Where to next .... Starting Financial Plan at Mids 30s

Discussion in 'Money makeover' started by Rache Eve, Nov 3, 2016.

  1. Rache Eve

    Rache Eve New Member

    Posts:
    2
    Age: 33
    Spouse’s/Partner's age: 35

    Annual gross income from employment or profession: 28000
    Annual gross income of spouse:25000

    Monthly take-home pay 2000 /1800

    Type of employment: e.g. Civil Servant, self-employed

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

    Rough estimate of value of home
    Amount outstanding on your mortgage: 0
    What interest rate are you paying? Renting.

    Other borrowings – car loans/personal loans etc. :0

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

    Savings and investments: Lumps Sum set aside for property purpose only

    Do you have a pension scheme? No

    Do you own any investment or other property? No

    Ages of children: 0

    Life insurance: No


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



    We had a goal of to save a specific sum to buy a property. We have reached this amount and we think it’s possible to be mortgage free. When buying a property in the future, this figure is to cover all costs involved in the purchase of the property.

    We are happy with the lump sum that we have reached and it is now set aside to buy a property when the time is right for us.

    Additional €10k available per person for emergency.

    Concerns:

    1) Lump sum what is the best to do with it now until we wish to buy a property. Thinking of purchasing a property in the next 3- 5 years.

    What could we take advantage of … money sitting at almost 0% but what to where to put it.
    Having looked at investment plans with banks over recent year but never have followed through. Possible because we didn’t know enough about investments and we might have needed the money, we are very risk adverse.



    Currently Rent (Shared accommodation) Renting with others is manageable for the moment. We rent to save. If we were to rent a property it would cost approx. 1000 pm. Renting now for 15 years approx. 70 per person per week approx



    We should have a financial plan, but haven’t to date as there was only one goal in mind…saving for property. From here, how should we structure our income going forward.


    For short medium and long term?

    Two single account and joint account?


    Additional upcoming expenses over the next 2-3 years:
    Changing car 5-8K (Second Car?)
    Travel 5-8k each
    Education


    Hard few years putting as much aside as possible to reach our goal, and for this reson we wnat o be smart moving forward.

    We need advice on what to do next.

    Thank you for reading and I look forward to getting opinions and ideas on what to do next.

    Rachel - Eve
     
  2. GirlTuesday

    GirlTuesday Registered User

    Posts:
    28
    If you've enough saved to buy a house outright why don't you go ahead and buy one now?
     
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  3. moneybox

    moneybox Frequent Poster

    Posts:
    715
    +1 was thinking same thing. 3 to 5 years is long way down the road, however, if you purchased now it would be good chunk off the mortgage a few years down the line.

    5 to 8k each on travel over next few years is fairly steep, you are in your mid thirties not early twenties, babies, biological clock springing to mind!!
     
  4. username123

    username123 Frequent Poster

    Posts:
    1,233
    As far as I can tell, OP wont be getting a mortgage. They have a lump sum to cover the entire cost of the house.

    What is screaming at me is talk of investments with the lump sum. I cannot stress enough that you should leave this lump sum on deposit in 1 or more instant access accounts (no more than out for 100K per institution, to stay under bank guarantee). Last thing you want to do is invest the money, market drops and then you dont have enough to buy a house you want. DO NOT INVEST THIS MONEY!

    Agree 16K on holidays sounds like alot. What education do you mean? Do you really need a second car? 10K emergency fund each is good. I'd continue to save a good chunk of what you would have paid on a mortgage, nice to have that on hand/invested if you dont need it now. Also if ye were private sector, I'd suggest starting a pension ASAP. Im not sure if this is relevant for public sector person. Certainly I would have thought the self employed person should start one anyway.
     
  5. GirlTuesday

    GirlTuesday Registered User

    Posts:
    28
    What I'd like to know is how you managed to save enough money to buy a property outright on incomes as outlined above.
     
    Chantilly likes this.
  6. He-Man

    He-Man Frequent Poster

    Posts:
    84
    If I understand correctly, the OP are a couple that may not want children, so the biological clock warning is irrelevant.
    Travel cost of 8k seems high but in the absence of child-related expenditure perfectly reasonable. Life is for living.
    I also would like to understand how much is saved up, how it was saved up, and the nature of the property the couple are interested in.
     
  7. Rache Eve

    Rache Eve New Member

    Posts:
    2
    Hi Everyone


    Thanks for all the reply’s.


    GirlTuesday -Our reason not to buy a property now is, we may be changing living location over the next 2 years. With this in mind we don’t want to buy a property and not be able to live in it.

    We have achieved our lump sum from living sensibly over the year, we both have been very strong savers form when we both started work at age 16. The income outlined about is minimum annual wages. There are years where we can earn additional income, the amount isn’t guaranteed so I didn’t factor it in above.

    We have both kept our cost to a minimum and have lived within our means. Only purchasing what we could afford. Up to now we have very minimal out goings and for this reason we have been able to save hard.

    Our key interest over the next 2 years is in travel and education. On the outset 5-8k sound steep for travel. If we were to travel to China Australia South Africa these locations would be costly to visit!


    If possible at the time when we do purchase, we would like to be mortgage free should circumstances allow. At that stage it might not be best advice to use entire lump sum for property! But I guess we won’t know until then?



    We might be able to survive with one car , I think if circumstances change its best to factor in a second.


    Thanks username 123 for the advice. Interesting reading your review of what we should do.

    He – Man. Yes, I certainly agree with you.... Live is for Living. That’s why we have made scaifices and worked hard todate to set ourselves up to be in a situation where we can (if possible) be mortgage free, enjoy travel and if we have kids to be able to provide a comfortably life for them.



    Thanks for taking the time to read and rely. The post replys give me interesting and additional items for thinking about......

    Rachel - Eve
     
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