Can we save more?

Age: 33
Spouse’s/Partner's age: 35

Annual gross income from employment or profession: Stay at home Mum. €250 a month between Children’s allowance and early childcare sup.
Annual gross income of spouse: 80,000 + average on 20-30k on OT & bonus. 2008 was €118,000

Type of employment: Employed IT consultant

Rough estimate of value of home €400,000
Amount outstanding on your mortgage: €275,000
What interest rate are you paying? Fixed until May 2010 at4.5%

Other borrowings – Spouse’s Credit union €8,000

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €1,500

Savings and investments: 4k savings in my Credit union. 7k in a savings where 50% goes into shares and the other half saved. Not sure of the full details.

Do you have a pension scheme? husband, 12% including company’s share.

Do you own any investment or other property? No

Ages of children: 1 child – 3yo

Life insurance: Mortgage protection & Spouse’s company will pay 3 times his salary if he dies.

What specific question do you have or what issues are of concern to you?
Spouse saves €130 a month, which goes into the saved/shared thingy! My question is I feel we can afford to save more but he thinks we can’t afford it. This is the only amount we are saving due to a lot of money spent on IVF over the last 4-5 years. Finished with IVF and need to get our finances/savings sorted.


Edit to add...
We have two cars 1-'02 and 2-'04. husband spends €80 a week on travel.

number one and most important as has been said over and over on these pages, pay off your credit card bill, TODAY!!! the interest is crazy and you have the money to pay it off in full. dont ever let it go overdue again, you might as well just go to the bank and say " please take my money off me"

Do you really need to ask should you be saving more with an income of 118k per year?!

I earn less and am saving considerably more with similar expenses.

aristotle25 said:

Do you really need to ask should you be saving more with an income of 118k per year?!

I earn less and am saving considerably more with similar expenses.

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I hear you 100% but I'm hoping that my DH will see this in black and white and it might kick us/him in to action. I think spending an average of 10k a year on fertility treatment has got us out of the habit of saving. Seems silly I know.

You should detail out exactly where the money is going.

If you spent 10k p.a on fertility treatment then you would think you can save that amount each year easily.

Your mortgage looks reasonable so you have plenty of scope to save a lot more, I would say 25k per year anyways.

25K! If I said this to DH he'd look at me like I had two heads. He's not mean but he just doesn't get the whole savings thing and seems to find a hole for the money now that we're not doing IVF anymore and I'm not totally innocent here either but it's really time we got our act together. God I feel like a fool now. Anyway,

What we spend.
Mortgage - 1450
Car travel - 100 per week
Sky - 50
phones - 80
credit union - 150
shopping - 120 per week
savings - 130
ESB - 125

Then we have our yearly bills TV licence, car tax, car ins, which all add up to roughly €2000 and a hol, which is probably about 2.5k spending money inc.

We don't keep an eye on what we spend after that. We go out once a month for a meal and few drinks and I always seem like I buying brithday presents or gifts for something or another. IVF money was paid by bonus and OT and when OT/bonus wasn't due my parents give it to us and we'd pay them back when the next bonus came in. Out last IVF though was borrowed from DH credit union.

So you have income of 250 per month which is 3k net per year. Net income from 118,000 is probably around 75,000 per year (a guess, depends on if your husband is PAYE or contracting?).

So total income of about 78,000 net per year.

Mortgage is 17400 pa (do you also get interest relief on that?)
Car travel: 5200 pa
Sky: 600 pa
phones: 960 pa
credit union: 1800 pa
shopping: 6240 pa
ESB: 1500 pa
Yearly bills (car tax etc) + holiday: 5000 pa

So that leaves about 39k in cash unaccounted for yearly.

There are more bills and expenses not listed (e.g. lunches, health expenses etc) but you have lots of scope to save a lot of money.

TillyD said:

God I feel like a fool now.

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No, you are looking into it now so thats good. A lot of people didnt watch their spending during the "boom" times. Good thing is you have low enough expenses and very good income at the moment.

Thank you for taking the time to reply. I really appreciate it as this is something I need to discuss with my DH tonight. Husband is PAYE. Last year was a very good year. Usually his P60 shows about 100k for the year.

''Mortgage is 17400 pa (do you also get interest relief on that?)'' - Yes I think we do.

Husband eats out every day for lunch.
I feel like I'm never our of the local shop buying stuff I should be spending on my weekly shop - this will change!
Company pays VHI.
Probably €200 a month on a meal out and take aways at weekend.
We spend about 1k on oil for the house too.

And a gym membership of €400 I think that's it.

We were in the same boat - good incomes but hardly any savings and no idea where money was going.

Take your monthly/ weekly bills excluding groceries and any annual payments, eg holidays, insurance, car tax, christmas, etc etc and figure out what these come to annually. Divide this by 12 - this is your monthly outgoings. At the beginning of each week our budget is €500 in cash. This is for groceries, petrol, cleaner, meals out, clothes etc etc. Its more than enough - just work out what you would be comfortable with.

We put this in a little cash box and take out a bit as we need during the week. No credit cards or laser cards in our wallet. We keep them in the box. Any left over at end of week, we take out that amount less the following week- or maybe treat ourselves to a night out. So at the start of every Sat there is €500 there.

Also, work out a weekly menu and make a shopping list and do a weekly shop - its amazing how much you save doing this. Also use a Dunnes Card or Tesco Card - wherever you shop - and use the money off vouchers you end up getting.

We are now saving nearly €3k a month by doing this - and not scimping on social life or holidays.

Thanks Don,

I'm just adding it all up now. I forgot about bin charges almost €400 a year. I like your idea of the money and the tin. That would cut out the impulse buying on clothes, over spending on lunches ect. But we need to commit to putting away X amount of money monthly. What or where do you put your savings? We couldn't leave it in a current acc or we'd 'find' a reason to spend it. When we put it in savings we don't tend to touch it.

Set up a savings account in whichever bank has the best savings rate, then set up a direct debit so that every month the money is taken straight out of your account and put in your savings account. A case of not seeing it so you don't miss it. You should have circa 30k saved by the end of the first year, in reality.

Well, without any unforseen circumstances that it.

its a mentality change you need. instead of just spending , you need to say " do i need that item" . you will find it very easy to save then. use the internet instead of buying papers, bring a lunch instead of eating out during the day( huge savings will be made here). etc etc. once you get into the groove you will find it no prob

i earn 48k per year and save 1k a month. i also go on 2-3 hols per year and dont use my savings for that. it is very do-able!!!

We have a regular savings account with Anglo - €2k goes straight into that on payday.
Also have a demand lump sum account with First Active, and at the moment we put €500 a month into that at payday ( the difference between our mortage at 5% and the current mortgage payment) We also have €100 here and there going to various long terms savings a/c for the kids.
Whatever is left over the day before payday goes into the FA a/c. Whenever that goes above €12k we move €5k into the best one year/ six month fixed term a/c at the time.
We also have our holiday/insurance a/c where we move the monthly sum needed to pay for that at the beg of the month too. Thats with Northern Rock at the moment.
CHeck out the best buys for regular savings and lump sum savings.

Actually sounds complicated when I put it all down - but its not really!!

Thanks for all the replies today.

Spent the best part of the afternoon adding up our outgoings and trying to figure out where the h3ll our money is going. Put it all in a spread sheet and after dinner this evening we both talked about every cent that comes and goes out of this house.

Our plan for now is to clear our credit card of €1500 with savings we already have.
We both think the money in the tin will really work for us. I need to see the money going and to know exactly what is left. I've often went to boots to buy baby wipes and ended up spending €50 or more on stuff I probably didn't really need. Never noticed it because I'd be using the laser card. So the cash, the credit card and the lazer card will be going into the tin! €450 will be our weekly spend. This will be used for shopping, petrol, phone credit, meal/takeaway ect
Our only savings of €130 a month will increase to €500. Husbands OT that use to just go towards IVF will also go into savings, roughly 1k every 2 months so saving 1k a month for now, we need to look into the best place to put this money but for now it will be the credit union. He gets two bonuses a year. One will go into savings and the other is up to him. He works hard and should enjoy his bonus for doing so.

It still leave's us fairly comfortable but it's a start and we'll review it again the end of Feb. With the way things are we don't know how long the bonus and OT will last.

I'll report back in a few months and let you know how it's going.

Thanks again... Tilly.