Debt free- but where do we go from here?

Z

zorba

Guest
Age:
37
Spouse’s/Partner's age:
34

Annual gross income from employment or profession:
E32k, was a lot better but now working a 3 day week due to the downturn in my sector. Also in receipt of €81 p/w Jobseeker's benefit but this won't last for much longer as I've been getting this payment since February.
Annual gross income spouse:
E58k

Type of employment:
My job is not very secure, private sector, my wife is a public sector employee, thankfully.

Expenditure pattern:
We are both generally "savers" and we like to live well within our means.

Rough estimate of value of home
E230k, but who knows?
Mortgage on home
Mortgage free since 2008, worked hard to clear this over the past 9 years.


Other borrowings – car loans/personal loans etc
None, own 2 cars (required for work), no other borrowings.

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

Savings and investments:
E14k in various EBS accounts. E10k in Credit Union. Invested money in a unit linked fund with Quinnlife in 2006, but put this on hold in 2008 as its value plummeted- probably worth less than E2k now.
Do you have a pension scheme?
Yes, I have a personal pension plan with New Ireland but this is on hold and probably worth less than E8k now; also had a company scheme which is now on hold and valued at less than E2k I imagine. I am very wary of pension schemes other than my wife's defined benefit model! Any value my plans had has been wiped out over the past few years.


Do you own any investment or other property?
No.

Ages of children:
4 and 3 years.

Life insurance:
No, but my wife's employment has a "Widows and Orphans" scheme of some kind.

What specific question do you have or what issues are of concern to you?
I think we're doing ok, considering the dreadful state of the country right now; we're mortgage and debt free, saving as best we can and always mindful of how we spend our money in these uncertain times. I know we need to consider life assurance, a pension for me and plan for our children's education. We would like to trade up to a slightly bigger home a couple of years down the line and we plan to have E35- 45k in cash savings by then, all going well. Our savings are not getting a good return in any of those accounts; I know there's room for improvement there. I would welcome any input, thanks.

Thanks.
 
Fair play to you. You are doing better than 99.9% of the populus at present.
 
Congratulations, your financial situation is something to be very proud of!

Life Assurance should be a priority and something you should deal with that now. You don't need some bigger financial plan to make this decision. Given the fact that you have a young family, this is important for both yourself and your wife.

Given the current downturn in your sector, is this a time where you could invest in up-skilling or cross-training to increase your earning potential. Would some of the money that you are putting in to the bank get a better long term return if you put it in to training /education?
 
Thanks ontour; my wife is already in the latter stages of completing a master's in her own area, which has been a significant drain on our time and resources over the last two years. I might possibly consider some further training myself when Mrs Zorba has (hopefully!) successfully completed her studies. I'm not sure if additional training will yield much for me in the short to medium term- my sector is severely depressed (construction professional) and unlikely to recover for a very long time. Otherwise, life assurance is certainly the big elephant in the room!
 
Well done. This is an excellent achievement. I'll let other more financial savy people advise you on your next steps...
 
Looks to me like you are doing deservedly well. I think what you need is to clarify your own goals. Basically you are in a good place and you can see some things that you think you'd like to change, other things that you want or need to change and are not really quite sure how to start progressing them? Sit down, write out some goals, decide whether they are long, medium or short term and then start looking at how you will achieve each of them. You already have listed some below:
1) Improve return on savings
2) Improve life cover
3) Improve retirement planning
4) Educate children
5) Trade up

The savings are really a means rather than a goal. It may be a good thing to decide what those savings are for, are they going to cover a myriad of uses or are they focussed on one goal - you have a variety of medium term plans that they will probably be used for but I don't think you have quite associated the value or the percentage to the goal yet, so the things to consider are return, accessiblilty, risk and spread. How much risk are you willing to countenance? I think it is not unwise to have a percentage of your funds in riskier ventures (in your case such as the QuinnLife fund) and a percentage on deposit.
Firstly, in terms of the fund, logically now is the time to buy units in it as they will be cheaper than they were in 2006. Don't get over-concerned about the drop in value - it is disheartening but these products should be seen as being longer term investments over say 7 - 10 years.
Then look at your deposit account savings, what proportion of your savings are you not planning to touch for a time? Identify a lump sum deposit account that will yield you a higher rate of return.
Then look at regular savings - I am assuming you are continuing with them? Identify a regular savings account with the best rate of return and start putting money into that.

Goals first though :)
 
Thank you so-crates, very good points, excellent in fact.
 
Would I be starting a fire here by questioning the payment of Jobseekers to people in this situation? Does a couple pulling in 90k need a 4k social benefit?
 
sustanon said:
Would I be starting a fire here by questioning the payment of Jobseekers to people in this situation? Does a couple pulling in 90k need a 4k social benefit?
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I agree, that was my first impression reading this post, I think it is shocking this person is getting a social welfare payment considering the huge wage coming into the home each week. I know he has paid his contributions etc but considering over 400,000 people are currently unemployed its rather hard to stomach.
 
Not quite relevant to the original question but I can see where you are coming from. Righteousness is such a comfortable position, however the OP referred to Jobseekers BENEFIT not ALLOWANCE. The former is an entitlement based on his contributions, it is what the "I" in PRSI is supposed to be about, at the end of the day it is equivalent to say Hibernian paying out on a policy. Would you consider it right that an insurance company would refuse to honour it's contractual committment?
 
Having worked, paid taxes and PRSI for more than 15 years, strangely enough, I feel I am quite entitled to claim my Jobseeker's benefit. I could probably say a lot more, but I won't- however I do hope that I can return to working a 5 day week sometime soon.
 
zorba said:
Having worked, paid taxes and PRSI for more than 15 years, strangely enough, I feel I am quite entitled to claim my Jobseeker's benefit. I could probably say a lot more, but I won't- however I do hope that I can return to working a 5 day week sometime soon.
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You most certainly are entitled to it and should be giving the advice to other posters on here. You are financially very healthy indeed and congrats!
 
so-crates said:
Not quite relevant to the original question but I can see where you are coming from. Righteousness is such a comfortable position, however the OP referred to Jobseekers BENEFIT not ALLOWANCE. The former is an entitlement based on his contributions, it is what the "I" in PRSI is supposed to be about, at the end of the day it is equivalent to say Hibernian paying out on a policy. Would you consider it right that an insurance company would refuse to honour it's contractual committment?
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provided I was meeting all of the requirements of the insurance policy, and not committing fraud, of course, insurance is insurance. just like saying you don't smoke on the application form. if they don't check it or pursue the stipulation, is it a crime?
 
sustanon said:
provided I was meeting all of the requirements of the insurance policy, and not committing fraud, of course, insurance is insurance. just like saying you don't smoke on the application form. if they don't check it or pursue the stipulation, is it a crime?
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The above comment is entirely off thread, unhelpful and has no relevance to my original query. So-crates answered my query, thanks to the other posters for their contributions.
 
sustanon said:
provided I was meeting all of the requirements of the insurance policy, and not committing fraud, of course, insurance is insurance. just like saying you don't smoke on the application form. if they don't check it or pursue the stipulation, is it a crime?
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hmm sustanon - not a great use of my analogy on your part. In essence you are liking his lawful usage of the insurance element of PRSI, based on his contributions and his current situation, to fraud. He isn't claiming a means-tested allowance and he has had no reason to hide his partner's income - your implication is that he is obliged to disclose this income and that he has not - thus is claiming monies he has no entitlement to. I'd have to agree with zorba - your comment is quite pointless. You evidently feel outraged that can claim such monies but your sense of outrage is insufficient grounds on which to throw out baseless accusations of fraud.
 
well done to you both,collect everything from social welfare.your are entitled to it after paying your taxes and prsi, like most of us. once again well done some good news for a change
 
my implication is that the OP is obliged to be actively seeking work. paying PRSI and benefiting from it is commendable, and the OP is absolutely entitled to it, but the requirements os the benefit payout should be met. I never mentioned the disclosure of incomes. I'm referencing the requirement to be actively seeking work.
 
sustanon said:
my implication is that the OP is obliged to be actively seeking work. paying PRSI and benefiting from it is commendable, and the OP is absolutely entitled to it, but the requirements os the benefit payout should be met. I never mentioned the disclosure of incomes. I'm referencing the requirement to be actively seeking work.
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This will be my last response to these comments from sustanon:

When making my claim for benefit, I declared my household income and all other relevant information requested by the officer at the social welfare office, as any person must. Since being put on reduced hours I have written to many companies (and not just within my field), looking for part time work of any kind. Most companies didn't bother to reply. I followed up every possibly personal contact and lead with a view to getting additional work, all to no avail. In short I have been actively seeking work and never said otherwise. If you persist in a baseless argument to the contrary I'm going to dismiss it as the work of a "troll". Have a nice day.

Again, thanks to everbody else for actually responding to my initial query, cheers!
 
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