Finance_Novice
Registered User
- Messages
- 12
Age: 38
Spouse’s/Partner's age: 36
Annual gross income from employment or profession: €80,000 base + ~€10,000 bonus + ~€15k shares + other healthcare benefits
Annual gross income of spouse: €45,000 (€57,000 base but only working a 4 day week)
Monthly take-home pay: €5,500 (after pension contributions, AVC, contribution to stock purchase plan)
Type of employment: Both employed in the private sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving
Rough estimate of value of home: €325,000
Amount outstanding on your mortgage: €78,000 (monthly repayment is €356 per month but overpaying by an extra €1,000 per month)
What interest rate are you paying? 2.75% variable
Other borrowings – car loans/personal loans etc - None
Do you pay off your full credit card balance each month? Yes (only used sparingly)
If not, what is the balance on your credit card? N/A
Savings and investments: €75,000 savings, ~€55,000 company shares (APSS and RSUs vesting over 4 years and always sold immediately to reduce exposure to one company)
Do you have a pension scheme? Yes
Me - 10 years DB before moving to DC. Contributing 12% to pension plus employer contributing 8%. DB pension worth ~€9,000 per year at retirement and DC pension fund is currently worth €65,000
Wife - Contributing 7% and employer contributing 5%. Currently worth €55,000
Do you own any investment or other property? No
Ages of children: 2 years old and one on the way in May
Life insurance: Yes for me (3 * salary plus spouse/child pension) but no for wife. Planning to get one for my wife soon too
What specific question do you have or what issues are of concern to you?
In the near future, our only planned major expense is a new car for my wife costing ~€20,000. She will likely reduce her working hours even further and possibly quit work altogether if we are lucky enough to have a third child. We want to have a solid financial strategy to allow her to quit work if she decides to and still remain comfortable financially (fund our children's education, regular holidays etc.).
1. Our strategy has always been to repay our mortgage as quickly as possible while maintaining our lifestyle but having watched "How to be good with money" with Eoin McGee and following him on Instagram, we are wondering if that is still the right strategy. He suggests that investing into a fund is a better use of excess cash than overpaying the mortgage. I've always hated debt so clearing off the mortgage early would give me peace of mind but only want to do that if it makes sense financially. We know we have too much cash in savings so would like advice on whether it would make more financial sense to overpay the mortgage or invest it our excess cash (excluding saving for a rainy day) into an investment fund?
2. Another question we have is whether my wife should also maximise her pension contributions and should we prioritise this over any other fund investment/clearing the mortgage?
3. Lastly, is my employers 8% contribution to my pension included in my overall 20% allowance or can I increase my current 12% contribution?
Spouse’s/Partner's age: 36
Annual gross income from employment or profession: €80,000 base + ~€10,000 bonus + ~€15k shares + other healthcare benefits
Annual gross income of spouse: €45,000 (€57,000 base but only working a 4 day week)
Monthly take-home pay: €5,500 (after pension contributions, AVC, contribution to stock purchase plan)
Type of employment: Both employed in the private sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving
Rough estimate of value of home: €325,000
Amount outstanding on your mortgage: €78,000 (monthly repayment is €356 per month but overpaying by an extra €1,000 per month)
What interest rate are you paying? 2.75% variable
Other borrowings – car loans/personal loans etc - None
Do you pay off your full credit card balance each month? Yes (only used sparingly)
If not, what is the balance on your credit card? N/A
Savings and investments: €75,000 savings, ~€55,000 company shares (APSS and RSUs vesting over 4 years and always sold immediately to reduce exposure to one company)
Do you have a pension scheme? Yes
Me - 10 years DB before moving to DC. Contributing 12% to pension plus employer contributing 8%. DB pension worth ~€9,000 per year at retirement and DC pension fund is currently worth €65,000
Wife - Contributing 7% and employer contributing 5%. Currently worth €55,000
Do you own any investment or other property? No
Ages of children: 2 years old and one on the way in May
Life insurance: Yes for me (3 * salary plus spouse/child pension) but no for wife. Planning to get one for my wife soon too
What specific question do you have or what issues are of concern to you?
In the near future, our only planned major expense is a new car for my wife costing ~€20,000. She will likely reduce her working hours even further and possibly quit work altogether if we are lucky enough to have a third child. We want to have a solid financial strategy to allow her to quit work if she decides to and still remain comfortable financially (fund our children's education, regular holidays etc.).
1. Our strategy has always been to repay our mortgage as quickly as possible while maintaining our lifestyle but having watched "How to be good with money" with Eoin McGee and following him on Instagram, we are wondering if that is still the right strategy. He suggests that investing into a fund is a better use of excess cash than overpaying the mortgage. I've always hated debt so clearing off the mortgage early would give me peace of mind but only want to do that if it makes sense financially. We know we have too much cash in savings so would like advice on whether it would make more financial sense to overpay the mortgage or invest it our excess cash (excluding saving for a rainy day) into an investment fund?
2. Another question we have is whether my wife should also maximise her pension contributions and should we prioritise this over any other fund investment/clearing the mortgage?
3. Lastly, is my employers 8% contribution to my pension included in my overall 20% allowance or can I increase my current 12% contribution?