Guidance for youngish, average family planning for future..

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YoungBonnie

Registered User
Messages
4
Hi all,

I feel like we are an average enough family with decent jobs and but we'd like to put some structure on our future so looking for advice about what to do with spare cash, pension planning and children's investments.
We are probably a little risk averse and frugal enough. Very conscious of the squeeze that the cost of living increases are putting on everything e.g. utilities, groceries, fuel etc.
We are both working in the civil service, details below:

Personal details
Age: 37
Spouse’s/Partner's age: 36
Number and age of children: Two – 2 years old and 8 months old

Income and expenditure
Annual gross income from employment or profession: €73,000
Annual gross income of spouse: €64,000 (80% due to parental leave)

Monthly take-home pay:
- Me: €3,580
- Spouse: €2,800

Type of employment:
- Me: Civil Servant
- Spouse: Civil Servant

In general are you:
(a) spending more than you earn, or
(b) saving?
Personally, saving more; approx. €800 a month.
Contributing €700 per month into Joint A/C (spouse contributing €600pm) which probably breaks even on our expenditure but Child Benefit is also being paid into this account.

Summary of Assets and Liabilities
Family home worth: €320k (estimated value, bought for €235k in 2020 & renovated) with a €186k mortgage remaining.
Cash of €6k in Joint A/C
Personal cash of €155k in non-performing savings accounts

Pension:
- Me: Civil service pension with 7 years service
- Spouse: Civil service pension with 8 years service & contributing to AVC (Cornmarket)

Family home mortgage information
Lender: BOI (transferred from KBC)
Interest rate 3.3% variable (3-year fixed ended in Aug ’23)

If fixed, what is the term remaining of the fixed rate? N/A
(No need to tell us the monthly repayments or what term is left)

Other borrowings – car loans/personal loans etc - None
Do you pay off your full credit card balance each month? No Credit Card
If not, what is the balance on your credit card?

Buy to let properties – N/A
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:
Do you have a pension scheme? Single Public Service Pension Scheme
Do you own any investment or other property? No

Other information which might be relevant:
Life insurance: Mortgage Protection
Spouse has Salary/Income Protection with Cornmarket

Main queries:

I have a few queries, apologies.
  • How to best invest for children’s education etc. (Child Benefit is currently paid into joint account and is being spent as normal income)
  • Should we overpay the mortgage? Should we fix for a few years?
  • Should I start an AVC? And what’s the best and most economical route?
  • What should I do with the cash I currently have which is not performing. Considering the amount, I could put a portion away for a longish period
 
YoungBonnie said:
Personally, saving more; approx. €800 a month.
Contributing €700 per month into Joint A/C (spouse contributing €600pm) which probably breaks even on our expenditure but Child Benefit is also being paid into this account.
Click to expand...

YoungBonnie said:
Cash of €6k in Joint A/C
Personal cash of €155k in non-performing savings accounts
Click to expand...

Keeping finances separate is costing you as a family a fortune. Unless your marriage is in trouble, pool your finances. Have an open conversation about it, make a household budget. Something that can work for some families is both salaries paid into a joint account, and then you each take out an agreed amount for 'personal' money. But you both need to sit down and have an open honest conversation about it.

You haven't said how much savings your spouse has.
You alone have enough cash lying around to reduce the mortgage to 30k! Do that, and there's a clear path to having it completely paid off before either of you turn 40. Not a bad place to be!

Now all your questions about mortgage have disappeared, and you can focus on building wealth.

You're both in secure jobs, so you don't need to worry much about having an 'emergency fund', but do budget for planned expenditure; house improvements, changing cars, etc.

I'll leave others to answer your questions about pensions as there are specifics to Civil Service schemes. However, you do need to look beyond Cornmarket to get lower charges.
 
RedOnion said:
Keeping finances separate is costing you as a family a fortune. Unless your marriage is in trouble, pool your finances. Have an open conversation about it, make a household budget. Something that can work for some families is both salaries paid into a joint account, and then you each take out an agreed amount for 'personal' money. But you both need to sit down and have an open honest conversation about it.

You haven't said how much savings your spouse has.
You alone have enough cash lying around to reduce the mortgage to 30k! Do that, and there's a clear path to having it completely paid off before either of you turn 40. Not a bad place to be!

Now all your questions about mortgage have disappeared, and you can focus on building wealth.

You're both in secure jobs, so you don't need to worry much about having an 'emergency fund', but do budget for planned expenditure; house improvements, changing cars, etc.

I'll leave others to answer your questions about pensions as there are specifics to Civil Service schemes. However, you do need to look beyond Cornmarket to get lower charges.
Click to expand...
I didn't pick up on the savings being personal. In that case, if your spouse has additional savings, get rid of the mortgage. With that done, the funds that were previously going to the mortgage can build up an emergency fund, then go towards pensions and investments.
 
You didn't ask this but I would want a sizeable, say 20 year, non-indexed convertible dual term life policy.
 
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