What to do next with my finances?

• Money makeover

Key Post Basic information required for the "Money​

Personal details

Personal details:
Your age: 46
Your spouse's age: 46
Partner's age if not married:

Number and age of children: 2 (7 and 9)


Income and expenditure
Annual gross income from employment or profession: 65
Annual gross income of spouse/partner:60

Monthly take-home pay:7k

Type of employment - e.g. Employee or self-employed. Private sector
Employer type: e.g. public servant, private company.

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


Summary of Assets and Liabilities
Family home value: 400k
Mortgage on family home: 88k
Net equity:

Cash:1k
Defined Contribution pension fund:150k
Company shares : 0
Buy to Let Property value: na
Buy to let Mortgage:na

Total net assets:


Family home mortgage information
Lender AIB
Interest rate 2.25% Green
Type of interest rate: tracker, variable, fixed.
If fixed, what is the term remaining of the fixed rate?
If tracker, what is the margin e.g. ECB + 1%

Remaining term: (Original term is not relevant): 5 years
Monthly repayment:1429

Other borrowings – car loans/personal loans etc

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

Pension information

Value of pension fund:150k Me
Spouse 120k

Currently pay 10% and company an additional 5%.

Buy to let properties
Value:
Rental income per year:
Rough annual expenses other than mortgage interest :
Lender
Interest rate
If fixed, what is the term remaining of the fixed rate?

Other savings and investments:
30k zurich prisma 5 contribute 300 monthly
1k emergency fund



Other information which might be relevant

Life insurance: yes 4x salary through work plus 75% long term illness.
200k on another policy plus 30k cash for long term illness.

I will finally have cleared all my short term debt by end of month. Zero car loans, loans or CC. Mortgage has 88k remaining. Have 5 year plan for this.

My question is what should my priorities be now?

I was thinking of:
1. Built emergency fund to cover 6 months of expenses
2. When 1 is done add 500 per month to existing prisma 5.
3. Max out pension contributions


Not sure if this is a good idea or not. Any guidance appreciated.

I would love to chat to a financial advisor but they all seem to be pushing products.

you should be maxing out the pension before increasing the prisma 5 investment.

I would even stop contributing to the Prisma fund and max your pensions as soon as possible as the tax advantage is lost if not used on a yearly basis while you can always increase your contribution to the Prisma fund in the future.

Start with more basic stuff, review your tax position, are you claiming for everything you can claim for? Have you done a retrospective claim for past years for health etc. It's amazing what people forget to claim for sometimes.

I would focus on building up a decent rainy day fund first so you don't have to go into high interest debt if an issue occurs

What life assurance does your spouse have in place. Were something to happen them, are you in financial difficulty?

I'd also consider other options then just one fund, diversify the portfolio a bit more.

I would also look at your level of expenditure. You might have childcare costs that are not mentioned but 5200 expenditure after accommodation is for me quite substantial considering your children ages. Primary school years are not the most expensive (if there is no or little childcare involved). Review your expenses and see what you can reduce, sometimes it can have very little impact on your quality of life.

Thanks for all the advice given here.
I will build up emergency fund for now.

I am cautious on advice about not contributing to Prisma and maxing out pension. I understand that I would have to only pay 488 after tax to max. However, would not be able to touch that until retirement. It seem like a long time away now. I may never actually see it and if anything was to happen to me how much of my pension would my family get? (Morbid I know!!)

My OH has their life assurance through work.

We have <300 month in childcare costs.
A lot of out income to date has been put towards paying down debt and overpaying mortgage.

We are in a space now where we want to plan for future without debt.

brokeagain said:

I am cautious on advice about not contributing to Prisma and maxing out pension. I understand that I would have to only pay 488 after tax to max. However, would not be able to touch that until retirement. It seem like a long time away now. I may never actually see it and if anything was to happen to me how much of my pension would my family get? (Morbid I know!!)

Click to expand...

Assuming you've filled in a letter of wishes for the Pension Trustees, your family should receive all of your pension should you die. The letter of wishes help the trustees, but having a will even more so, so get that squared away if you haven't.

You say retirement looks so far away, and locking up money until then feels hard. But, your pension becomes something you can access from age 50 onwards if you change employer. I'm not saying you should do this, but it might help you feel it's not locked away for what feels like a very long time. If I could give the younger version of myself advice, it would be to max out the pension early on, and get used to not seeing that money as disposable.

kickstart said:

Assuming you've filled in a letter of wishes for the Pension Trustees, your family should receive all of your pension should you die. The letter of wishes help the trustees, but having a will even more so, so get that squared away if you haven't.

You say retirement looks so far away, and locking up money until then feels hard. But, your pension becomes something you can access from age 50 onwards if you change employer. I'm not saying you should do this, but it might help you feel it's not locked away for what feels like a very long time. If I could give the younger version of myself advice, it would be to max out the pension early on, and get used to not seeing that money as disposable.

Click to expand...

I have added my OH and kids as trustees to my pension. Do they actually get the full pot though?
I hear what you are saying on looking back in 20 years time. Good advice there.

brokeagain said:

I have added my OH and kids as trustees to my pension. Do they actually get the full pot though?
I hear what you are saying on looking back in 20 years time. Good advice there.

Click to expand...

Depending on the amount, I guess it could become subject to Capital Acquisitions Tax (Inheritance) if there is enough and it goes over the lifetime threshold for inheritance for your kids. If you have it setup to go to your spouse, then via her estate planning to the kids there should be no CAT/inheritance tax on it.

This is where I read about CAT: Capital Acquisitions Tax exemptions and reliefs

While you might think that your retirement is very far away in your mid-forties, by early fifty you might feel that it is getting much closer and you might even start to think about retiring early. I am just a few years older than you and our early 40s were focused on raising our small children but when my husband hit 48-50, we suddenly realised that time had flew by and that really he wanted to stop working in his early sixties... The plan is now in place so that he can stop in about 10 years. We are fine but I wish I had thought about it a few years earlier.
Your mortgage is small now, I would look at your pension and future plans.

Well done on clearing all debt and over paying mortgage. You have got to good financial position so now want to capitalise on your hard work.

Re emergency fund (I have posted about this recently), do you have family/friends who have instant access to money they could lend you if needed? What is the limit on your credit card(s)? If you have access to money then a large (6 months living expenses) rain day fund is not really needed. There is better uses for your money.

To echo other, maxing out pension for you both should be your priority. I wouldn't worry about not being able to access it, it for use in retirement. Check your work scheme, make sure you are in the correct risk funds and charges are responsible (most work schemes, especially if a large company) have the 'buying power' to negotiate lower fees and 100% allocation.

Finally, enjoy life as well. I would always be thinking about saving however you have to live life as well. Richest man in the graveyard and all that!

TRS30 said:

Well done on clearing all debt and over paying mortgage. You have got to good financial position so now want to capitalise on your hard work.

Re emergency fund (I have posted about this recently), do you have family/friends who have instant access to money they could lend you if needed? What is the limit on your credit card(s)? If you have access to money then a large (6 months living expenses) rain day fund is not really needed. There is better uses for your money.

To echo other, maxing out pension for you both should be your priority. I wouldn't worry about not being able to access it, it for use in retirement. Check your work scheme, make sure you are in the correct risk funds and charges are responsible (most work schemes, especially if a large company) have the 'buying power' to negotiate lower fees and 100% allocation.

Finally, enjoy life as well. I would always be thinking about saving however you have to live life as well. Richest man in the graveyard and all that!

Click to expand...

Thanks for the encouragement and advice. I really appreciate both.
I don't like borrowing from family or friends as it could lead to strained relationships.

I won't be using credit cards in future either due to lack of control in past. It is way too easy to stick something on the card but as I found it's a lot more difficult ult to pay it back before the 22% interest kicks in. It may work for others but definitely not for me.

I will go with 3 months expenses to start and then try to max out pension payments. It really does make sense to start maxing out now.
Thanks again to everyone who contributed here, you have helped me figure it out after mulling over this for months.