# Financial Advice after house purchase



## burger1979 (13 Jan 2009)

Age: 29
Spouse’s/Partner's age: 28

Annual gross income from employment or profession: €44,505
Annual gross income of spouse: €45,000

Type of employment: e.g. Civil Servant, self-employed: I work in private sector, wife works in Trinity college

In general are you:
(a) spending more than you earn, or
(b) saving?

Saving (I think)

Rough estimate of value of home: bought for 412K in sept 08 probably worth less now
Amount outstanding on your mortgage: 379K
*What interest rate are you paying? 5.2% fixed till sept 2011*

Other borrowings – car loans/personal loans etc I have a car loan 14K left.

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: 

Credit union 4K
House current account 2.5K

Do you have a pension scheme? No but will be starting one soon (in the next 3 months) both of us will

Do you own any investment or other property? no

Ages of children: none

Life insurance: life insurance to cover the mortgage, also payment protection scheme should one of us get ill or lose job.


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

House Monthly outgoings (per month)

Food €250
Sky €57
Eircom €60.00 (phone and broadband)
Elec €80 (budget figure only, hae only gotten one bill so far for €85.00)
Gas €120 (budget figure only, have not gotten a bill yet but one due soon)
Bins €28
Mortgage €1550.77
life insurance €34.40
Mortgage Payment Protection €93.53

We both put €1500 into the house account every month to cover the mortgage payments and bills. Any excess that is left over is left in the account and we use this money to decorate/re-furbish house. 

Personal Spending (per month)

Savings €300.00 (we roughly save this per month after we have paid into the house account)
VHI €70 (my wife only, I am going to start a plan soon)
Car loan €250.00 (me only)
Social €100.00 each
Mobile Phone – Me €30.00
Mobile Phone – Wife €25.00

Pension (although not started yet budget only for now) €150.00 per month, each.

Basically I am looking for advice on our financial situation. Our house deposit and furnishing the house pretty much cleared our savings in September and we only have a bit left. From the short time that we have been living in the house and paying bills/mortgage etc we have never found ourselves to be short (we have even managed to pay for a skiing holiday out of the money that’s left over). After we bought the house we let our hair down a bit and splurged on some items and nights out (we got married in september too). Nothing fancy was spent on but we felt that after saving for so long getting the deposit for house and wedding and then furnishing the house we would ‘enjoy’ the house for the first few months. 

So in peoples eyes there are we doing ok? 

Thanks in advance for the replies

Burger1979


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## jimbobman (13 Jan 2009)

Mortgage Payment Protection €93.53   - i would cancel this. these schemes never pay out if you lose your job. if one of ye is working then they wont pay out. if both of ye lose your jobs then they wont pay out if mcdonalds are looking for people , its money for nothing

VHI for 70 a month?? my god what does that cover, no need for that either. 

ye are putting 3000 into the house account and each month should only take 2k. you cant be spending 1000 a month still doing it up!!!! if not then put that 1k in a high interest savings account


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## anon473 (13 Jan 2009)

Is your wife eligible for TCD's DB pension scheme. Its pretty good.
as to how you are doing - it all depends on how at ease you are with your situation. Looking at your details there are a few points on the budget that you should look at. I wouldnt pay €57 per month for sky but thats a personal choice.
Food budget sounds low to me for 2 people.
No mention of car insurance, tax, fuel bills - these can be significant
I found that every month there was some exceptional cost that i had forgotten about (TV licence, train tickets, bike repairs) - so you should try to budget for those.

Try a spending diary just to make sure that you arent leeching money into some unaccounted for black hole
anon473


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## burger1979 (14 Jan 2009)

jimbobman said:


> Mortgage Payment Protection €93.53 - i would cancel this. these schemes never pay out if you lose your job. if one of ye is working then they wont pay out. if both of ye lose your jobs then they wont pay out if mcdonalds are looking for people , its money for nothing
> 
> VHI for 70 a month?? my god what does that cover, no need for that either.
> 
> ye are putting 3000 into the house account and each month should only take 2k. you cant be spending 1000 a month still doing it up!!!! if not then put that 1k in a high interest savings account


 

Hi Jimbobman, the mortgage payment protection plan was something we took out as both of were working in construction when we got the mortgage and of course we were trying to cover ourselves if one of us was let go. its a bit of an expense per month alright and one i will be reviewing next September when due for renewal. The VHI is my wifes plan and includes dental i agree that the cost is high but unfortunately we do not have a public health service that i have confidence in to get seen to quickly or have an opearation done quickly. I think its a necessary evil. your right we are not spending 1K a month doing the house up, we are saving for the moment to get some more items done to the house in the next 6 months (carpets, stove for the living rooms, ensuite done up etc. etc.) after these items are done by the middle of this year then we will have to look at putting the monthly excess (or part of it into a high interest account) thanks for the reply.

Anon473: My wife will be starting the role in Trinity next month and she has a pension plan descibed in her contract but she has yet to go through the details of it yet. We are both at ease in our situation at the moment in terms of our finances, we have no major worries just wanted other peoples opinions. About the Sky, well we cant get NTL where we live (navan) and that price if for Sky+ including all the sports channels. We hesitated for a while about getting the sports but since we both like to watch alot of sports, wife watches rugby with her dad, i watch soccer, NFL, Golf etc. etc so i dont see it as something that although we pay for we dont use. In saying that though when the contract is up i will be reviewing it again to see what better deal i can get. the food budget is based on an average over the last 4 months. we shop in aldi/lidl and we dotn usually have dinners in the evenings as we are out of the house mostly sports training during the week. so just something small after that, this leaves us with only about 3-4 days a week for dinners. Car costs well here goes for me:

Monthly fuel €250 per month
Car Tax €710 per year
Insurance €1020.00 per year

Wife Fuel €200 per month
Tax and insurance have no idea but i would say about €800-€900 per year for the two. My wife when she starts workign in trinity is going to go for one of those annual CIE tickets. apprantly they only cost €90 per month (or so her friend told her) but this still have to be verified. I keep a spendinig diary of what goes in and out of the hosue account and what it is spent on and we are doing up a personal spending diary for the next few months to see where personal expenditure is going too.

Thanks for the replies.

burger1979


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## Bronte (14 Jan 2009)

If you want to increase your savings (which I think you should, especially if kids are planned) you can look at the following: Sky, get free to air instead, 3 phones for 2 people, is this necessary, mortgage protection policy (I agee with Jimbobman), keep an eye on the utility bills until you've been there a couple of years and know exactly how much they will cost, I recommend reading the meters a couple of times a year so you get no nasty surprises.  Watch interest rates, if fixed rates come down it may be worthwhile breaking your fixed rate for something lower.  As you asked ye are doing fine.  Well done.


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## jimbobman (14 Jan 2009)

yeah . meant to say well done also. ye are in much better shape than most people but the mortgage protection needs to be cancelled . as far as i know you dont have wait a year etc, you can just send a letter now. its a joke, they just wont pay out . with your partner in trinity her job is probably safe so no way will they pay out. 

with regard to health insurance, i have found that people paying insurance get no better treatment at all in hospitals. i have several friends who pay 2k per year to vhi but have their babies public as they get better treatment!!!!

i also agree you about sky. i have a very tight budget but sky sports is a must


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## PaddyW (14 Jan 2009)

Definitely get rid of the mortgage protection. Cancel your DD today and ring the company to let them know you're discontinuing it. As jimbob said, your wife's job seems pretty safe, so doubtful the company will ever pay out while she's in employment there.

Other than that, you're not too bad in all honesty. Much healthier than most are now! Good job.


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## niceoneted (15 Jan 2009)

I would seriously look at the difference in interest payments between continuing to pay the fixed rate and moving on to a variable rate - especially with talks of interest rates to fall further. I know the banks impose penalties but it might be worth paying it. Also you could negotiate them not charging it or reducing it. I know someone who did this before. I'm sure your mortgage is for a considerable no of yrs and you could say you'll stay with the bank. They wouldn't want to lose the business. 
Well done on what your at. I would concur with others re mortgage protection payment. SKy is high but I get what you say about it and it's not as if your struggling. The land line and broadband is high. I pay 45 a month with BT and get all landline calls up to 60mins to Ire and UK included. Suits as have family in UK. 

Good luck.


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## burger1979 (15 Jan 2009)

niceoneted said:


> I would seriously look at the difference in interest payments between continuing to pay the fixed rate and moving on to a variable rate - especially with talks of interest rates to fall further. I know the banks impose penalties but it might be worth paying it. Also you could negotiate them not charging it or reducing it. I know someone who did this before. I'm sure your mortgage is for a considerable no of yrs and you could say you'll stay with the bank. They wouldn't want to lose the business.
> Well done on what your at. I would concur with others re mortgage protection payment. SKy is high but I get what you say about it and it's not as if your struggling. The land line and broadband is high. I pay 45 a month with BT and get all landline calls up to 60mins to Ire and UK included. Suits as have family in UK.
> 
> Good luck.


 
Hi folks,

i have enquired about getting the fixed rate down and AIB said that they will send me out a letter about how much it is going to cost me to breakout of the existing and take a lower rate. will work out then if its going to be worth it. as for the phone and broadband when we got the house there was a line but no connection and we had to get an eircom line in. i rang around other providers but since we didnt have an active line already then they could not provide the phone/broadband that we wanted to get it. am going to look into the mortgage payment thing a bit more.

thanks for all the replies

burger1979


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## mro (15 Jan 2009)

burger1979 said:


> Rough estimate of value of home: bought for 412K in sept 08 probably worth less now
> Amount outstanding on your mortgage: 379K
> *What interest rate are you paying? 5.2% fixed till sept 2011*
> 
> ...




Just wondering how is you mortgage payment so low? I have a similar amount outstanding (approx 390000) and have a tracker + .75 (so my last repayment would have been @ 3.25 )and my replayments are appros 1700. 
Using Karl Jeacle at your interest rate the same amount would have a replayment of over 2K. My term is 30years even changing that to 35years dosnet make that much of a difference.
Maybe i'm missing something. Could anyone enlighten me?

Edit to say : my term started early 07 and changing that in the the calculater that dosent make much of a difference either


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## MikeLavelle (15 Jan 2009)

Hi Burger1979!
I have underlined and capped (i hope you don't mind) what I  reckon you need to change to save you money. If you want give me a  
call (087-8180521) on this, if what i say interests you.  i AM A DIRECTOR OF L.I.F.E. Ireland and would be more than 
willing to do a full financial review for you for free.  Our website is [broken link removed] 
Cheers,
Mike 


Food €250 ALL I CAN SAY IS CHANGE  WHERE YOU SHOP. I WORK OFF €150 A MONTH AND THAT INCLUDS LUNCH 
Sky  €57     
Eircom €60.00  (CHANGE PROVIDED. MAGNET OFFER €40 BROADBAND AND  PHONE)
Elec €80  (RING ESB WITH MONTHLY METER READING AS THIS WAY YOUR BILL WILL BE  ACCURATE)
Gas  €120 (SAME AS ABOVE)
Bins €280
Mortgage €1550.77 (YOU CAN'T CHANGE THAT NOW IF YOU ARE FIXED UNTIL  2011 UNLESS YOU WANT TO PAY A PENALTY OF 6 MONTH  INTEREST)
life  insurance €34.40 (COULD GET YOU A BETTER FIGURE)
Mortgage Payment Protection €93.53 (AS  YOUR WIFE IS SELF EMPLOYED THAT MIGHT BE NEEDED BUT THERE ARE BETTER OPTIONS OUT  THERE)

Personal Spending (per  month)

Savings  €300.00 (BETTER YIELDING FUNDS OUT THERE IF YOU ARE  INTERESTED)
VHI  €70 (TOTAL RIP OFF. WE OFFER HIBERNIAN WHICH IS MUCH  CHEAPER)
Car loan  €250.00 (me only) (CAN BE FINANCED TO MAKE THE PAYMENTS  EASIER)
Social  €100.00 each (YOU NEED MORE THAN THAT FOR BOTH OF YOU TO LIVE LIFE EACH  MONTH)
Mobile  Phone – Me €30.00 (WE HAVE AN INFINITY SCHEME WITH ONE OF THE LARGEST MOBILE  PHONE COMPANIES THAT COULD SAY YOU BOTH MONEY)
Mobile Phone – Wife €25.00 (WE HAVE AN  INFINITY SCHEME WITH ONE OF THE LARGEST MOBILE PHONE COMPANIES THAT COULD SAY  YOU BOTH MONEY)


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## MikeLavelle (15 Jan 2009)

Hi Burger1979!
I have underlined and capped (i hope you don't mind) what I  reckon you need to change to save you money. If you want give me a  
call (087-8180521) on this, if what i say interests you.  i AM A DIRECTOR OF L.I.F.E. Ireland and would be more than 
willing to do a full financial review for you for free.  Our website is [broken link removed] 
Cheers,
Mike 


Food €250 ALL I CAN SAY IS CHANGE  WHERE YOU SHOP. I WORK OFF €150 A MONTH AND THAT INCLUDS LUNCH 
Sky  €57     
Eircom €60.00  (CHANGE PROVIDED. MAGNET OFFER €40 BROADBAND AND  PHONE)
Elec €80  (RING ESB WITH MONTHLY METER READING AS THIS WAY YOUR BILL WILL BE  ACCURATE)
Gas  €120 (SAME AS ABOVE)
Bins €280
Mortgage €1550.77 (YOU CAN'T CHANGE THAT NOW IF YOU ARE FIXED UNTIL  2011 UNLESS YOU WANT TO PAY A PENALTY OF 6 MONTH  INTEREST)
life  insurance €34.40 (COULD GET YOU A BETTER FIGURE)
Mortgage Payment Protection €93.53 (AS  YOUR WIFE IS SELF EMPLOYED THAT MIGHT BE NEEDED BUT THERE ARE BETTER OPTIONS OUT  THERE)

Personal Spending (per  month)

Savings  €300.00 (BETTER YIELDING FUNDS OUT THERE IF YOU ARE  INTERESTED)
VHI  €70 (TOTAL RIP OFF. WE OFFER HIBERNIAN WHICH IS MUCH  CHEAPER)
Car loan  €250.00 (me only) (CAN BE FINANCED TO MAKE THE PAYMENTS  EASIER)
Social  €100.00 each (YOU NEED MORE THAN THAT FOR BOTH OF YOU TO LIVE LIFE EACH  MONTH)
Mobile  Phone – Me €30.00 (WE HAVE AN INFINITY SCHEME WITH ONE OF THE LARGEST MOBILE  PHONE COMPANIES THAT COULD SAY YOU BOTH MONEY)
Mobile Phone – Wife €25.00 (WE HAVE AN  INFINITY SCHEME WITH ONE OF THE LARGEST MOBILE PHONE COMPANIES THAT COULD SAY  YOU BOTH MONEY)


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## Pope John 11 (15 Jan 2009)

MikeLavelle said:


> Hi Burger1979!
> I have underlined and capped (i hope you don't mind) what I reckon you need to change to save you money. If you want give me a
> call (087-8180521) on this, if what i say interests you. i AM A DIRECTOR OF L.I.F.E. Ireland and would be more than
> willing to do a full financial review for you for free. Our website is [broken link removed]
> ...


 

Sorry, could you please boldprint or show your text in italics. Uppercase lettering is so hard to read. Also read the posting guidelines please.


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## MikeLavelle (15 Jan 2009)

Sorry my mistake there. 
Thank you for pointing it out to me Pope John 11 
Won't happen again. 
Mike


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