Finding it impossible to save

[marvin]

Age: 44
Spouse’s/Partner's age: 41

Annual gross income from employment or profession: €77,500
Annual gross income of spouse: €17,000

Monthly take-home pay €4,900

Type of employment: Both Public Sector

In general are you:
(a) spending more than you earn


Rough estimate of value of home €250,000
Amount outstanding on your mortgage: €250,000
What interest rate are you paying? tracker 1.15% 19 years left, €1139 repayment per month

Other borrowings – car loans/personal loans etc
Credit Union loan of 15,000 - four years remaining - €390 per month

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €2,000

Savings and investments:
€3,000 in wife's credit union account for emergencies

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Ages of children: 12, 10, 3 - childcare costs €600 per month (part-time)

Life insurance: Yes

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

We really need to start a savings plan for the kids' college fund. The oldest is about to start secondary school. The problem is we can never seem to find any extra money at all to put away. In fact the 420 a month we get in child benefit is usually needed to fill in the hole in the current account. The way we structure our finances is that my wife's salary covers the mortgage and mine covers the other bills, food, loans etc. On paper it all seems do-able, albeit a bit tight. The problem is there is always something extra to pay for - whether it's a dishwasher that needs to be replaced, gas boiler fan, kids birthday parties, medical expenses, car repairs etc. etc. etc. etc. etc. We claim all of our tax entitlements.

Our youngest is eligible for the so-called 'free' pre-school year from January which will reduce the childcare by €250 per month - and I am due some pay restorations over the next two years which will be worth about €200 per month.

 

[Mrs Vimes]

First thing you need to do is start a spending diary so that you can see where the money is disappearing to. You should have loads left over each month with about €2,900 after loans, childcare and mortgage. What are you spending on food? Do you eat out a lot? Is money disappearing on coffees, lunches, phones, etc? All the €10 here and there add up very quickly.

Work out where the money is going, then you'll see whether certain treats are worth it.

You are probably paying about 20% interest on your credit card. That means you are borrowing money at 20%. What are you spending it on?

 

[Buddyboy]

A few people recommended You Need A Budget software (YNAB). This would definitely help in identifying where the money is going.

 

[phileasfogg]

What interest are you paying on your credit card per month? Maybe I would pay off the credit card with savings, put it in a drawer and don't use it again ( but it is there in case of a major emergency - it's reassuring to have a back up). If you save the €20 a month you are paying on credit card interest, there will be €1200 there when your eldest starts college. Not much but a start! I find that when you see tiny amounts accumulating to big money it's a great incentive to save more.

 

[trasneoir]

You should have a fair bit of spare income, you just need to learn where it's going.
Check out www.youneedabudget.com
Don't try to budget hard at first. Focus on (both of you) using the iphone/android apps to record your expenses.
Without any conscious sacrifice, you should experience a €300 "raise".