Plenty of income, nothing ever left!

S

siobhank83

Registered User
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9
Age: 32
Spouse’s/Partner's age: 32

Annual gross income from employment or profession: 54,000
Annual gross income of spouse: 55,000
Other income:
Inheritance due of approx 40,000 lump sum this year. Also 160,000 worth (depending on market) of foreign property at some stage in next couple years, rental income from abroad approx 800 euro per month again due when these properties transferred (plus rent collecting in account - approx 12,000 there at the minute)

Monthly take-home pay: about 5,400

Type of employment: public sector (me) private (him)

In general are you:(a) spending more than you earn, or
(b) saving
(c) spending what we earn √

Rough estimate of value of home: 290,000
Amount outstanding on your mortgage: 246,000
What interest rate are you paying? 3.75% = we pay 248 per week

Other borrowings – car loans/personal loans etc: Student loan of 87,000; I pay 275 per week

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

Savings and investments: we save 250 euro per week -about to clear it all out to pay for wedding/honeymoon so will be starting from scratch again

Do you have a pension scheme? HSE plus I pay 69 euro per fortnight AVC; he pays only 100 euro per month BOI pension scheme

Do you own any investment or other property? Just inheritance as above

Ages of children: none - yet!

Monthly bills: Sky 65 euro, Health 67 euro, no travel expenses, life and house assurance 80 euro, phone 42 euro, electricity and gas about 100 per month, Spotify and Netflix (I know...) 25 euro per month, groceries approx 400 pm (Lidl all the way)

I suppose we spend about 300 per week on just 'stuff'. Socialising, clothes, etc.
Also, we are with BOI and are shelling out 50 quid a month on charges. I was thinking of switching to KBC as they have a 4% savers account attached to a current account extra (no fees)?

What specific question do you have or what issues are of concern to you?
About to get married. Have good incomes and mine goes up incrementally every 18 months by about 5,000. Would like to have kids. Student loan will not be paid off for 7 years. Would need bigger house if we have toddlers. I suspect student loan will hamper any efforts to get bigger house and we have no cash left at end of each month. Should have about 40,000 in my hand this year from Irish inheritance - to keep it in savings or to pay a chunk off the loan? Foreign property and accumulating rental income will come when the relevant court transfers deeds - can take a while - so am leaving that out of the equation. (Am under the 225k limit for inheritance tax by the way).
Can anyone see how to make our money work better for us?
I was recently refused a Tesco credit card - CRIF 3 rating of 502 on my ICB account.
Do we need income protection/illness protection/increased pension pots etc?
I should add, our aim is to have a good time and live in the now, but we need to be a bit practical I suppose.

Many thanks. Siobhan
 
First thing is to get yourself sorted with everything on a spreadsheet, as to me there is something missing. You say you have no travel expenses, so no travel tickets, cars, insurance etc? I'm calculating total expenditure = 3,796 euros per month. So where's the other 1,600 euro going?

Monthly take-home pay: about 5,400

Mortgage @ 248 per week = 1,075 month

Student loan @ 275 per week = 1,192 month

Pensions combined = 150 month

Savings towards wedding = 250 month

Groceries = 400

Socialising & Clothes = 300 month

Monthly bills = 379 month (Sky 65 euro, Health 67 euro, life and house assurance 80 euro, phone 42 euro, electricity & gas 100, Spotify & Netflix 25 euro)

BOI bank charges = 50 month

I'm calculating total expenditure = 3,796 euros per month

So where's the other 1,600 euro going?
 
its €300 a week on stuff not monthly from experience you need to keep a spend diary on this
 
bcol1 said:
First thing is to get yourself sorted with everything on a spreadsheet, as to me there is something missing. You say you have no travel expenses, so no travel tickets, cars, insurance etc? I'm calculating total expenditure = 3,796 euros per month. So where's the other 1,600 euro going?

Monthly take-home pay: about 5,400

Mortgage @ 248 per week = 1,075 month

Student loan @ 275 per week = 1,192 month

Pensions combined = 150 month

Savings towards wedding = 250 month

Groceries = 400

Socialising & Clothes = 300 month

Monthly bills = 379 month (Sky 65 euro, Health 67 euro, life and house assurance 80 euro, phone 42 euro, electricity & gas 100, Spotify & Netflix 25 euro)

BOI bank charges = 50 month

I'm calculating total expenditure = 3,796 euros per month

So where's the other 1,600 euro going?
Click to expand...

Hi BCOL, savings towards wedding is per week rather than month, same for socialising so €1084 and €1300 respectively
 
Last edited:
Monthly take-home pay: about 5,400

Mortgage @ 248 per week = 1,075 month

Student loan @ 275 per week = 1,192 month

Pensions combined = 150 month

Savings towards wedding = 1,084 month

Groceries = 400

Socialising & Clothes = 1,300 month

Monthly bills = 379 month (Sky 65 euro, Health 67 euro, life and house assurance 80 euro, phone 42 euro, electricity & gas 100, Spotify & Netflix 25 euro)

BOI bank charges = 50 month

I'm calculating total expenditure = 5,630 euros per month (thanks to Paddy for pointing out my error above)

If i was you, i would definitely use your 40k inheritance to clear your student loan, and also look at other areas of spending where you could make cuts (Socialising & clothes 1,300 is a lot, also groceries just for 2 of you at 400 euro seems high, also sort of your bank account fees), and use the funds to pay off your loan sooner. As long as you have that personal loan, it's going to restrict your ability to trade up to a bigger house, and if kids come along, you'll have childcare expenses too that will restrict you even more.

Your salaries are great and it's easy to live life now when you're young and child free and you are dead right to do so, just would try and tackle that loan now while you can.
 
Thanks... that's what I was thinking. Himself wants to hang onto the 40k for future mortgage deposit but I reckon you're right; no point having a huge debt and 40k side by side. Problem is then should I maintain the same amount 275 per week or keep the 7 year term and pay 180 a week or so instead. I guess I should clear it ASAP.
Going to start keeping an Excel and cutting back on the discretionary spending. I kinda knew the bad news would be to cut back on that!
All this aside, I have cousins with two and three kids making less than half what we make and I just don't know how they do it. I suppose my loan is a big debt but I can't see us being able to afford having kids at the moment - we need to start good habits first.
 
Hi Siobhan

If the money is sitting in your account, you will spend it. No one ever saves what is left at the end of the month. You need to automate your savings, set up a standing order and have a fixed amount go out the day after you get paid.

It's no problem living in the now but if you go through your bank statements, you will probably see money spent on rubbish. Good financial planning is realising that you have a finite earning capacity. You need to accumulate wealth in that period so you can spend it on experiences that will be memorable to you both. I'm not just talking about retirement, which is a long way off for the two of you, there's a lot of living to go on before then. As you ability to earn is your greatest asset at the moment, you need to protect that too in case you are unable to work. It's boring but important.

Start with a spreadsheet on what you spend all your money on each month. It will be an eye opener.


Steven
www.bluewaterfp.ie
 
And don't worry about not being able to afford kids, cos hand in hand with kids goes a huge reduction in socialising :), you'll swap all those nights out and new clothes for creche fees
 
It looks like neither of you have cars, or at least there is no car-related expenditure - loans, fuel, insurance, tax, parking, maintenance.

The spreadsheet is a good idea BUT to get to that stage you will need to become anal about getting, keeping, categorising and retaining RECEIPTS. If you get coffee or park the car for an hour, GET A RECEIPT! If you go to the pub, get receipts and depress yourself adding up the receipts the following morning. Update your spreadsheet(s) daily, you will need more than one. Unless you capture expenditure as it happens I can guarantee you you will be left with unexplained gaps in your memory and in your budget. That's the another trick - set budgets for booze, food, lunches at work, etc. Guess what you're spending at the start and prepare yourself for the shocks as you progress, hopefully at least some of them will be good.

Start out by accounting for all current balances, cash, bank accounts, credit cards, credit union, post office and make sure you track flows between them e.g. 100 quid out of the ATM is 100 quid into the cash account.

HTH
 
Yes he has car with petrol, tax, insurance etc paid by work and I walk to work; similarly his phone and health insurance are paid by work so luckily fewer expenses than most. Also we bring lunch to work (if we get lunch!) so that's not an expense.
The receipts are a good idea. We are terrible for just using the card here and there (hence I have applied to move to KBC current account) and not thinking of how things add up. Maybe using 200 quid cash per week and sticking to it would be better. E.g. husband-to-be just returned from Spar with a 5 euro tube of toothpaste....
 
What happened to "Lidl all the way"?! Biggest issue is spending 1300 per month on unknown expenses. I would immediately set up a standing order for 1000 per month into EBS 3% 1 year fixed regular saver. This way your cash is gone straight away and you have no chance to spend it. This will hurt but still leave you with 300 quid ad hoc spending money after all other bills, food etc are paid.
As someone else said, 400 per month on food (especially in lidl) seems like an awful lot for two people. Should be closer to half that in my opinion.
That's where I'd start anyway.
 
My advice... I don't see any point in collecting receipts and it sounds like a headache. You seem to know where your money is going.

With BOI you need to maintain 3000 in your account to avoid charges. With KBC you have to deposit 2500 per month into a current account to avoid charges. Switch to KBC and avail of their better terms and savings rates. They also do a credit card that offers 1% cash back on grocery shopping. Free money if you're disciplined in paying it off.

300 a week on clothes and entertainment seems like a lot. As soon as you get paid put 100 of that into savings. You should be able to entertain yourself on 200 euro per week (more than a dole payment!).

Limit your opportunity to spend money. Make a list and do all your shopping once a week. Hopefully this will save you heading to Spar midweek and picking up expensive toothpaste.

Hope this helps.
 
Start with your tax, are your set up in the best possible way. Have you claimed for everything you can claim for, lots of people forget about health expenses for example

Agree with other poster on the €40k, reduce your debt

Sorry to be a killjoy but you are spending far too much on clothes and entertainment. If you want to get your affairs in order, that needs to be cut significantly.
 
mathepac said:
It looks like neither of you have cars, or at least there is no car-related expenditure - loans, fuel, insurance, tax, parking, maintenance.

The spreadsheet is a good idea BUT to get to that stage you will need to become anal about getting, keeping, categorising and retaining RECEIPTS. If you get coffee or park the car for an hour, GET A RECEIPT! If you go to the pub, get receipts and depress yourself adding up the receipts the following morning. Update your spreadsheet(s) daily, you will need more than one. Unless you capture expenditure as it happens I can guarantee you you will be left with unexplained gaps in your memory and in your budget. That's the another trick - set budgets for booze, food, lunches at work, etc. Guess what you're spending at the start and prepare yourself for the shocks as you progress, hopefully at least some of them will be good.

Start out by accounting for all current balances, cash, bank accounts, credit cards, credit union, post office and make sure you track flows between them e.g. 100 quid out of the ATM is 100 quid into the cash account.

HTH
Click to expand...


I cant agree more with this more, in fact I would say the spreadsheet is the first and the most important thing for both of you to do because until you can actually know where you are spending your money you wont be able to make proper decisions.
 
PGF2016 said:
My advice... I don't see any point in collecting receipts and it sounds like a headache.
Click to expand...
I would totally go along with this for "casual expenditure". The most efficient way of controlling this is to set a weekly limit and take out that amount in cash each week. Up to you what you spend the cash on but if you go back to the ATM then you need to either justify your extra expenditure as being within another budgeted category or revise your figures. I.e. No point in fooling yourself that casual spending is €100 pw when in reality it is near €200. What doesn't get measured doesn't get done.
 
The OP cannot explain where all the money is going and until such time as she gets a handle on this, the very notion of "casual expenditure" is ridiculous. Unless and until all expenditure is accounted for, all spending is a serious matter.
 
Thanks all for very sensible replies. You are all correct in that, yes, I haven't a clue where the money is going and I need to reign in the spending. I gave Himself some dressing-down for the impulse toothpaste buy!
Good news today coincidentally that I am now getting a 10k pay rise so instead of going on a mad one to celebrate we are treating ourselves to takeaway and that's it! We have agreed 200 cash per week for casual spending. I have a feeling it will not be as 'casual' as previously.
Many thanks again.
 
I'd be going into lockdown for a while until you get control. Even 200 a week for casual spending is a lot, or maybe that's just me showing my age! I'd live on that much in total for a week.
 
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