# Where to go from here im confused?



## johnycash (28 Jan 2012)

Age: 32
Spouse’s/Partner's age: 27

Annual Net income from employment or profession :€33,000
Annual Net income of spouse:€20,000

In general are you spending more than you earn or are you saving? Saving

Rough estimate of value of home €0 Renting 2 Bedroom apartment
Amount outstanding on your mortgage: €0
What interest rate are you paying? €0      €550 a month rent



Other borrowings – car loans/personal loans etc - None

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:
€60K Savings (3 Accounts)

Do you have a pension scheme? Yes 

Do you own any investment or other property? No

Ages of children: None

Life insurance: No


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

We feel that we are squirling away a huge chunk of our income around 1,600 a month. Our financial plan is very longterm save for our own house and have a small mortgage and eventually have mortgage freedom and having enough put aside for when we have children possibly next year or two. Short-term this leaves us very little room for luxuries but we do go away in ireland for most bank holiday weekends and we do Holiday in Thailand for 3 weeks once a year. We would appreciate the perspective of those 10-15 years ahead of us, perhaps with teenage children who could give us the benefit of hindsight. Are we trying to do too much too soon or are we just being sensible giving the changing climate. I am just struggling a bit to figure out am i doing the right thing with my 60,000 and is there something i should be doing should i buy a house now etc im just confused of my next steps.


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## Jim2007 (28 Jan 2012)

Well I'd challenge the need to own your own house???  The Swiss view would be that you should rent a place that is suitable for your needs at the time - a small place to start of with, then something larger for the kids and back to something small again after the kids leave home.  A large place involves a lot of work, especially if there is only two of you and you are retired.  Then there is the financial aspects, again the Swiss would consider it very silly to place all your savings in one one asset and then add borrowings on top of it, with the risk that it might easily be worth less when you go to sell it, if you even can sell it... this is actually a common view in mainland Europe.

If I was you I would go on renting, even after the kids come along and continue to build up a savings fund for as long as you find something suitable to rent.  You can always use the fund to cover the kids education, as a deposit on a property if needed, retire earlier or whatever.

I know it's not the common view, but then look at all the people who have been left in financial difficulties by following the common view in both this and other housing bubbles.  You know most Europeans might be described as being "concerned" about the economy, but they are not in financial difficulties like here!


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## johnycash (28 Jan 2012)

Jim i think this is very sound advice and very similar to my own way of thinking that you for your input i really appreciate it


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## Bronte (30 Jan 2012)

There is a bit of a difference though with mainland Europe in relation to renting, it's a long term plan, there is security of tenure, it's a very stable well regulated market (in general) etc.


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## spreadsheet (30 Jan 2012)

Hi Johnycash

In my opinion you are doing the right thing.

Nobody can predict the future, but with any luck most of us will be old some day. I believe the best thing you can do for your future self as an old person is to own your own home outright.

You have the energy and capacity to contribute to that now. The window of opportunity will close later in your life. 

The debate can go on and on about renting vs ownership but for the moment, Ireland isn't Switzerland and I wouldn't like to be old and renting in Ireland.

Spreadsheet.


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## johnycash (30 Jan 2012)

Hi mate thanks for the feedback one thing i forgot to mention is i am an only child and an only grandchild on my fathers side so will deffo be inheriting one house and there is a strong possibility i might inherit two so maybe i would be better off renting and saving hard and not buying a house at all what does the rest of the posters think??


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## spreadsheet (30 Jan 2012)

johnycash said:


> Hi mate thanks for the feedback one thing i forgot to mention is i am an only child and an only grandchild on my fathers side so will deffo be inheriting one house and there is a strong possibility i might inherit two so maybe i would be better off renting and saving hard and not buying a house at all what does the rest of the posters think??



No, you should exert control over your own life. Don't rely on inheritances. Anything could happen with those houses. 
Keep saving!


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## johnycash (30 Jan 2012)

Hi mate ya im going to keep saving but im not sure which is the best thing to do stay renting our buying a house buying a house may wipe out my savings for no reason


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## PaddyBloggit (30 Jan 2012)

rent .... you may be left houses in years to come. If necesary, you can sell them to buy/build your dream home ... and still keep your savings intact for now!


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## Bronte (31 Jan 2012)

You cannot rely on an assumption of an inheritance.  That 'inheritance' may go to someone else or may be swallowed up by health care/old age costs.


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## annR (31 Jan 2012)

>>Short-term this leaves us very little room for luxuries but we do go  away in ireland for most bank holiday weekends and we do Holiday in  Thailand for 3 weeks once a year<<

Well to be honest I think that if you need more luxuries you could always scale back on the holidays a bit.  I think you're right to be saving especially if you are thinking of having kids.  You will need long term savings no matter what way you look at it. Indeed because of economic climate, you may need short term/rainy day money for emergencies/unemployment.  You sound to me like you are feeling like you have to do something with the money because it's there.  However you don't say when you are thinking of having kids, if you want to have them in the area you are in, or if you would have to move etc.  Perhaps whenever you decide to start a family would be a good time to look at whether to be buying or renting.  Of course talking about buying a house presumes that you have the deposit / would even get a mortgage.  You mightn't be at that point yet and that would be the question answered for you already.


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## Macstuff (1 Feb 2012)

In relation to the buying vs renting question, I don't think it's relevant to compare renting in Ireland Vs renting in mainland europe. 
Generally speaking, renters in mainland europe are able to get multiyear leases and are protected from large increases in their rents (i.e. rents can only increase in line with the cost of living). 
Renters have NONE of those protections in Ireland. 
During the "boom" a landlord was likely to increase rent every 12 months and some only offered 6 month contracts in order to increase the frequency of rental increases. Equally landlords can evict you MUCH faster here than in mainland europe. 
At the moment, tenants can find great homes at decent prices and are pretty sure that their landlord will renew the lease on favorable terms but that will change over time.
I am sure if our govt. had to make the tenancy laws more similiar to those in mainland europe then our housing bubble would not have gotten so big. 

On a broader level I would advise the OP to continue with the savings habit but make sure to 'live for now'. I got this advice here on AAM some time ago and felt it made perfect sense. 
Don't go mad, keep saving what you can, but make sure that you don't let your life pass you by. Have a few more luxaries, you are in a very strong position ie good salaries and great savings. Enjoy them and the here and now.
Don't put your life on hold, waiting for an inheritance, it may / may not come or it may be seriously dilutated due to having to pay for medical bills / taxes on inheritance (ie if the rules around this changed)...


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## johnycash (1 Feb 2012)

Thanks for the feedback all i think i will just keep renting and saving the wifes job is not guaranteed at all and will be gone for sure in another 12 months or so to have children


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