Money Worries

Age: 26
Spouse’s/Partner's age: Single

Annual gross income from employment or profession: 40k
Annual gross income spouse:N/A

Type of employment: Professional

Expenditure pattern: In general are you spending more than you earn or are you saving? Seem to be!

Rough estimate of value of home 310k
Mortgage on home 279k
Mortgage provider:AIB
Type of mortgage: Discount Tracker (1 yr discount rate)
Interest rate 4.6%

Other borrowings – car loans/personal loans etc Car/college Credit Union ,loan, owe parents 4k

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 650.00

Savings and investments:None

Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: None

Life insurance: Yes, as a result of mortgage. Cheapest 1 I could find!


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

I am worried about my money or lack thereof! My mnthly mort repayments are 1100 & my CU repayments are 310.00. This leaves me with roughly 250.00 disposable income each wk, to run car, get food etc. My mort repayments are based on 100% mortgage & am int only at the moment. Discount rate due to expire in March & bank have quoted me a rate of 5.1%. They wil not consider consolidating my loans, but will allow me to continue on int only for an additional yr. I dont want this as am anxious to begin repaying some of the principle. However, as capital repayment amt to approx 1400 p.m, I dont think I could afford this in addition to my CU loan repayments.

I am also worried as I have no health ins nor pension and still owe parents 4k loaned to me to furnish hse. I have no savings whatsoever.

Any suggestions as to how I can begin to progress from this point would be much appreciated.
Thanks.

I don't mean to be unhelpful but I think that is a very high mortgage for your earnings and don't understand how the bank gave it to you.

What you probably need to do it get a room rented out asap to help you cover your mortgage payments easier (but maybe use the extra money to pay off credit card (firstly) and credit union and parents after that).

If you could rent out a couple of rooms all the better.

Also maybe get a weekend job in a bar or something to top up your earnings a bit for the short term and look into further training that could gain you promotions/payrises in the long term.

Good luck!

It might also be an idea to look at asking your employer for a rise if you haven't approached them yet and feel you are doing a good job

Is the 250 per week for car and food only?
Is it supposed to cover bills etc for month also, ie esb, phone etc?
It is possible to live on 250 per week.
Though obviously decreasing the debt is a nicer option.

How much of your monthly expenditure is discretionary, e.g. do you need a car? What can be cut out/reduced?

Renting a room is a good idea, as they could help toward your out-goings, but you've a big mortgage - almost 7 times your salary, and probably about 40% of your current monthly net pay(about 50% when you start repaying capital). Would you consider selling up and renting for a while?

I'm sorry to hear of your situation.a few years age when things where tight for me,young kid's mortgage all that. I was in similar situation.When you break it down there are three ways of sorting things out.Cut costs or Increase your income or sell assets to clear dept.I decided to increase my income around my core salary (preferably tax free).We took in foreign students ,this is still an option for you .This proved quite fun in a way ,and added a nice mix to young family.there are plenty of schools looking for good quality homes I'm not sure of the rates now but they where quite good.In the evenings I took a job with a local takeaway and this proved very lucrative, most nights I made well over 120 euro for a few hours work.tax free.I too am a professional and at times it was hard especially when you delivered to old school friends etc but you do what you have to do right.What I'm saying is to look around and see what your options are I had a house and a car as assets and I used both to their full potential to clear loans etc and get back on track.Hope this is of some help.

€250 a week is quite a lot for one person to live on. Unless your household bills are very high or you are spending a lot on motoring I don’t see a problem here. So the issue is how do you come up with another €400-€500 a month in after tax income. Renting a room, delivering take-away, working in a pub etc will all generate at least this amount. It can also be fun to work at a totally different job in the evening and if you are just doing a standard 39 hours in your day job then one or two evenings a week should be no big deal.

floydmuppet said:

In the evenings I took a job with a local takeaway and this proved very lucrative, most nights I made well over 120 euro for a few hours work.tax free.

Click to expand...

Since when is payment for delivering takeaway tax-free? Or are you recommending tax evasion?

It's worth keeping in mind that many employment contracts specifically forbid working elsewhere-sometimes only within the same industry, but there are restrictions.

Of course you can say "it's none of their business", but I don't know if it will wash if you are caught out. Equally I'm not sure if these restrictions are enforceable/legal.

I think most restrictions of that type refer to anything which affects your day job - working in a related industry or working so much it affects your performance etc.

CCOVICH said:

It's worth keeping in mind that many employment contracts specifically forbid working elsewhere-sometimes only within the same industry, but there are restrictions.

Of course you can say "it's none of their business", but I don't know if it will wash if you are caught out. Equally I'm not sure if these restrictions are enforceable/legal.

Click to expand...

In my experience they are unenforceable.

Thanks to everyone for your replies.

Moondance, I appreciate that my mort is v high for my salary but bank had no problem giving it to me. Id imagine my profession and supposed high earning potential had a lot to do with it!

When food, car ins, tax, petrol, esb etc. are paid, Im not left with much over €100 per wk for myself. I dont want to portray too much of a 'poor me' attidue but thats not a lot of money left over for socialising and or saving anything/paying back parents. Especially after about a million years spent in college to qualify for a 'decent' job! I do need a car as there is no public transport from where hse is situated to workplace.

My last hol was very kindly paid for by my boyf as a present, no plans for any hols this yr though! I 'll just have to look into renting a room (2 1/2 bed!). Either that or look into getting a job in the capital where I think I would be on a lot more money. If I could rent out the hse (dont know what market is like for that is area in question), Id be hoping that additional salary would cover deficit & rent & cost of living in dub??? (& hopefully some left to save). Im a bit afraid to look too deeply into this prospect though as I've read (on this site) that the Rev dont allow this & I could get into a bigger mess than I am now??
As for selling the hse - no hope. For Sale signs everywhere & nothing moving..

You can rent the house out after you own it for 2 years (I take it that you are a first time buyer, if you posted it I missed it). This may not be needed but consider the following if you start to get worried and think about selling. Therefore you have the 12 repayments after you come off the discount rate to deal with before you try to rent it out. In practice you can start to advertise a month before the 2 years are up letting potential tenants know when it's available.
I still think that renting a room is your best bet. The option of getting evening work comes next. If you are only working a 39/40 hour week at the moment this should not be a problem.