42 very bad with money

lucashood1977

Registered User
Messages
9
I am a 42 year old single man with 0 dependents and no mortgage despite having a very good salary I have no savings . I would like advice on how to better take care of my finances and whether I should buy a house . Im in my current role for the past 13 years but Im unsure whether to buy a house as I dont think I want to stay in Waterford. Ive pretty much resigned myself to ever wanting kids or getting married so I only have myself to look after . I am currently doing a course in the hope of getting contract roles in the field im in to make more money . Im just wandering if I should try and buy a house anyway as an investment since i am currently in full time employment.
 

lucashood1977

Registered User
Messages
9
Age:42
Spouse’s/Partner's age:no spouse

Annual gross income from employment or profession:75000
Annual gross income of spouse:n/a

Monthly take-home pay:4000

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

In general are you:
(a) spending more than you earn, or: i live pay check to pay check
(b) saving?

Rough estimate of value of home:I dont have a house
Amount outstanding on your mortgage:
What interest rate are you paying?

Other borrowings – car loans/personal loans etc: I have a cu loan for a car i bought last august . Ive 11k to go on it. pay 327 a month. 4.5 years left on the loan

Do you pay off your full credit card balance each month?i dont have a credit card
If not, what is the balance on your credit card?n/a

Savings and investments:0

Do you have a pension scheme?i do through work

Do you own any investment or other property?no

Ages of children:n/a

Life insurance:no


What specific question do you have or what issues are of concern to you?should I get on the property market as an investment even though im considering leaving my permanent job to go contracting . Are investments in s &p 500 mutal index funds something I should get on.
 
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cremeegg

Registered User
Messages
3,582
I am a 42 year old single man with 0 dependents and no mortgage despite having a very good salary I have no savings . I would like advice on how to better take care of my finances and whether I should buy a house . Im in my current role for the past 13 years but Im unsure whether to buy a house as I dont think I want to stay in Waterford. Ive pretty much resigned myself to ever wanting kids or getting married so I only have myself to look after . I am currently doing a course in the hope of getting contract roles in the field im in to make more money . Im just wandering if I should try and buy a house anyway as an investment since i am currently in full time employment.
If you have no savings you cannot buy a house just yet.

Open a saving account, put in €100 every payday. If you can live like that put in €200 every payday. Increase the monthly amount until you get to a point where you are short of money for expenses.

In a years time set yourself savings goals.
 

Introuble83

Registered User
Messages
206
Try keep a spreadsheet or write down we’re your money is going . As above mandate an amount of savings from your current account into a savings account . Try not to dip into it . Review your position every few months
 

trajan

Registered User
Messages
174
Very much agree with InTrouble83. We all have to present a manageable monthly budget before we can go borrowing any money from a bank, building society or CU - whether it's for a house or anything else. And neither can a financial adviser have anything real to work with unless you have a realistic household budget in place.

It was only I set up a spreadsheet and coldly (actually it was shameful in the extreme to see how money kept leaking out on unimportant things) examined my income and outlays, then set realistic budgets for all items, recorded exceptional income and outlay items, lodgements to bank/CU a/cs that I started to catch on to myself.

One thing that's a curse to people whose income is "challenged" by their expenses is the distribution of regular expenses (like Direct Debits or Standing Orders, rent, car tax, insurances, utility bills, etc) across the month. Missing a DD payment triggers charges and these upset the plan for the next pay-cycle. This problem is one of the first things you'll spot in a spreadsheet. To get less famine-feast cycles you have to spread the collection dates of SOs and DDs fairly through the month, not have too many on month beginnings or ends.

Utility bill expenses must be examined in detail to see how to economise. It is often possible to use night-rate electricity to do washing of clothes, personal washing and even meal cooking using a slow cooker. A shed or rear stoop can be a cheaper way of drying clothes than the tumbler.

The spreadsheet provides a target plan for savings that you can see grow over each pay period.
Okay, you'll fall flat a few times :) but the framework is always there to help you back up again.
 
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dereko1969

Registered User
Messages
2,943
first things first - what is your current rent? You're taking home 4,000 a month, your car loan is 327 a month, that leaves a lot of money that could be saved.
You need to really examine where your spending is going. Since lockdown this should be easier as most of us are using cards for every purchase. Sit down and go through your last 6 months bank statements and see where the money went.
 

lucashood1977

Registered User
Messages
9
first things first - what is your current rent? You're taking home 4,000 a month, your car loan is 327 a month, that leaves a lot of money that could be saved.
You need to really examine where your spending is going. Since lockdown this should be easier as most of us are using cards for every purchase. Sit down and go through your last 6 months bank statements and see where the money went.
My rent is 600 a month.
elec is 200.
Internet 40
Diesel 50

I should be able to save at least 2k a month. I drink too much and spend quite a bit on very expensive wine
 

trajan

Registered User
Messages
174
Electricity €200 a month or €200 bimonthly ? Explore savings here via dual day/night meters.
Internet is good compared to other cities. I'm on €50 a month myself and most everyone else in this area is on about €60.
I assume diesel bill pertains mostly to work travel so you can't do too much there unless you car share - and that has you depending on other people's idea of punctuality.
But you have to watch the drink bill - as an expense and for health reasons. You'd get more socially and financially out of some hobby like droning or photography - there's demand for realistic photos (i.e. not those stupid stock photos) and aerial photos and videos from web designers.
 
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Introuble83

Registered User
Messages
206
My rent is 600 a month.
elec is 200.
Internet 40
Diesel 50

I should be able to save at least 2k a month. I drink too much and spend quite a bit on very expensive wine
If you are saving nothing at present jumping to 2k monthly will be difficult. Start at 1250 and put 750 into a separate savings or credit union . We’re necessary dip into the 750 if you feel you have too but leave the 1250. After a few months increase the 1250 to 1500 and decrease the 750 to 500 . See how it goes . Find a wine you like in Aldi or lidl .
 

Steven Barrett

Registered User
Messages
4,077
I should be able to save at least 2k a month. I drink too much and spend quite a bit on very expensive wine
If you automate your savings, you won't have the disposable income to spend on expensive wine. When it gets to the month end, you'll have to buy €9 bottles.

...and if you think that you will just transfer the money out of your savings account into your current account to buy that fancy wine, stick it in a 7 or 30 day notice account where you can't get it quick.
 

shweeney

Registered User
Messages
354
If you automate your savings, you won't have the disposable income to spend on expensive wine. When it gets to the month end, you'll have to buy €9 bottles.
he seems to have at least 2500 a month disposable income, he can still afford to buy some decent wine and save some money at the same time.

"I drink too much and spend quite a bit on very expensive wine" - unless you're getting smashed every night on Chateauneuf-de-Pape, I still don't see where the money is going. More information is needed, are you spending 2K a month on wine?
 
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trajan

Registered User
Messages
174
"I drink too much and spend quite a bit on very expensive wine" - unless you're getting smashed every night on Chateauneuf-de-Pape, I still don't see where the money is going. More information is needed, are you spending 2K a month on wine?

I think that a less indignant tone is needed here. :)

Look, lucashood1977 needs some time to prepare and explore his expenses and budget before entering them on a spreadsheet for deeper study.
If there is anyone here on a challenged budget and who has undergone this process then they will understand that it is a painful and embarrassing experience, even if it will be transformational for them eventually.
Jokes about Châteauneuf-du-Pape won't help in this endeavour.

With the Davy situation and our financial system in general so much under strain right now, surely we can find more topics to discuss ?
 
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trajan

Registered User
Messages
174
As someone who is married with kids, I think I'd really struggle to spend all my salary without having to support all these hangers-on dependents.

Okay. But it does highlight how many people - even so-called high earners like dentists and so on - can somehow find their lifestyle stretching their seemingly adequate budgets.

So many people in the financial arena will offer you help with investing your payday surplus.
Yet hardly anyone will help with the financial potty-training needed to generate the surplus in the first instance.
 

_OkGo_

Registered User
Messages
258
So many people in the financial arena will offer you help with investing your payday surplus.
Yet hardly anyone will help with the financial potty-training needed to generate the surplus in the first instance
A very true statement. Unfortunately many financial advisors are selling products on which they make commission. They don't really care whether it is right for you or not as long as they get you signed up!

Basic budgeting is a life-skill that @lucashood1977 is currently lacking but can easily resolve. The good news is that there is still plenty of time and a healthy salary to make a real difference to their future.

OP cannot continue living on €4k per month. OP knows they should be able to save €2k/m so where is it all going?
 

Merowig

Registered User
Messages
439
You should start tracking your spending as advised here already (Mabs.ie has a spreadsheet).
First you should save for a rainy day fund - something like 2-6 months of spending. Especially if you want to move from a permanent position to contracting you might be in need of this as you might not have always a contract.

Also you mentioned that your company offers a pension fund - do they also top up your contributions? What is the percentage you put in and they put in? If you would increase your percentage would they increase as well?

For buying a house you will need to have a deposit and also showing saving behavior for at least six months.
 

Clamball

Registered User
Messages
289
I really feel for you Lucashood1977, it seems you are in a place where you want to change direction and move on with your life. But change is tough and if you make a lot of changes at one go then it can be really hard to maintain. But changing one thing at a time makes things change very slowly and progress can be slow. But I think there are several things you can consider to help you along the way.

1. Figure out what you are spending all your money on.
My rent is 600 a month.
elec is 200.
Internet 40
Diesel 50
Car 375

this is 1265 which leaves €2735 to be accounted for. So every time you spend money write it down and keep the receipt. Have a look at the mabs spreadsheet, it will make you think of areas you are spending and don’t recall.
Food?
Drink
Heating
Car insurance, tax, service
Clothes
Books, movies
Takeaways
Medical costs, doctor, dentist, chemist.

2. Once you have figured out what you spend your money on then try and decide how much each month you actually want to spend and give yourself a budget.

So say you do spend €40 a day on wine which is €1240 per month. Then decide if that is what you want to spend or can you get away with spending less. Maybe you can decide on €40 every second day, then you can budget to save €620 per month.

3 When you get paid put that €620 into a different account, loads of ideas above on how to do that. And if the month progresses and you find you need to dip into the €620 don’t beat yourself up, just do your best. Change is hard. So maybe at the end of the month all you have left is €200 then transfer that to a long term saving that is harder to access. At the start of month 2 put the €200 straight into the long term saving and the €420 into the different account and try again.

3. Now you are in month 2, you have definitely been able to make €200 a month saving and you want to make more. There are several things you can do.

Examine what causes you to spend, what triggers the action. I am going to focus on the wine again, and I am sorry it is alcohol as maybe you have addiction issues which are a much bigger issue but I am for the sake of this topic going to assume you are able to decide whether you want to drink or not. So what makes you decide to buy that expensive bottle of wine. Do you call to the off licence every night on the way home from work? Do you spend hours researching wine and vineyards and buying them online. Are you a member of a wine club? Once you figure out what triggers the purchase then maybe you can do sometime to adjust the trigger. Maybe if it is a habit to drop into the off licence, change your route home so you don’t pass it. Decide to go in once every second day rather than every day? Make a decision to buy a €20 bottle rather than a €40 bottle for the next 10 bottles you buy. Any little action that can help you make a mindful spending decision rather than a habitual spending decision.

So each time you are paying ask yourself, if you are happy with your purchase, is it in your budget, or would you like to make one change to reduce the spend. And maybe half the time you are successful and half the time you default to your typical pattern. But at the end of the month the savings were €400. Put that into your long term savings and at the start of month 3 put €600 into long term savings.

4. Now you are at the start of month 3 with €1400 in long term savings. You are making great progress and you should be proud of yourself. But you need to maintain your saving goals by visualising what you are saving for. You spoke about moving, setting you as a sole trader, probably buying a house. So start researching and planning. See yourself living in your new location, imagine your lifestyle, work on your new work persona, sales pitch, business card etc. Then every month you save, expand your goals, “this month I can use my savings to buy a chair in my new kitchen”. Imagine it, look up different options, spend the money mentally. Give yourself a mental pat on the back for making the savings. Make it real by talking to friends about the type of kitchen chair you are going to buy in your new home.

5. As the months go on, make small changes one by one. Celebrate knowing where you are spending and tracking all your money. Know exactly what you want to spend each day, week, month. Be proud every time you decide to save and not spend. Be really proud of seeing your savings grow. Distract yourself from being in situations that trigger spending, leave the house, go for a walk, delay the spend, decide to do it the next day if you really want it, anything to wait. Maybe the trigger event or time will pass and in the morning you can decide again, spend or save. Set goals for your savings and visualise it happening, say when I get to €10 K saved I am going to change jobs, when I get to €20K I am going to start planning to move, when I get to €50K I am going to buy a house. Whatever goals work for you.

Do you want to take the first step and let us know what your spending is for the next week, month. If you write it out you make it real and people have lots of ideas to help even in small ways. Changing your electricity provider might save you €200 a year, and you might spend a night figuring that out as a distraction to spending €200, win win all around.
 

tecate

Registered User
Messages
1,482
There are apps which track all of your spending - every last cent. You have to be disciplined about inputting that info -but it's powerful. That to me is your starting point. You earn decent money. There's no way that you can't save on that salary.
 
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