# Need to start saving



## Citygirl (29 Jun 2012)

Hi All,

We find ourselves like the majority of people in Ireland at present where money is really tight.  On paper we look okay but it just doesnt seem the same on our bank statement.

Net Income
Myself           3175.00
Partner          1993.00  presently working 2 p/t jobs I have most of tax relief etc
Child Allow      280.00
Rental Income 950.00   the dreaded rental property
Total             6398.00  Seems like a lot

Mortgages
PPR 480,000.00 at ecb rate +1.45% (At present we are paying capital on 380k and interest only on 100k
Rental Property 168,000.00 fixed at 5.2% paying capital (We have been refused interest only)

Savings        4500.00 bank account & credit union

Credit Cards
2500.00 outstanding

Outgoings - Monthly
PPR Mortgage  1700.00
Rental Mort     1300.00 (this includes life and home insurance)
Credit Card      250.00
Life Insur         120.00 includes serious illness cover
VHI                 155.00
Phone bill         130.00 2 adults and teenager
Light & Heat     220.00 
UPC                 85.00 includes internet
Bins & TV lic      35.00 
Home Ins          65.00  we had a claim 2 years ago
Car Insurance    85.00  2 cars
Car Tax            80.00  2 cars
Petrol              300.00
Food Shopping  610.00 I live in a house with teenage boys they never stop eating
Clothes           100.00 averaging out boys keep on growing
Pet Expenses   40.00  food vet bills boarding kennels
Hair Cuts etc   40.00
School           80.00  School books uniforms reg fees stationery for the year
Total             5295.00

Surplus     1103.33 - never have this I need to start a spending diary

We should have more in our savings but we had some repairs to be done both properties they cleared us out of approximately 3000.00

We should have a surplus each month but it doesnt seem to happen like that and we do not go out for drinks meals etc.  We are looking at getting rid of a car to bring down costs as we could manage with one of us getting the bus.  

I know the phone bills are high but we are in contracts until December I was earning a lot more when we got them.

My main concern is that I would like to increase our savings to feel more secure in case we lost one of our jobs or the ecb increases.

We are in huge negative equity on our PPR but as we dont need to move and are very happy in our home I am trying not to let it upset me but it sinks in every now and again.

Any ideas and what amount of savings would you recommend for a family in our position to have ?

Thank you in advance for any advice you have to offer


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## lucozade (29 Jun 2012)

Hi Citygirl, There's alot more experts than me on most of your bills but I would point out two items where I have some experience. Firstly your UPC if that's right at 85 euro's your overpaying. I have digital TV and internet with them and I pay 40 euros a month.. I rang them up a year or two ago and threatened to cancel and they knocked loads off. Secondly the life assurance you have the extra illness cover attached. I'd be inclined to either get rid of that extra cover or check out the cost of two separate policies.


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## dmos87 (29 Jun 2012)

For the purpose of giving honest advise, can I ask the ages of your teens at home?


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## PaddyW (29 Jun 2012)

lucozade said:


> Hi Citygirl, There's alot more experts than me on most of your bills but I would point out two items where I have some experience. Firstly your UPC if that's right at 85 euro's your overpaying. I have digital TV and internet with them and I pay 40 euros a month.. I rang them up a year or two ago and threatened to cancel and they knocked loads off. Secondly the life assurance you have the extra illness cover attached. I'd be inclined to either get rid of that extra cover or check out the cost of two separate policies.


 
My brother actually did that and said he was going to Sky and he got the price reduced also


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## Citygirl (29 Jun 2012)

Thanks for all the advice I'll get on to UPC and look for a reduction the boys are 15 and 12


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## alexandra123 (30 Jun 2012)

Would you consider - just allowing the landline to only receive incoming calls ? 

Also - your spending 260 a year on waste which works out at about 5 euro a week which is not bad. It costs 3 euro in my location to enter the recycle centre. They take as many bags as you can fit into your car. Would you consider - using this alot more and try and reduce the amount you spend on waste ? I spend about 40 euro a year on waste - thats between me and my 2 dogs  I have 2 bins in the kitchen - one for recycle and one for normal. I have about 6 dif bins in the shed so that I can sort the waste out. I buy a 3 euro yellow bag about once every 2 months or 6 weeks.

Would you cancel the VHI temp until you get back on track. 

Your heat and elec bills are very good.


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## kennyb3 (6 Jul 2012)

I think the obvious thing to do is clear your credit card using some of the savings (then try build them again) and start a spending diary - you've admitted yourself the €1.1k monthly surplus isn't accurate.

How much negative equity is the rental property in?

- You are subsidising that to the tune of 350 each and every month (€4,200 p.a).

- That is before:

 - Repairs
 - NPPR & household charges
 - Other expenses
 - Tax paid on the surplus each year on your tax return.

- Would it be worthwhile getting out now, accepting the loss, paying it down and having one less worry?


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## annR (6 Jul 2012)

>>Phone bill         130.00 2 adults and teenager<<

Is that for mobiles or landline or what?  We have VOIP  phone ( Blueface I think?) over the broadband so we have no landline charges and very cheap phone calls. There is an annual fee (can't remember what) Landline calls in Ireland+UK are free, mobile calls aren't but it runs out of credit which you can then top up. Overall much cheaper.

Can your 12 yr old wear the 15 yr old's hand me downs?

UPC we pay approx E70 but every 2 months - are you sure that E85 is monthly?

Food shopping - this is your biggest expense per month.  There are loads of sites  / advice about cheaper family meals.  Have a good look at what you're buying here.  Cut out / reduce non essentials like Coke, biscuits, takeaways etc  I know it's hard to find the time but can you make more things like shepards pie, stews.  Beans / lentils / chickpeas - so cheap, healthy and filling, you can buy in bulk and use a pressure cooker to cook them really fast and use in things like salads/soups.  Might be a good opportunity to teach your boys how to budget / cook!


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## so-crates (14 Jul 2012)

There is a hole in your pocket clearly. You are spending money somewhere that you are not conscious of so a spending diary (for everyone in the family) is a must. Also do you really need either UPC or Sky? Why not just avail of the free to air? The number and variety of channels available is considerably broader with digital tv.


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## Spear (14 Jul 2012)

Do you really need 2 cars?


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## serotoninsid (14 Jul 2012)

alexandra123 said:


> Also - your spending 260 a year on waste which works out at about 5 euro a week which is not bad. It costs 3 euro in my location to enter the recycle centre. They take as many bags as you can fit into your car. Would you consider - using this alot more and try and reduce the amount you spend on waste ? I spend about 40 euro a year on waste - thats between me and my 2 dogs  I have 2 bins in the kitchen - one for recycle and one for normal. I have about 6 dif bins in the shed so that I can sort the waste out. I buy a 3 euro yellow bag about once every 2 months or 6 weeks.


+1 - Have not paid out anything on waste in the last 6 years.  Recycle everything - and local recycle centre doesn't charge.


			
				Spear said:
			
		

> Do you really need 2 cars?


OP has already ID'ed this as an option to consider.


			
				so-crates said:
			
		

> Also do you really need either UPC or Sky? Why not just avail of the free to air?


+1 - A lot of the time, people spend more of their time viewing the free to air channels anyway.


			
				Citygirl said:
			
		

> Savings 4500.00 bank account & credit union
> Credit Cards
> 2500.00 outstanding


Clear the credit card debt - it's ultra expensive.


			
				Citygirl said:
			
		

> Phone bill 130.00 2 adults and teenager


Substitute where feasible with skype/blueface/voip.


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## Citygirl (25 Jul 2012)

Thank you for all the replies.  

We made the big decision and got rid of one car a couple of weeks and both of us alternate getting the bus to work.  After a couple of weeks of getting the bus cant see why we ever had 2 cars in the first place.  

Our contract is up with UPC at the end of August and we will be changing so we shall be making savings there.  

We are lucky that the ECB reduced their interest rates also so some savings there.  

My job allow you to save through your wages so I have started to put €650.00 a month into this if it is not in my bank account I cant spend it.  

We are starting a meal planner this week and a spend diary to see where else the money goes.  I know most of it goes on the kids money for this especially with the summer holidays


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## Citygirl (13 Sep 2012)

Hi Nicole 
I managed to save 1000 in August but then back to school cleared a good chunk of this and then we had emergency repair work to our house do am back to the start.  But the bright side is I didn't dip into our savings.  I will try and save in September maybe not as much as we need to enjoy life too!!


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## Gaz (14 Sep 2012)

Citygirl said:


> Hi Nicole
> I managed to save 1000 in August but then back to school cleared a good chunk of this and then we had emergency repair work to our house do am back to the start. But the bright side is I didn't dip into our savings. I will try and save in September maybe not as much as we need to enjoy life too!!


 
Well done you appear to be on the right track. You are now saving regularly and beginnning to cut unnecessary costs which are two of the most important steps. 
I would also recommend the following:
1. keep a spending diary and stick to this diligently you will be amazed with what you are spending on the little things,
2. Build your emergency fund to at least 3-6months of expenses as this will cover unexpected emergencies which will undoubtedly happen, 
3. You need to get the level of debt down on both the CC and mortgages as both are really the big ticket costs to address. In the short term - cut up the CC and increase your repayments monthly until the balance is cleared. After this I would seriously consider offloading the rental property to reduce your overall debt and improve your cash flow each month. 

Finally, I would recommend reading The Total Money Makeover by Dave Ramsey as the advice is simple to implement and very effective. I really think if you both stick to the simple methods in 6-12months you will be in a much better place. Good luck!


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## Janet (14 Sep 2012)

Love to hear updates like this.  

One important thing, in my opinion, is to make sure your kids know what is going on with money, why you're trying to save, how you're doing it and that kind of thing.  They're old enough to be making their own contributions, e.g. by making sure not to leave every light in the house on, television/stereo/computer/playstation all going at the same time all the time, by each having a budget for clothes every year and being allowed to choose what they want but knowing that's it.  I read quite a few personal finance blogs and making sure the whole family is involved really seems to be one of the key issues.  And that would certainly be borne out by the way I see my sisters dealing with financial questions and issues with their kids.


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## Citygirl (14 Sep 2012)

Gaz

I wish I could get rid of the rental property it is the noose around our neck but due to an ongoing court case with the builder it is impossible.  So we have to stick with it and hopefully one day we wont regret buying it.

We only decided this week that we are going to save less the next couple of months and put this extra money off the credit card.  The limit is being reduced to 1500.00 then.

I will have a look at for that book thanks for the tip.

Janet,  I have ocd with turning off lights etc and am trying to instill this into the children.  We have discussed with the children that we are trying to save to have a safety net and for college and cut backs are being made and they seem to understand for the moment.

Fingers crossed this time next year we are in a better financial position.  Thanks to everyone who commented.


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## so-crates (14 Sep 2012)

Well done citygirl, your story is the sort of inspiration that can help others because you make it sound so achievable.


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## Billy Elliot (7 Oct 2012)

> Finally, I would recommend reading The Total Money Makeover by Dave Ramsey as the advice is simple to implement and very effective.



Plus one. There is some US specific investment advice and tax advice but the fundamentals of that book are excellent.


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