Financial advice for young family

Boyd

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1,589
We cleared the credit card balance a month ago with a tax rebate but its maxed out now because of xmas presents and flights to Europe to visit a family member in Feb (I know, I know!).
Ah come on! You spent E2083 in the last month on Christmas presents and flights to Europe when you JUST had cleared your card?! Seriously....you need to get a grip with regard to your spending.

You're correct regarding groceries, we use the buymie app to do the lidl shop and that tends to be between 100 and 150 per week.
As I suspected, groceries are actually E700 max per month, leaving E800 euro unaccounted per month thats being incorrectly labelled as groceries. If you simply find where this E800 goes and saved it rather than frittering it away on discretionary spending (eating out, eating in, coffees and lunches etc) I think youd find you would then have a good chunk of extra money to pay your loans quicker.

You didn't say where is the E280 children's allowance going?
 
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Boyd

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How should we plan our budget, monthly or weekly
I would budget monthly as you get paid monthly. I would have a direct debit into a Monthly Bills account that transfers enough for all known monthly bills (even if you pay them weekly). This way you know your bills are paid (pay them from this account only).
I would include mortgage and loans in this also. With this approach, all your mandatory bills are clear and separate.

Personally I'd put groceries to a separate account or revolut card, so you transfer in once per month, and that's it. Again, it's clear the spend then.

Whatever is left in main account is then yours to use. This will make it much clearer where your money is going. Based on previous post about real cost of groceries you will have E800 per month extra in your current account, which you can continue to spend by eating out our you can pay you credit card debt. The choice will be yours but at least you'll be able to see the wood from the trees (a.k.a mandatory expenses from your chosen lifestyle expenses).
 

Sumarisol

Registered User
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21
Ah come on! You spent E2083 in the last month on Christmas presents and flights to Europe when you JUST had cleared your card?! Seriously....you need to get a grip with regard to your spending.


As I suspected, groceries are actually E700 max per month, leaving E800 euro unaccounted per month thats being incorrectly labelled as groceries. If you simply find where this E800 goes and saved it rather than frittering it away on discretionary spending (eating out, eating in, coffees and lunches etc) I think youd find you would then have a good chunk of extra money to pay your loans quicker.

You didn't say where is the E280 children's allowance going?
Ha I know. That's my problem, any money that we had extra I considered it there to be spent. Thats a huge part of the problem so as well as budgeting properly I need to really change my mindset and how I think about money.
We used to bank with KBC and so the child benefit is still getting paid into that account and there are a couple of DD still coming out of there such as car insurance X 2 and life insurance of 110 so that's about 250. We will switch them all to the AIB account.
 

Boyd

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Yes but my point is that is another E280 income that you omitted but you still listed the outgoing as a bill, thereby making it seem like you had more bills to pay from your salaries, which it isn't - life insurance and car insurance are basically for free from child benefit. Again, this further masked how much money you are actually spending on discretionary products from your main salary.
 

Boyd

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1,589
That's my problem, any money that we had extra I considered it there to be spent
This is 100 percent the main issue here - and spend it you did, in fact even money you didn't have (I refer you back to the E2083 of Christmas gifts and European flights here). Realising this is the problem is the first step to sorting it so fair play for admitting that outright. Now you have the knowledge of how to resolve it based on all these replies.
 

KOW

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Well I think it's clear they have sought out help by posting here. Not all people are comfortable asking family for financial help either in an advice or actual cash manner. (and the OP may not want to do so considering they already have a family loan). Sometimes it's best to get the cold facts from independent observers - see my point above about actual groceries Vs eating out/eating in/buying lunch/ buying coffee all being lumped together into E1500 of a grocery bill which is simply not true. It's possibly E800 groceries plus E700 optional spending.
Agree with you thats why we all post on AAM.

Let me explain it this way. I was involved in a serious accident 6 years ago. Major surgery with over half dozen follow ups.
Earlier this year following another hospital stay I told the Consultant I felt we were at the end game and at this stage I felt there was no point going further.
The Consultant said to me many patients sit across from him similar to myself and if he could push a button and they could go down a tunnel and out the door that would be the best thing for both parties. They were wasting his time and their own time because they simply dont or are unable to follow his advise and instruction.

In the new year hopefully one more go with the Consultant.

Now.

Yes an App or simple spending diary might identify where the jingles are going. But will the OP act on this on their own or will they take another holiday.
Without proper help I know where I would place my bet.
 

evil_g

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17
It's called wallet. I really like, very easy to use. €4 per month and it links directly to your bank account so you get real time data.
This is probably worth breaking off into a seperate thread, but is this app safe? It's highly rated on google, but it asks for my online banking PIN....which seems very weird.

Does anyone else use it?
 

llgon

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573
But if you and others on such good incomes have not a grasp on basic finances I am of the opinion that you should seek out a friend or family member to set out and help you achieve your deserved goals.
Without proper help I know where I would place my bet.
Not sure what you mean by proper help. I doubt that the help provided by Username and others here would be bettered by a friend or family member of the OP.
 

Boyd

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This is probably worth breaking off into a seperate thread, but is this app safe? It's highly rated on google, but it asks for my online banking PIN....which seems very weird.

Does anyone else use it?
Good idea about new thread, could you create that for discussion of the app? Don't wanna move the focus from the main point, the OPs finances....
 

Sumarisol

Registered User
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Agree with you thats why we all post on AAM.

Let me explain it this way. I was involved in a serious accident 6 years ago. Major surgery with over half dozen follow ups.
Earlier this year following another hospital stay I told the Consultant I felt we were at the end game and at this stage I felt there was no point going further.
The Consultant said to me many patients sit across from him similar to myself and if he could push a button and they could go down a tunnel and out the door that would be the best thing for both parties. They were wasting his time and their own time because they simply dont or are unable to follow his advise and instruction.

In the new year hopefully one more go with the Consultant.

Now.

Yes an App or simple spending diary might identify where the jingles are going. But will the OP act on this on their own or will they take another holiday.
Without proper help I know where I would place my bet.
I certainly plan to take on board all the advice given here. I've already cut up my credit card. I would be absolutely foolish to take a holiday until we are on top of things and I certainly would not consider getting into more debt. The holiday is a 3 day trip to Brussels, staying with family, I dont expect us to spend more than €100.
I came to the site to get advice on how to budget properly and to hold myself accountable for past mistakes. The app has been amazing in opening my eyes to the stupid spending we have done recently. I can also see exactly how much money is due out over the coming weeks so well worth it and something I want to continue using. I was hesitant to hand over my details but no issue and my banking app recognized the external request and asked for permission.
I would say my parents were not good at all in talking to us about money so really I've spent my whole life being a little bit shit at managing but I'm hopeful that this will change and I can begin to teach my children the importance of budgeting and saving.
 

Sumarisol

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21
Can you clean up the figures for outgoings? Some are listed per week (child care), some are listed per month (mortgage) and some seem to be in totality (family loan). Similarly, E25 Gym - is this per month per person or what? It's hard to know what are fixed monthly or weekly costs, suggest you edit original post to make it easy to understand. List each expense clearly by amount and by timeframe. How much are you paying per month to your family loan? Is that included in the monthly loan repayment figure?

1) Stop Borrowing

Yes you need to stop borrowing money, from anyone IMO (family, bank, credit union, credit card. I assume you have cut up your credit card at this point?

2) Understand Interest and Cost of Credit

Also important missing information, what is the interest rate on your credit card balance? In other words, how much interest are you paying on this loan per month? How much are you paying off the outstanding balance per month? (This is in effect another loan).

Please find out for sure and find out if it's fixed, variable or what. Also, what are the interest rates on two personal loans? Assuming mortgage rate is actually 2.5 percent, forget overpayment. You need to clear high interest debts first.

3) Separate Needs from Wants/Nice to have spending
I echo other posters, your grocery+broadband+sky+phone bills seem crazy high. . You need to separate groceries (required) from eating out, eating in takeaways, lunches out, coffees out. Depending on that split, your *actual* groceries might only be a reasonable E800 per month, which sounds do-able me, saving you a whopping E700 per month (of non grocery spending).
For example, "lunch a couple of times a week" could be costing you 2 people * 2 times per week * 10 euro per person = 40 per week * 4 = 160 month (could be double that or half that depending on what lunch is for you).
Takeaways once a week for 4 must be E40 quid per week so another E160 per month.
Finally, eating out 2/3 times a month for 4 people is surely E200-300.By that estimate you're spending around 500-600 per month eating food you don't cook yourself. If you're serious about this then id suggest stop eating out, stop getting takeaways, make your own lunch and stop getting coffees for a month and see how much you save.

4) Hidden Spends?
I see no mention of cigarettes or alcohol. Do either of you drink or smoke? If so, you must factor in monthly spending on these expensive discretionary items, and obviously reduce them.

5) Child Benefit?
My understanding is that Child Benefit is €140 per month for each child? Where is this E280 per month going? I don't see it being added to the effective take home pay per month figure.
I updated the original post with the figures. Just need to find out the CU interest rate.
 

Boyd

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1,589
Rather than me doing it, please add up all the monthly outings that you listed (600 for groceries is the correct number, excellent) and post the total here:

Total take home pay = 6000
Children's allowance = 280
Total effective take home pay = 6280 {A}
Total monthly mandatory bills = ?? {B}
Total money to clear debts or for discretionary spending = A - B

This figure is what you have in your hands every month, in reality. This should be much higher than you think and should scare you a little as to "jeez where is the going".

Also that you now say you are paying a cleaner E80 a month is remarkable considering your debt. Again this is a new discretionary expense that wasn't listed initially!
 
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Boyd

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1,589
I did it myself:
1240 +
850 +
880 +
600 +
25 +
150 +
70 +
110 +
70 +
80 +
15 +
15 +
9.99 +
110. +
80 +
60 +
70 +
20 +
= 4654.99

Hence by my calculations, you have on average 6280 - 4655 = 1625 disposable income per month.

As we've said, some of your bills are really high like Sky, broadband, having a cleaner, having multiple TV subscriptions etc. You can easily reduce these.

Even with these completely unchanged, E1600 per month is left after all bills. This is the cash you need to reclaim from spending.
 
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Sumarisol

Registered User
Messages
21
I did it myself:
1240 +
850 +
880 +
600 +
25 +
150 +
70 +
110 +
70 +
80 +
15 +
15 +
9.99 +
110. +
80 +
60 +
70 +
20 +
= 4654.99

Hence by my calculations, you have on average 6280 - 4655 = 1625 disposable income per month.

As we've said, some of your bills are really high like Sky, broadband, having a cleaner, having multiple TV subscriptions etc. You can easily reduce these.

Even with these completely unchanged, E1600 per month is left after all bills. This is the cash you need to reclaim from spending.
Ok great. Thank you. Do you recommend putting some of that money away into an emergency fund or just off the debt? Or both perhaps?
 

Boyd

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1,589
Well first would be to stop spending it, obviously. Simply reclaiming even E800 of this per month would be a massive win (this is the exact amount I mentioned you could save on my very first reply). I would be very very strong here and push for E1000. That's barely over half, definitely achievable.
Personally, I'd pay most of it off your credit card off first, E800 each month. There is no point paying 19 percent interest in this. The remaining E200 I would put in a new savings account for emergencies. By March, your credit card will be paid. Report back here at that point and we can go from there.
 

Boyd

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1,589
P.S. I would be astounded if a family of four can go to Brussels for three days on E100, regardless of staying with family. Please report back with exactly what you spend on this holiday (including Ryanair coffees, overpriced airline food, trains, eating out, souvenirs, kids activities, tourism stuff etc), as again this will come from your leftover E1625, meaning less can be paid off debt etc etc.
To save money while travelling: did you know your can bring packed lunches onto a plane? Do that to avoid buying 4 rounds of food while travelling. Also bring some empty water bottles which you can then fill up from free water fountain once you're gone through security, to save buying soft drinks and coffees in the flight. Probably E30 quid saved right there.
 
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Sumarisol

Registered User
Messages
21
P.S. I would be astounded if a family of four can go to Brussels for three days on E100, regardless of staying with family. Please report back with exactly what you spend on this holiday (including Ryanair coffees, overpriced airline food, trains, eating out, souvenirs, kids activities, tourism stuff etc), as again this will come from your leftover E1625, meaning less can be paid off debt etc etc.
To save money while travelling: did you know your can bring packed lunches onto a plane? Do that to avoid buying 4 rounds of food while travelling. Also bring some empty water bottles which you can then fill up from free water fountain once you're gone through security, to save buying soft drinks and coffees in the flight. Probably E30 quid saved right there.
My husband is staying home so just me and the kids. We will just go for walks and eat at home, we've done all the touristy stuff previously so it's really just about hanging out and catching up. Would always bring packed lunch on a plane for the kids anyway but would have bought coffees so shall refrain this time.
Ok so my aim is to hold onto €800 and clear the credit card and €200 into an emergency kitty. I will report back. Thanks again.
 

Leper

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Messages
1,169
Gross Annual Income €138,000 + Childrens' Allowance - And I thought I squandered a few bob in my day! You make even me look good. With respect, thanks for that (I'm not being sarcastic).

Live with me for a month and you'll be a millionaire shortly.

Regards
Lep
 

Sumarisol

Registered User
Messages
21
Gross Annual Income €138,000 + Childrens' Allowance - And I thought I squandered a few bob in my day! You make even me look good. With respect, thanks for that (I'm not being sarcastic).

Live with me for a month and you'll be a millionaire shortly.

Regards
Lep
Haha I know, I'm an eejit. But until this week I had no idea how much was coming out every month, not a clue! So it's not surprising it's been squandered away. The only defense I have is that we've only been on in the €138k salary since mid Oct.
Happy to take any tips you may have on how to be good with money!
 
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