_ cashflow to work with. It'll be worth about three times as much as the 10k raise you just got!


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## boogaloo (12 Jul 2016)

hi Siobhan, just wondering how you have been getting on with this new leaner lifestyle since Feb? Are there any tips/tricks  you could post/things that surprised you the most etc.?


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## siobhank83 (21 Jul 2016)

Hi all
Well, we got married and had a great few months (by that I mean we spent a fortune!)- all the bills are paid so the past month I did up a revised budget to see where we are at.

Net income is now 6300 pm plus any overtime I might do.

I used some inheritance to pay off the loan so now it's at 63,000. I pay 1200 off per month plus divert any of my overtime which is usually 200-600 per month net. (The overtime used to be spent on ASOS!)

I used some more inheritance to start a savings account which is now at 17,000 in the credit union. That's topped up by 1100 per month. The reason we didn't put it all off the loan is that we want to save for a mortgage deposit for a bigger house in a few years.

The alternative is to put ALL that money off the loan, it'll be cleared in under 3 years then but we have no savings at all. If we had a kid or anything we would definitely need to move then. There is about 150k left of inheritance coming but from a foreign country where I couldn't guarantee everything will be sorted by then...

The only cool tip I picked up was to use contactless on the debit card instead of the ATM or cashback! It keeps a great record of all your spending without losing the runaway euros at the bottom of the handbag and only costs 1c per transaction! The Mastercard is paid in full and cut in half - kept only should we need to book something big online.

I'm not sure we can drag ourselves away from the two or three nights out each weekend yet but I'm conscious they might come to an end soon -so the 300 per week is still being squandered I'm afraid.


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