What to do with Lump sum & Childrens allowance?

FredH

Registered User
Messages
5
Age:
41
Spouse’s age:
42

Monthly take-home pay:
E9,250

Type of employment: e.g. Civil Servant, self-employed
Multi-national
Public servant

In general are you:
(a) spending more than you earn, or
(b) saving?
- Saving E250/mnth + Children's allowance of E280/mnth,


Rough estimate of value of home:
E800,000

Amount outstanding on your mortgage:
E320,000
What interest rate are you paying?
3% BOI, (switch ~each year to get 2% back), E2,000/mnth

Other borrowings – car loans/personal loans etc
- Car loan - ~E16K - E350/mnth / 4 years.

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

Savings and investments:
40K - Just matured State Savings.
18K - Children's allowance each month. E280- currently in state savings.
E250/mnth into short term savings to cover unexpected items,

Do you have a pension scheme?
- Private DC pension + a DB Pension capped at ~12K/year payout
- Public service DC pension.

Do you own any investment or other property?
- Yes, 50% of a ~E200K property with ~E100K loan on a 3% mortgage. Rent = monthly mortgage repayments, 10 years left.

Ages of children:
7
5
1

Life insurance:
Yes/40/mnth

What specific question do you have or what issues are of concern to you?
Where to invest 40K Lump sum?
Where to keep saving children's allowance for education funds - State savings does not feel like right option for long term (~15 years). What investment fund is typical for this or how to go about setting it up?
 
Last edited:
What does maxing the mortgage mean?

Mad having a car loan with €58k in cash, I would pay it off now.

What rent are you getting on the investment property? Would there be any CGT due if you sell it?

How secure is the person's job in the multi national? If they lost it tomorrow could they get something similar quickly?

When will the education costs kick in? Will your kids be going to a private junior or senior school?

What do the rest of your monthly expenses look like. You have close to €7,000 a month after paying your mortgage.

Generic advice would be-
1- Pay off car loan
2- keep rainy day fund or monthly expenses * 6
3- Maximise pension contributions
4- Pay any surplus off mortgage
5- You are earning enough to pay education costs out of cash flow so no need to keep additional savings for that- pay it off the mortgage
 
My own view is state savings the best product for the sums involved. It is risk and tax free, although the returns are indeed super low.

With capital markets investment you have fees, potential losses and then CGT on any upside.

Your youngest will be in FTE when both of you are over 60. A public service or pension fund lump sum may help you fund this if you can or want to access it that early.
 
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