# Advice appreciated on finances.



## pods (19 Jun 2009)

Age: 27
Spouse’s/Partner's age: 27

Annual gross income from employment or profession: 35,000
Annual gross income of spouse: 23,400

Type of employment: e.g. Civil Servant, self-employed: 
Both private sector


In general are you:
(a) spending more than you earn, No
or
(b) saving? yes


Rough estimate of value of home: 210,000

Amount outstanding on your mortgage: Ca. 147,000

What interest rate are you paying? 
Fixed rate 4.69% due to end September 09

Other borrowings – car loans/personal loans etc: 
Credit Union - Ca. 9,000 outstanding (2yrs remaining) 
Bank - Ca. 15,700 outstanding (4 yrs remaining)


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

If not, what is the balance on your credit card? 0.00

Savings and investments: 
Credit union shares: 3,400 (Cannot touch but intend to use against next car loan when required)

Credit union savings: 1,700


Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: None

Life insurance: Yes

Monthly outgoings:
Monthly fixed,Monthly variable and budgeted allowances for all annual must-do's = 1901.25 per month

Monthly Disposable allowance = 1628.00


What specific question do you have or what issues are of concern to you?
We have 480 at the end of each month after all of the above. I'm wondering what we should do with it. Save it to eventually marry or throw it into bank loan which at moment has interest rate of 10.2%?


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## irishlinks (19 Jun 2009)

*Re: Advice appreciated.*

Is there a penalty to pay the loan off early?


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## elcato (19 Jun 2009)

*Re: Advice appreciated.*

Firstly ask the bank could you overpay and is there any penalty in doing so. I would be tempted to spend the next 10 months putting it into the CU and then telling them to take shares and savings together to write off the loan and be complete with it. At least at that point (a reasonably short time) you are down to two loans outstanding. Shares in CU are bad value and many CU's use loans as some excuse for you to pay interest at around 10% while they only give you 2% on your shares/savings.


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## pods (19 Jun 2009)

*Re: Advice appreciated.*

We have no penalty for overpaying bank or credit union.
Elcato, I like your idea of working on the credit union first. Shares are a waste so I'll look into that tomorrow.


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## niceoneted (19 Jun 2009)

*Re: Advice appreciated.*

What do you use the monthly disposable income for? Is the 480 euro left at the end of the month extra to this.


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## chlipps (19 Jun 2009)

*Re: Advice appreciated.*

which loan are you paying a higher interest rate on? if both are similar interest rates, then suggest clearing the CU loan first. Something else to consider is how secure your jobs are and the importance of having some savings to allow payment of mortgage


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## Spondulicks (19 Jun 2009)

Has your credit union got a regular savings deposit scheme? This would build up your borrowing capacity.

Otherwise pay off your loan.

If your mortgage is close to 7 years old remember you will lose some tax relief once you go past 7 years so it will cost you more. Factor this in to your plans.

 For consumer durables it is a good idea to save for them rather than to borrow - particularly as you are carrying a multiple of your after tax earnings in debt.


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## pods (21 Jun 2009)

Our monthly disposable income is for food, diesel, petrol and adhoc. 480 is left over after this and if left in account we'd manage to spend it so we feel it's better to use it against our debt. My partner is back from redundancy after 6 long months but we managed on 1 salary and didn't get into any arrears. Our jobs are both solid so rather than save we're keen to get our loans down. That way we we can save rather than borrow for future purchases.
We've decided to pay our credit union loan for the next year and then hopefully make a start on the bank.


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## niceoneted (21 Jun 2009)

Monthly outgoings:
Monthly fixed,Monthly variable and budgeted allowances for all annual must-do's = 1901.25 per month
Monthly Disposable allowance = 1628.00"

Re your monthly outgoings, can you sit down and calculate exactly what you need for all necessary bills and put this aside. I take it the €1901 is for the mortgage, loans etc and then the €1628 for bills, fuel for car, food, this seems quite high to me and could possible be cut back.
Have your excess taken from your wages as near to source as possible and put it towards one of your loans. Your right to tackle the credit union as realistically you only have circa 4k to clear there. If you tighten belt for 6 months you will have this clear and it will be some weight off. take a breather for a month or two and then hit hard back in to clearing the bank loan you will be amazed at how quickly it can be done when you set your mind to it. 
I once cleared 24 k in one year and looking back I realistically and on paper don't know how it was done but it was - sheer determination I think.


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## pods (21 Jun 2009)

Thanks niceoneted.
1901 is for mortgage, loans, gas, electricity, tv licence, annual car services, sky, coal, gym, car tax, car insurance, nct, bolier service, hair salon, (everything we consider a must).
1628 is for food, car fuel and wants.
Our sheer determination is to get back to zero debt a.s.a.p so that then we can save for the important things in life.


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## niceoneted (21 Jun 2009)

Pods,
You pretty much have everything covered in the €1901 which is great - I do that too. 
The 1628 is still very high so for food, petrol/diesel and wants - Try to change the "wants" to "needs", just even for the remainder of this year. No magazines, bought coffees, newspapers etc. I'm sure you have more than enough clothes/shoes etc. 
Not sure what mileage you do but I have a 60 mile round trip for work and get away with about 200 petrol a month. 300 should more than cover food for the two of you. I can get away with 30 a week if I push it for one and that is eating really well. I have started getting a lot of stuff in Aldi as I found any time I went near Tesco I was leaving at least 40 behind me and didn't seem to have much for it and now I can spent 15 and have loads. 
Good luck. It will be worth it once the loans are cleared. 
Also remember you most likely will be paying less on your mortgage come Sept. put that money to loans too.


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## chlipps (21 Jun 2009)

1628 sounds mad for food, petrol & wants... are u eating out daily?? Our monthly food bill for family of 3 is 600 (and make own packed lunch daily), fuel approx 200... if you have similar costs, then 'wants' is approx 800 per month. I think you should record your daily spending and challenge the 'wants'


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## pods (22 Jun 2009)

1628 is a lot alright. It's more about having it on standby for 'in cases' but yes if we are to be serious we could reduce this further.


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