Moneymakeover 36 preparing for future

R

Roundabouts

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Personal details

Your age: 36
Your spouse's age: 36

Number and age of children: two; 4 & 2


Income and expenditure
Annual gross income from employment or profession: 89k + 22k RSUs (avg last 3 years)

Annual gross income of spouse/partner: 30k (part-time as of 2025 will continue until 2027)

Monthly take-home pay: 3850 + 2150 + 800 (Monthly net RSU)

Monthly outgoings

Car loan 370
Household + Groceries 1500
Childcare 800
Mortgage 730
Kids fund (clothes, toys, activities) 250
Hols fund 250
Misc 300

Type of employment - Employee.
Employer type: private company + public servant

In general are you:
(a) Saving now but historically spending too much


Summary of Assets and Liabilities
Family home value: 370K
Mortgage on family home: 145K
Net equity: 225K

Cash: 10K

Company shares : Unvested RSU of 2.5 years approx 50k

Total net assets: 235K

Family home mortgage information

Interest rate: 2.25% fixed

Remaining term: 22 years
Monthly repayment: 730e (includes mortgage protection)

Other borrowings – car loans/personal loans etc

Car loan of 370e pm with balloon payment due early 2026 of 12k

No Credit Card

Pension information

Value of pension fund: 50k
Spouse: DB

Other savings and investments:

Other information which might be relevant

Life insurance: 75% salary long term illness + 4x income protection

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

I have failed to capitalise on an advantageous situation given reasonable earnings and low costs.
My increased earnings in the last 3-4 years allowed some lifestyle creep, changing cars unnecessarily probably being the primary but not only culprit.

Throughout 2025 I cleared consumer debt of approx 40k and scaled up pension in stepwise manner throughout the year from

2% -> 20% (employer contributes 6%)

On top of maxing out the pension, I am now saving 700e per month + all RSUs with the goal of paying the car balloon early next year and continuing the momentum, increasing savings to 1k pm + RSUs.

We would like to move house but having taken some viewings recently, I am concerned that my position remains too precarious to undertake the mortgage required to get what we want.

My aim is to continue to save as much as possible between now and the end of 2028 with a goal of saving enough for the right house move.

That said, we are eager to move sooner so I'd be interested to get the opinion of people on how we might optimise the current plan, perhaps what sort of savings, timeframe etc people might suggest working towards. We are eager but not desperate.

Currently living in an A2 rated 3 bed semi-d while the estimated cost of the upgrade is probably 250k either same spec as current but bigger or older + renovations.

Thoughts on options I’ve considered;

Should I reduce my pension contributions to clear consumer debt sooner?

Should I reduce my pension contributions to increase savings too and place us in a better position to move sooner?

If yes on either, should I revert back to 2% in the short term to get full employer contribution of 6% or step it back to something in between.
Glaring issue here is that the pension is too light.

Should I continue my current course as set, keep the advantageous mortgage rate and look to move when I have accumulated the bulk or all of the upgrade costs?

I appreciate the above questions regarding a move are very lifestyle specific but interested in thoughts in the context of what’s been shared and obviously any additional advice or suggestions for optimising my approach would be appreciated.
 
Roundabouts said:
Should I reduce my pension contributions to clear consumer debt sooner?
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What "consumer debt" are you referring to?
The only debts that I can see are the mortgage and the car loan.
Roundabouts said:
Should I reduce my pension contributions to increase savings too and place us in a better position to move sooner?
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This key post might be worth reading.

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...
www.askaboutmoney.com
 
Roundabouts said:
Company shares : Unvested RSU of 2.5 years approx 50k
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Personally I wouldn't count these as part of my overall net worth until they have vested. At which point I would liquidate them as soon as it's tax efficient to do so. Holding such investments in your employer is concentrating too much risk in one place.
 
Thanks @Premos
Mentioned above but envisage the cost of new house in the region of 600K all in so taking on approx 250k in additional debt.

Thanks @ClubMan you’re correct, it’s only that debt, reducing pension would allow me not to eat into the 10k savings mentioned. Will likely need to use some so thought adjusting now may be worthwhile especially to increase savings. I’ll read that post.

Fair point on the RSUs but I already take the approach you describe by selling as soon as they vest.
 
I think €10k cash savings with a €12k debt about to come due is very light. Seems prudent to try to build up something approximating six month emergency fund in the short term. I make your monthly expenses something like €4.5k? Would be good to accumulate ~€20k after the balloon payment is accounted for. Might mean reducing pension contribution in the short term.
 
Thanks @wherefore appreciate you identifying that, this is probably the primary concern of mine at present.

I wasn’t sure if it was best to leave the pension alone and cut things tight early next year assuming that things will replenish by end of the year.

If it was 2024, I’d definitely default to emergency fund -> clear debt -> max pension but reading here I can recall others suggesting that clearing the relatively high interest debt may be more advantageous as I’ll still have access to credit in the event of an emergency.

That plus a desire to max pension asap while effectively clearing the debt simultaneously meant pushing the building of a more well funded emergency fund later.

Perhaps that doesn’t apply here and obviously it doesn’t have to be either the min or max. I’m completely open to adjusting.
 
Roundabouts said:
I can recall others suggesting that clearing the relatively high interest debt may be more advantageous as I’ll still have access to credit in the event of an emergency.
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You are where you are with the car loan, so I’d say go ahead and clear that then use the spare €370 a month plus whatever else you have to rebuild your rainy day fund. Your mortgage is a relatively low repayment, plus you have two diversified sources of income. Assuming your wife could go back full-time in public sector if you lost your job, plus you get yourself a decent credit card limit if you don’t already have one (or two!), plus any SW you’d receive if you lost your primary income, I think you can take the chance in this case.

Worth noting you’re in this situation as a result of a massive effort to clear 40k of consumer debt, so well done on that.
 
Roundabouts said:
I have failed to capitalise on an advantageous situation given reasonable earnings and low costs.
My increased earnings in the last 3-4 years allowed some lifestyle creep, changing cars unnecessarily probably being the primary but not only culprit.
Click to expand...
Spilled milk...it is what it is, you can't go back and change it. But you have actively recognised it and cleared a significant amount of consumer debt in the last year so I would say you are back on the right track. Your overall position is not so bad.

Roundabouts said:
We would like to move house but having taken some viewings recently, I am concerned that my position remains too precarious to undertake the mortgage required to get what we want.
Click to expand...
What is your specific concern? Are you worried you will lose your job or just a general affordability worry? If it is affordability then I think you are fine. If it is risk of job loss, then you should probably be more cautious and wait until your spouse is back in full time employment

Roundabouts said:
My aim is to continue to save as much as possible between now and the end of 2028 with a goal of saving enough for the right house move.

That said, we are eager to move sooner so I'd be interested to get the opinion of people on how we might optimise the current plan, perhaps what sort of savings, timeframe etc people might suggest working towards. We are eager but not desperate.
Click to expand...
Personally I think you can do it much sooner and the best thing you can do is go to a broker instead of directly to a bank. Having a car loan is not necessarily a problem as long as you meet all the criteria.

Looking at your numbers:
- as second time buyers, you can borrow 3.5x income so up to €416k. Maybe a little more if you present the RSU's correctly as income
- Using all your equity in your existing your home, this would mean borrowing an additional ~€270k for a purchase price of up to ~€640k
- Your current mortgage is €730/m, 2.25%, 22 years, €145k

To maximise your chances of getting loan approval, you need to be able to demonstrate affordability. To do this you should borrow for the maximum term (but plan to overpay). This would mean a €1750/m, 3.0%, 30 years, €415k.

The bank will stress that figure by 2%, ~€2225/m

If you were to borrow for the car balloon payment, you could borrow €12k at 6/7% for 5 years or roughly €250/m

Your debt repayments would be €2k/m on a net income of €6k/m even with 20% pension contributions. That sounds very reasonable to me so I would not see it as a blocker to acting sooner if it would benefit your family life.

After you speak with a broker, it may still make sense to reduce pension back down to minimum company match (5%). Less so for accumulting funds but to make your affordability look better. Excluding the RSU's, your take home would be be close to €6.7k and with RSU's approx €7.5k. Whether you use the €6k, 6.7k or 7.5k, your monthly debt commitment is 26-33% of your takehome which by most standards is comfortable.

If it was me in your shoes, I would:
- Meet a broker now (December)
- Figure out whether you need to borrow for the car payment
- Build a cash reserve of €30k to pay for the associates costs of buying/selling (EA's, solicitors etc)
- Plan to purchase in 6-12 months
- Reduce the pension to mimimum employer match

After purchasing and the dust has settled:
- make a lump sum AVC for tax year 2025
- increase the pension contributions again
- in 2027, make a lump sum AVC for tax year 2026 to make up for the temporary reduction
- clear the car loan in full as RSU's vest

By 2027, your joint income will have increased again when your spouse returns to work and you will be left with a mortgage payment of €1750 which seems very affordable in your situation and can easily be overpayed while maxing pensions.

Roundabouts said:
I appreciate the above questions regarding a move are very lifestyle specific but interested in thoughts in the context of what’s been shared and obviously any additional advice or suggestions for optimising my approach would be appreciated.
Click to expand...
Personally I would always lean to doing things sooner as long as affordability is good and properly evaluated. There is a non-monetary cost to waiting and trying to build all the funds which is not living in and enjoying the bigger or better located house for the next 3 years.
 
First off, apologies for not replying to the posters who were kind enough to offer their time.

Unfortunately, this post coincided with the news that I would be made redundant in the new year (2026).

At the time, I was already considering a career move and I was interviewing elsewhere as I felt my role at the time was somewhat of a dead end. However, I was happy enough to stay there as it offered flexibility and good compensation in my circumstances.

The outcome of the redundancy was that the package was poor, the effective minimum above statutory which left a bit of a sour taste.

However, I was offered an extension which left me in a bit of a quandary.

1. Remain in the current role which pays more + a small stipend for staying for the full extension period

2. Take a 15-20% paycut and move to new company for a slightly more junior role but more career growth and a little bit of a shift in department.

After some consideration with my partner, we decided on the move. I’ve gone back and forth on whether it was the right decision or not as while we do feel the difference financially, it still allows us some flexibility to save, my partner to work part time and I continue to be largely remote.

Your age: 37
Your spouse's age: 37

Number and age of children: two; primary & crèche


Income and expenditure
Annual gross income from employment or profession: 75K + 15K RSUs

Annual gross income of spouse/partner: 30k (part-time as of 2025 will continue until 2027)

Monthly take-home pay: 3850 + 2150

Monthly outgoings

Car loan 250
Food + Coffee 1150
Childcare 800
Mortgage 730
Kids fund (clothes, toys, activities) 250
Hols fund (using Children’s allowance for this as of this month) 250
Car maintenance 150
Xmas 100
Savings 700
General spending (fuel, car insurance, phones, gym, personal spending) 1600 -> 1800 (this month)

Type of employment - Employee.
Employer type: private company + public servant

In general are you:
(a) Saving now but historically spending too much

Summary of Assets and Liabilities
Family home value: 380K
Mortgage on family home: 142K
Net equity: 225K

Cash: 30K

Company shares : Unvested RSU of 4 years approx 60k

Total net assets: 235K

Family home mortgage information

Interest rate: 2.25% fixed for full term

Remaining term: 22 years
Monthly repayment: 730e (includes mortgage protection)

Other borrowings – car loans/personal loans etc

10K personal loan which paid for car balloon.

No Credit Card

Pension information

Value of pension fund: 50k
Spouse: DB

Other savings and investments:

Other information which might be relevant

Life insurance: 75% salary long term illness + 4x income protection

Contributing 8% and employer 4% for pension but will look to increase

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

We have gone through various permutations of the living situation.

We have set ourselves a pretty firm limit on the monthly mortgage amount and really don’t want to exceed that.
This becomes even more challenging if we want to limit the term to anything less than 30 years.

We have considered moving, viewed a number of houses in the area which would fall within budget and concluded that we’d be leaving an A-rated home with minimal upkeep to move to an older house which may require work.

Additionally, we have engaged an architect and realise that we’d be able to get what we want from the space within budget.
The only issue remains that we’re not entirely sure if this will satisfy what we want as it’s both a change of location and additional space that we want. (Cake and eat it too).

Effectively, we’ve decided that in light of the redundancy, precarious job market, childcare costs and partners part time hours that we’re going to sit on our hands until summer 2028.

I envisage we’ll keep a small amount of money on deposit and put the rest of our savings into the new scheme when it launches.

I’d be interested in people’s thoughts more generally from whether they think my decision with the job was correct, housing situation, to how they might consider things moving forward.

Again, I appreciate the previous responses and apologies for the delayed response.
 
Roundabouts said:
I’d be interested in people’s thoughts more generally from whether they think my decision with the job was correct, housing situation, to how they might consider things moving forward.
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In my opinion, this is the personal side of personal finance. Other people's opinions are useful but you can't really say if you made the right or wrong decision. E.g. is it a good idea to take a better paying job that comes with more stress and having to work more hours or with a longer commute? There is no right or wrong answer there. From a purely financial aspect, sure more money is better. From an individual's happiness aspect either could be better. You seem like you are in a good position financially. Well done.

With regards to the housing situation, I like the idea of a relatively low maintenance place. You're current place is A rated so running costs will be low. I am living in an apartment where it gets quite cold in the winter and I hate it. I was cat sitting for some friends earlier this year in their A rated apartment and I don't think I put on a jumper once when I was in the apartment. It was pretty great. Going from that back to the cold apartment was not fun.
 
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