27 years old, starting career, need help planning my financial life

[qwerty-2023]

Hi all, I would love some guidance please! For the past 4 years I only made €18k/year (PhD student) but I finally completed my studies and started working a decently paid job again last month, so now I want to set some financial goals and work towards them!

Personal details
Age: 27 (F)
Partner: 31 (M) - our finances are mostly separate but I'll include everything for context
Children: None - unlikely to change as I've been with my partner for 10 years and our plans are aligned

Income and expenditure
Annual gross income: €42k PAYE + €0-10k self-employed
Partner annual gross income: €50k
Monthly take-home pay: Around €2.6k for me, around €3k for partner
Employment: Fixed-term public sector (me) and permanent public sector (partner)
Are you saving/spending: Usually we each save around €1k/month in our respective accounts

Summary of Assets and Liabilities
My assets: €30k investment bond (global equities index fund) + €5k PRSA (not currently contributing to it) + €2k savings account
Partner's assets: Studio apartment worth €200k with mortgage currently at €100k + around €10k in savings + €5-10k individual stocks
Joint assets: Joint savings account around €10k for emergencies / holidays / repairs
Pensions: we are both in the post-2013 public sector pension scheme (SPSPS) but neither of us is making AVCs
Liabilities: None (except for my partner's mortgage)

Family home mortgage information
(This is the studio apartment mentioned above)
Lender - Avant
Interest rate - 1.95% (fixed for 3 more years)

Other borrowings – car loans/personal loans etc
None (and no credit cards)

Buy to let properties
None

Other savings and investments:
None (all listed above)

Other information which might be relevant
No life insurance but partner has mortgage insurance as required by lender
I think public sector also provides long-term illness protection and death in service

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

My main question is what would you recommend for people in our situation in terms of financial goals? What should we focus on?
I'm mainly asking for myself, but of course me and my partner discuss all important financial stuff and he is also open to advice.
For example, should I save up a cash cushion? Contribute to a pension beyond the default public sector contributions? Invest via another bond?

Another option could be to start saving for a bigger home that we'd own jointly, as we might like more space in the future. However, I'm on a fixed term contract, and in my field, low job security and frequent international moves are very common (for example, I've done two year-long contracts abroad in the past while my partner lived with roommates to cover costs), so I'm not sure tying both of us to a bigger mortgage would be a good idea in case we need to move. More broadly, because I've experienced quite a bit of PhD/work stress lately, it reassures me to keep our very affordable lifestyle in case I need a break later, or decide to go freelance/do consulting full-time, etc. And finally - we both have wild ideas about living offgrid one day, and/or taking over my partner's dad's organic veggie farm, and/or travel the world on a shoestring.....etc etc, so all that to say we are not too pushed about the traditional mortgage lifestyle (the main reason for buying my partner's flat was it saved us a ton of money vs. rent).

Thank you for reading all this, and very grateful for any guidance!!

 

[BoscoTalking]

offering my own take on your situation;
- save enough accessible cash to cover fairly foreseeable risks like if the car breaks down, layoffs, you are sick for a while. Some say 3 month, more say 6 months worth of salary you need to decide what’s enough for your joint circumstances, and once you hit that revisit the idea of another savings goal like mortgage or trip abroad for a period,
- if partner has a work pension and matched contributions he should avail of that, and does his employer provide other insurance that he needs to read up on? as You are not married a pension of your own that you contribute to is important too - why not split your monthly savings into the PRSA?
- are there share schemes he can avail of - if so sometimes they can be worth looking into,
- I think everyone should have a cushion and until women salaries exceed men’s, it applies more to women. Most mams had “pin” money I’m told.

otherwise more broadly -
- invest in your health now, it will could save you later, prioritise dentist and doctor visits, physical fitness and mental health even if the classes or associated costs seem high now - learning to respond to stress and uncertainty is very important and personal, for one person it’s yoga, others run marathons so while it’s not directly money related some people who ignore their health can regret it later,
- invest in yourself - career coach in your area, indépendant financial advice, therapist etc., it might be money well spent compared to getting advice from well meaning strangers online,
- decide what mad ideas are actually doable now or in the near future because putting them off can lead to regrets later!

 

[thedaddyman]

You're in a very decent position given your age, excluding the property you have 60k+ in savings and investments already.

Start with your tax affairs and do a full review of tax for both and ensure you have claimed for everything you can. Also ensure your earnings for your self employed work are taxed properly
As part of the health review, you might want to consider private health insurance.

Do you have a career plan, worth reaching out to some of the employment agencies and see what is out there both now, and when you have finished any studies you are doing. You don't have to move, but see what is there.

 

[qwerty-2023]

Thank you both for your helpful replies!

I thought I'd provide an update as I've made a bit of progress:

1) Secured a higher paying job (60k) and will open an AVC (pension) as advised once I start

2) Decided on some long term goals with partner as advised, such as saving for our next (bigger) place together, though we're still thinking about which "wild" ideas (travel, investing in his family farm, etc.) we should pursue as secondary goals

3) Once I start the new job I'll look more closely at health insurance and other "investing in myself" type of expenses as advised! I already signed up for the income protection plan through my new job, and I have an emergency fund, so those are sorted.

Thank you again for your help!

 

[Clamball]

It is great that your partner and you have such great life goals, it sounds like you are well on your way.

What I would do is
Become legally married - it only costs €200 in the registry office. That way you can both be protected under the family home protection act and you have other protections on your joint assists if one of you were to die.

You and your partner have done great to knock €100K off the cost of the apartment so quickly. If you are planning to buy I would start saving aggressively and get together a down payment which with the with -65K in savings and €100K equity in the apartment.

If you are not purchasing then save for those skills and adventures you are planning for you life, while ensuring you save enough in your pension to be able to afford rentals in your area when you retire.

 

[qwerty-2023]

Thank you @Clamball (and sorry for late reply)! All your advice makes a lot of sense. Though regarding marriage, we are partly putting it off because it would mean me losing first-time buyer status which could come in handy if we buy a new build in the future (under my name), so I guess we now need to decide if that's worth losing peace of mind regarding what happens if one of us has a medical emergency or worse!

 

[_OkGo_]

Though regarding marriage, we are partly putting it off because it would mean me losing first-time buyer status which could come in handy if we buy a new build in the future (under my name)

This makes no sense and is a case of letting the tail wag the dog.

Your sole income would only allow you to borrow ~€240k and with your own €30k deposit, you are looking at properties €250-300k range. Most FTB grants and schemes are based on new build properties so there won't be any in that range

Even the newer FHS First Home Scheme is not much good to you because it is just allowing you to borrow more on your income. I think the max is 20% of property value so you could stretch to a €330k purchase price. Still not realistic for most new builds.

On top of this, you can't really use your partner's wealth because you have to show where the deposit came from when applying for a mortgage. It would look very odd that a 'stranger' would sell a property and gift you the proceeds to boost your deposit. More than likely a bank would insist on it being a joint application if you want to use a bigger deposit.

As joint applicants (married or not), you could potentially borrow €440k with a further ~€160k in cash/equity to reach a max of €600k. That gives you a lot of room to buy something suitable anywhere from €350k upwards which you couldn't do on your own.

Keep it simple and find a place that suits your needs and purchase it together within your affordability when you are ready to do so.

 

[qwerty-2023]

Thanks very much @_OkGo_ , it's really helpful to see the numbers and scenarios. I had a vague idea that HTB/FHS etc. may be handy but didn't put proper numbers on it since we are a few years away from wanting to buy a new/bigger flat. Looking at the numbers now, I can see that a new build is a non-starter on my income alone anyway such that in all scenarios we will most likely buy jointly.