How can I make the most of my finances and build savings?

H

Havana

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254
Age: 34
Spouse’s/Partner's age: N/A

Annual gross income from employment or profession: approx €48000


Type of employment: PAYE

In general are you:
(a) spending more than you earn, or
(b) saving?

Neither- not accumalating debt but no savings either

Rough estimate of value of home: Not really sure now - recently bought for €205k
Amount outstanding on your mortgage: €186,000
What interest rate are you paying? 2.55% until Apr 10

Other borrowings – Loan at €200pm

Do you pay off your full credit card balance each month? N?A
If not, what is the balance on your credit card?

Savings and investments: None

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Ages of children: No

Life insurance: €83pm

Other outgoings - not yet sure how my bills will work out as I have only moved in but my ESB is currently at €17pm on monthly equaliser. Still waiting on first Gas bill. Mobile approx €70pm. Budgeting €200pm for bills and grocery shopping at present.

So a month looks like this:

In: €2860 approx (sometimes a little more, sometimes a little less, but not much. Pension and VHI paid)

Out: €718 Mortgage
€83 Life Ins
€200 Loan
€200 bills etc

This leaves me with a balance of €1659pm

What specific question do you have or what issues are of concern to you?

I have recently purchased a property and have now no savings. I want to build them back up. I plan to transfer approx €200pm into an account (but what type) to cover annual bills such a management fees, TV license, holidays (my only real indulgence), GP's etc. I also want to save another €500pm.

Basically i am wondering what is the best way to save these - ideally i do not want too easy access to the savings.

I feel I am finally in a decent financial situation and feeling comfortable enough, so i want to make the most of that and not flitter it away as i might have done in the past.

The one fly in the ointment is the loan, which is a car finance on a vechicle that i was not in possession of. Ex had it, but the finance is in my name. The payments of over €300 pm had been causing me difficulties (much higher outgoings when renting) so I surrendered the car - not yet sure of the balance remaining (maybe €5-6k) but hope to negotiate repayments at €200pm. I wonder should I put off saving and throw all the money off the loan - my reluctance to do this is probably misguided hope that he will one day actually make a payment (I have paid it all for 2.5 years).

I guess I just want to make sure i am making the best choices at this point so any help or insight much appreciated.

Thanks
 
I think 200 a month for bills and groceries seems a little low, I would be inclined to double this.
In relation to annual expenses you mention such as maintenance fees, tv licence etc, I think the best think to do here is to itemise all the annual bills total them and then divide by 12. I would round up the figure to the nearest 50 and put that away. Perhaps a post office account if you have one near by as you would not be so inclined to dip in.
I take home about 300 more a month than you with similar mortgage payment and manage to save 1000 a month. I socialise and holiday a lot.
 
niceoneted said:
I think 200 a month for bills and groceries seems a little low, I would be inclined to double this.
In relation to annual expenses you mention such as maintenance fees, tv licence etc, I think the best think to do here is to itemise all the annual bills total them and then divide by 12. I would round up the figure to the nearest 50 and put that away. Perhaps a post office account if you have one near by as you would not be so inclined to dip in.
I take home about 300 more a month than you with similar mortgage payment and manage to save 1000 a month. I socialise and holiday a lot.
Click to expand...

Thanks for that - and for pointing out the bill amount - I had done my sums wrong and taken the monthly bill amount and a weekly shopping budget. So I will readust that.

Happy enough with the annual expenses - monthly it works out about €140 so I've rounded that up.

I was thinking of saving the €500 initially rather than over commit myself and then reassess in a few months. But the more I think about it the more I think I should just throw it off the loan, as much as it sticks in my gut.

Thanks again.
 
Just as a general point - the first 6 months to a year after buying a house can cause financial strain. It took me about 9 months after buying my new house to get back on an even keel with my finances and start saving properly again. Every time I went into Woodies, I seemed to spend €300 on various household things. While planning for savings is always good, don't get too stressed about having to save at this particular time. I'd start low (e.g. 250 a month) and reassess in 3 months time. €500 a month on the figures you gave looks a little high. I also agree that you should throw more money at the loan, even if it's just an extra 100 a month. When you rid yourself of that, it'll be a weight off your shoulders.

Your life insurance looks high at 83 a month. Mine is about 30 a month. You should also have house insurance costs (perhaps that is included in the 83 a month?). I think that 140 a month for all those expenses and bills looks light if it includes gas and electric (and broadband/TV).
 
Thanks. I do agree about the expenses of moving and have factored most of those in, with a plan to start this process in a couple of months.

Readjusting the figures so

In €2860

Out
Mortgage €718
Life Ins €83 (also inc Critical Illness. No house ins, have block ins and waiting till I have some contents before I insure them!!!)
Yearly Expenses €200
Bills €400 (inc groceries, mobile, gas and ESB - no TV packages or landline.)

Balance €1459

I think for now I am going to put €400 off the loan which leaves me more than enough for everyday life!!! And picture frames!!!!

Thanks again, always good to get other perspectives on things.
 
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