The correct amount to save

Age: 39
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: €110,000 basic €40,000 bonus €12,000 stocks (stocks bought and sold for me by the company, I don’t actually hold them).
Annual gross income of spouse: €80,000

Monthly take-home pay: €9,250

Type of employment: Both private sector

In general are you: Saving, approx. €4,500 per month (including child benefit and rental income)


Rough estimate of value of home: €400,000
Amount outstanding on your mortgage: €148,000
What interest rate are you paying? 3.3%

Other borrowings – Car loan €15,000

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


Savings and investments:

Cash €49,000

Do you have a pension scheme? Yes, approx. €150,000 fund. Wife has a smaller fund, approx. €40,000

Do you own any investment or other property? Yes former home , Value €365k, mortgage €310k rate 3.8% SVR.19 years remaining. I have had it rented for the last year two years for €1700pm, mortgage is €1984. Fully tax compliant.



Ages of children: two children<10 years old.

Life insurance: Mortgage protection on both houses. Me death in service salary X 4, wife death in service salary X 2. Joint term policy for €1M life cover (€130 per month premium – are we over insured?)


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

Although we are saving a lot each month we are also dipping into savings sending on hobbies/lifestyle. We feel it’s a little bit justified since we have more or less been savers our whole relationship (since late teens). We also both lost family members recently and are realising how short life is so would like to enjoy ourselves a bit more.

Ultimately I’d like to know given the details above what does the forum think is the “right” amount to save every month and not touch. Also the former home, I suspect it’s not a good investment but also feel that every year we keep it we gain more equity which is an asset for future security. Is the logical thing to sell this and pay down the home mortgage?

** edited to add if you think we have too much debt.

Thanks for any input.

You're asking the wrong question. It's not about how much you should have to save, it's what do you want from life and how do you get there? What structures do you need in place so you can get there.

What about your jobs? You're both on good money but are they positions you want to be in for the next 20 years? Or would you like to do something else? Do you work in a company that has people in their late 50's?

What about the kids? Private school or public?

You are saving money but you are doing all the heavy lifting at the moment. Earning the money and getting no return. Why aren't you using the power of capital markets to grow your money without any effort from you?

There's lots of things you and your wife need to figure out first before you put a figure on how much you need to save.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

SBarrett said:

You're asking the wrong question. It's not about how much you should have to save, it's what do you want from life and how do you get there? What structures do you need in place so you can get there.

What about your jobs? You're both on good money but are they positions you want to be in for the next 20 years? Or would you like to do something else? Do you work in a company that has people in their late 50's?

What about the kids? Private school or public?

You are saving money but you are doing all the heavy lifting at the moment. Earning the money and getting no return. Why aren't you using the power of capital markets to grow your money without any effort from you?

There's lots of things you and your wife need to figure out first before you put a figure on how much you need to save.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Click to expand...

Thanks, our jobs are both relatively secure, our careers have progressed well. Personally whilst I like my job, I wouldn't say it's my passion and could easily see myself doing something I really love, even with a much lower salary. Public schools locally are great so whilst we don't rule out private schools it's not a definite.
Mortgage terms remaining is 20 years, we both like the idea of being mortgage free much sooner, but not at the expense of living life. I use overpayment calculators often but never actually take the plunge and pay extra amounts off.
Sorry to be slow but could you elaborate on the bold part.

Invest some of your savings. You are working to earn it, leaving it on deposit. You could invest it and become a tiny owner in companies like Apple, Google, Disney etc. So when people go see the new Star Wars or buy overpriced merchandise in the Disney store, you get a benefit. Buy and hold. If you invest in quality, you will make money in the long run.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)