Financial advice for young family

I would suggest you go to Mabs. They are excellent for budgeting advice and will work on a budget with you and tidy up bank accounts etc. Consider opening a saving account and start saving for next Christmas in January. Keep this separate from any other savings and not linked to your bank account (to avoid temptation). If you spent €2080 on gifts etc this Christmas you need to be putting away €175 each month just for Christmas.
I also think it is strange that your budgeting app asks for your PIN.
 
Is your husband on board with all the changes? Great if he is, you need to work together.

You seem very focused on this at the moment but you need to be careful not to swing too far from spending everything to spending nothing, because you will end up feeling resentful.

Maybe sit down together and decide the top 5 things to change each month and congratulate and encourage each other when it works. Maybe decide with the savings you are going to achieve something by say July. A debt paid off? something saved for?

Work on getting rid of debt one by one. Celebrate when each loan is behind you. Then plan what you are going to do with the money you free up, saving for another debt payment or towards a family goal.

Replace the eating out/take aways with free to do things so you don’t feel deprived of the opportunity to have a good time.

Best of luck, you are in a great position to take control and plan what you want to spend your money on. You control it, rather than stressing on how to cope with what is left every month.
 
I think the advice for someone on a high income has to be different than that to someone on a low income. There has to be extra perks that come with earning more income , I used to spend a lot of money on things that weren't worth it but it was a reward for having worked hard and having a high income.
I think if someone earning a high wage wants to watch Sky sports its less of an issue than someone earning minimum wage , its only becomes a problem if you are borrowing to fund your lifestyle. Obviously you want to cut back but I would be hesitant to cut back everything to a bare minimum , life is for living and if you have got yourself into the fortunate position of a high salary then its important to enjoy it.
We eat out a lot nowadays and our food bill would be extortionate if posted here I could save thousands a year cooking at home and buying the food from Aldi but I don't ever see it as a waste , I have paid money for a service and a product , I often see people say you are wasting money on Sky or eating out or Holidays or lunches in work , having a nice lunch out is not wasted money if you are enjoying the service provided more than you would have sitting at your desk.
Cut back to a level you are happy with is my advice but once essentials are sorted don't be afraid to treat yourself , there can be a tendency on AAM to advise living like a pauper and save it all for a pension , then you'll come back as a pensioner and say your spending all your pension money and you'll be told to keep it for your kids , then your kids will come on in years to come and they be told to put it back in a pension , money is meant to be spent basically.
 
I would suggest having a look at the MABS website, there is brilliant info there about budgeting as you would more than likely be waiting a while for an appointment in your situation, you won't exactly be high priority. Now that said maybe MABS are not as busy as they were some years back and individual offices vary so if you have a few around you maybe ring around to see what the waiting time would be.

Definitely start a spending diary of some sort, either a simple paper diary or some app or other, you can't cut spending until you figure out where the money is being spent. I'd love a couple of days going through that budget/income :) I have spending diaries myself going back 35 yrs, just thinking the other day it's time I threw them out!
 
norahayes said:
I would suggest you go to Mabs. They are excellent for budgeting advice and will work on a budget with you and tidy up bank accounts etc. Consider opening a saving account and start saving for next Christmas in January. Keep this separate from any other savings and not linked to your bank account (to avoid temptation). If you spent €2080 on gifts etc this Christmas you need to be putting away €175 each month just for Christmas.
I also think it is strange that your budgeting app asks for your PIN.
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It looks for the online banking login details so it can pull in the transactions from my account.
 
Clamball said:
Is your husband on board with all the changes? Great if he is, you need to work together.

You seem very focused on this at the moment but you need to be careful not to swing too far from spending everything to spending nothing, because you will end up feeling resentful.

Maybe sit down together and decide the top 5 things to change each month and congratulate and encourage each other when it works. Maybe decide with the savings you are going to achieve something by say July. A debt paid off? something saved for?

Work on getting rid of debt one by one. Celebrate when each loan is behind you. Then plan what you are going to do with the money you free up, saving for another debt payment or towards a family goal.

Replace the eating out/take aways with free to do things so you don’t feel deprived of the opportunity to have a good time.

Best of luck, you are in a great position to take control and plan what you want to spend your money on. You control it, rather than stressing on how to cope with what is left every month.
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He is definitely on board with the changes and is delighted I'm finally coping on. On Monday we will open another bank account for the discretionary spending. Would love to clear the CU loan and credit card and perhaps aim for a cheap family holiday.
 
@Fella all of your points are perfectly true if you have the money, the OP simply doesn't and you haven't offered any actual tangible advice to help them. They are borrowing to pay for Christmas gifts, borrowing to pay for holidays etc. If they continue doing what they're doing not they'll be in even larger debt, as they will continue to follow their existing (and your suggested) "Money is for spending" approach. Don't get me wrong, it is for spending but with some level of cop on.

The reason I am saying stop eating out etc is that I have identified by asking the OP specifically awkward questions that they are spending E800 extra per month on such things that they previously hid (accidentally or not) under the heading of groceries, making it seem a necessity when it ain't. They have E1600 after all listed bills but yet have 3 loans and a maxed out credit card, amounting to around E25,000. And since you mention it, they have zero pension nor any emergency savings or contingency plans if an expense pops up. Let's get real here, their debt is an emergency.
 
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Sumarisol said:
Would love to clear the CU loan and credit card and perhaps aim for a cheap family holiday.
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Eh 3 out of the 4 of you are going on holiday to Brussels don't forget.

While it's a good aim, could you forget that for the next 6-12 months anyway please until you get your house in order and can pay for it without borrowing.
 
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Hi Summarisol, I didn't know how you would react to my post. But, reading yours, I'm glad there are people around who'll spend a few bob. I am aware that the website is called Askaboutmoney and it is pretty much filled with people I'm glad I never met. There are exceptions. I'm looking forward to meeting Purple and yourself - hopefully it's in the south of Spain.

But, life is to be lived without being a slave to your income. There are far more important issues we all meet through life than the balance in our bank accounts e.g health.

Yours is a good complaint though and all you have got to do is rid yourself of Netflix etc (the "etc" being more important) and the extent of your eating out. Have a look at your childrens costs. Also, have a look at the income of your spouse. Would your spouse be better off not working? I'm only putting through solutions and not trying to dictate what your spouse should or should not do.

If I know how to become a millionaire (and I'm not one by a long shot) it would be infinitely easier for you. With your income you can play guaranteed income Monopoly with real money.
 
Leper said:
Hi Summarisol, I didn't know how you would react to my post. But, reading yours, I'm glad there are people around who'll spend a few bob. I am aware that the website is called Askaboutmoney and it is pretty much filled with people I'm glad I never met. There are exceptions. I'm looking forward to meeting Purple and yourself - hopefully it's in the south of Spain.

But, life is to be lived without being a slave to your income. There are far more important issues we all meet through life than the balance in our bank accounts e.g health.

Yours is a good complaint though and all you have got to do is rid yourself of Netflix etc (the "etc" being more important) and the extent of your eating out. Have a look at your childrens costs. Also, have a look at the income of your spouse. Would your spouse be better off not working? I'm only putting through solutions and not trying to dictate what your spouse should or should not do.

If I know how to become a millionaire (and I'm not one by a long shot) it would be infinitely easier for you. With your income you can play guaranteed income Monopoly with real money.
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I am possibly one of the people you are glad you never met and while I agree there are more important things eg Health than being a slave to your income, the OP is clearly concerned about his spending as he has gone to the bother of asking for advice.
 
Leper said:
Hi Summarisol, I didn't know how you would react to my post. But, reading yours, I'm glad there are people around who'll spend a few bob. I am aware that the website is called Askaboutmoney and it is pretty much filled with people I'm glad I never met. There are exceptions. I'm looking forward to meeting Purple and yourself - hopefully it's in the south of Spain.

But, life is to be lived without being a slave to your income. There are far more important issues we all meet through life than the balance in our bank accounts e.g health.

Yours is a good complaint though and all you have got to do is rid yourself of Netflix etc (the "etc" being more important) and the extent of your eating out. Have a look at your childrens costs. Also, have a look at the income of your spouse. Would your spouse be better off not working? I'm only putting through solutions and not trying to dictate what your spouse should or should not do.

If I know how to become a millionaire (and I'm not one by a long shot) it would be infinitely easier for you. With your income you can play guaranteed income Monopoly with real money.
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No, he definitely needs to work. He's spent the last 5 years studying for a whole new career. He's in IT now so he will hopefully have some good earning potential in the future and perhaps I could take a step back and be home a bit more. But i guess we are a few years from that.
 
On the positives, you have good equity in your house, a good income and that will increase as your husband completes his training.
Your situation is far from dire but I think you need to add up your yearly expenses and then set an amount per month aside for the big bills. If your earnings fluctuate then you'll have to work on having a bit of a buffer.
If you reduced your takeaway/ eating out amount to even 200 and put the 500 off the credit card you could be rid of it by april. Then the family loan get rid of by summer.
It might take longer to change habits but sounds like you are determined. Easy to spend too much but with your income you will quickly recover it if you reduce spending
 
norahayes said:
I am possibly one of the people you are glad you never met and while I agree there are more important things eg Health than being a slave to your income, the OP is clearly concerned about his spending as he has gone to the bother of asking for advice.
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Don't be putting yourself down Nora. Some of my closest friends are (unlike me) financial wizards. I know Sumarisol is concerned about his/her financial situation (aren't we all?). I'm merely putting forward a case while one's financial situation is important; it is not the be-all and end-all of everything.

Sumarisol's spouse is studying for a whole new career for the past five years. This in itself appears to be a terrific investment for their future.
 
norahayes said:
I am possibly one of the people you are glad you never met and while I agree there are more important things eg Health than being a slave to your income, the OP is clearly concerned about his spending as he has gone to the bother of asking for advice.
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I'm a she! :)
 
Leper said:
Don't be putting yourself down Nora. Some of my closest friends are (unlike me) financial wizards. I know Sumarisol is concerned about his/her financial situation (aren't we all?). I'm merely putting forward a case while one's financial situation is important; it is not the be-all and end-all of everything.

Sumarisol's spouse is studying for a whole new career for the past five years. This in itself appears to be a terrific investment for their future.
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Not putting myself down Leper..........................considered it a positive!!
 
I too am on a journey from being crap with money to securing a future in which I and my family are financially secure.... I read the book "your money or your life" and I found it really motivating to stop squandering money on coffees etc. That book completely changed my attitude to money. I agree with some posters that the problem is keeping the motivation going. I find myself slipping into my old 'bad financial behaviour', particularly around Christmas. You are certainly not the only one trying a nd struggling to get a handle on not spending more than they can afford during Christmas! I'm going to start saving in Jan for next year as some posters have suggested - good planning / budgeting seems to be the key.
 
Positives:
- Gorss income recently increased to 138k (although can be less) and will increase in future with husbands salary
- Net worth of 227K (equity in house of 252k and debts of ~25k)

Negatives:
- Struggling on a monthly basis to live off income so need to come up with a plan to address this (which you are now doing through great advice here :) )
- No pensions...once you get a grip on finances this is the next thing you need to address...it'll come diircetly out of your pay so is the best and most efficient way (including tax efficiency) of saving for your retirement

So you have a healhy net worth and a healthy and growing income so the only way is up really...there are far, far worse off than you... it's just a case of getting on top of things and going from there really
 
Am I missing something here, the discretionary spend does not seem overboard. From a lot of the feedback here, I'm assuming people live of porridge and toast sandwiches each month and don't spend a penny that is unaccounted for. We all need to enjoy life to an extent.

You would not try to a run a marathon without training right? So do not expect to solve your financial issues and change habits in a month. It is going to be a process of trying and failing, but if you keep trying you will get better and learn. I would only use the app for a month, tracking every little penny is probably unsustainable in your situation.

The underlying issue here is that people aren't taught how to be good with money, so we can't expect them to be good without training.

My advice would be the following.

1. Calculate all Bill's / fixed outgoings (childcare etc) for the month and deduct from income. For example you need 2k per month for Bill's. Set aside 2k and pay all bills out of that account. Over the next few months see which Bill's can be reduced but keep the 2k set aside as a fixed total cost.

2. Immedistely set up a savings account for 100 euro per month and treat it as a bill. This will start to help you learn to save.

3. Calculate what you need to live on, groceries, lunches, eating out etc. For example 1k, embed this figure in your head and start tracking on an app like Revolut or the one you've mentioned. It is amazing when you know you have overspent one day and that you'll skip the starbucks tomorrow.

4. Set aside 250 euro as real discretionary spend. I call mine a slush fund and I use it for purchases in the month like a new tshirt. It is amazing how much frivolous spending this has presented.

5. Debts - just keep paying them and as you get better with month to month spending you can start to tackle.

My biggest piece of advice is to start simple and keep building and trying. What you should ultimately aim for is something simple like the 50-30-20 rule.

The basic rule is to divide up after-tax income and allocate it to: spending 50% on needs; 30% on wants; and socking away 20% to savings.
 
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