Budgeting + what/how to prioritise your cash?

B

Bluebean

Registered User
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hi all,

Sorry if the title is not clear, I wasn't sure what to put as a title. At the moment, I am in the process of trying to do a bit of a financial overhaul. I think I am doing ok mostly, I am saving money and not in any debt. I do not own my own house, I am renting accommodation. I have approx 6k in the bank from savings, adding 500 euro to this each month. I do not have an SSIA. I am a bit worried as I am 27 and I do not have any pension. Also, I am getting a bit fed up of paying bank + credit card charges (with AIB with years), so am hoping to change banks in the very near future.

What I would like to know is:

1. Should I cut back on my monthly savings to start a pension scheme? I have to admit to knowing zero about pensions. If I do start a pension, approx how much should I aim to put in each month to start off with?

2. I am hoping to transfer to Ulster Bank, both my current account and my credit card account as it seems to be the most convenient for me. Are there any pitfalls I should be aware of with an Ulster Bank current account?

Lastly, is there anything else I should prioritise? On a gross salary of 28k I have given up hope of buying a property on my own. My partner and I are discussing buying a home, but he is actually eligible for a mortgage of approx 300k on his salary alone, so we're not sure if he should just buy and I pay rent or what to do.

If anyone could give any advice on what my next steps should be, or a 5 year plan sample I would really appreciate it.

Thanks,

BB
 
Bluebean said:
I do not own my own house, I am renting accommodation. I have approx 6k in the bank from savings, adding 500 euro to this each month. I do not have an SSIA. I am a bit worried as I am 27 and I do not have any pension.
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If you plan to buy a house eventually then you should prioritise saving towards that over saving for retirement in my opinion.
Also, I am getting a bit fed up of paying bank + credit card charges (with AIB with years), so am hoping to change banks in the very near future.
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No need to pay bank charges in this day and age. Check out the IFSRA personal current account [broken link removed]. What credit card charges are you talking about? Are you using the credit card to borrow and incurring interest charges? If so you should sort this out, replace any outstanding credit card balance with a cheaper loan or a 0% credit card balance transfer offer, pay the debts off as soon as you can and rectify any spending habits that cause you to get into debt. You should really not be borrowing if you have savings that you can use instead.
1. Should I cut back on my monthly savings to start a pension scheme? I have to admit to knowing zero about pensions. If I do start a pension, approx how much should I aim to put in each month to start off with?
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What monthly savings? What is the breakdown of your net income and outgoings?
2. I am hoping to transfer to Ulster Bank, both my current account and my credit card account as it seems to be the most convenient for me. Are there any pitfalls I should be aware of with an Ulster Bank current account?
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Check out the cost survey mentioned above.
Lastly, is there anything else I should prioritise? On a gross salary of 28k I have given up hope of buying a property on my own. My partner and I are discussing buying a home, but he is actually eligible for a mortgage of approx 300k on his salary alone, so we're not sure if he should just buy and I pay rent or what to do.
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This is a separate arguably non financial issue but if you are planning to stay together long term (and maybe marry) then you should really be looking at things on more of a partnership basis rather than as two separate individuals.
If anyone could give any advice on what my next steps should be, or a 5 year plan sample I would really appreciate it.
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There are some useful budgeting resources in the key posts linked at the top of this forum. You need to clarify what your life plans/goals are and then figure our the short, medium and long term financial strategies that you need to put in place to fund/support the attainment of these goals/plans.
 
Thanks Clubman.

My income is 2000 per month.
My regular outgoings are 1585, covering rent, savings, household bills, mobile phone, petrol, all car costs, food, holidays, clothes, make up, doctors visits, dentist, birthday presents. This leaves me with 95 euro a week for entertainment and any unexpected costs.

I owe approx 230 euro on my credit card, which I am hoping to pay off in May/June and then pay off any balance owed in full at the end of each month.

It is likely that my partner and I will buy a house together, we are just weighing up all our options at the moment.

I will go back and re-read the links to best buys and the cost surveys.

Thanks again,

BB
 
Bluebean said:
1. Should I cut back on my monthly savings to start a pension scheme? I have to admit to knowing zero about pensions. If I do start a pension, approx how much should I aim to put in each month to start off with?
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I'm guessing your employer doesn't offer a pension scheme where they match your contributions?
If they do, I'd certainly suggest you'd aim to recieve the max benefit of this (employers that do offer this usually match around 5 or 6% of contributions to pensions) as a priority. You recieve the tax benefit of the contributions (covered in many threads on the site) and the added contribution of your employers payments.

If not, it still could still be worth considering a pension, but far less clear cut. Its up to you to weigh up your needs for the future (early retirement, plans for retirement etc.), the possible tax benefits of the pension payments, the benefits of starting a scheme early you MAY make larger gains on the payments (more time for more risky funds to increase in value), etc..
and your needs for the present.... money towards the house (no point in having a large pension built up at a young age and no access to money when you need it now), savings money, rainy day money, holiday money etc etc.

Doing a search on pensions and savings may provide a bit more info on all the questions you've raised.

(Even if you are considering changing banks, while your still with AIB, could be worth making a request to have your fees removed [again, search the threads and you'll find previous mention of this], they have been known to do this for many customers in the past - given the new removal of AC fees with certain criteria [debit card, internet banking etc] they may be more forgiving on who they would remove fees for)
 
Bluebean said:
.. am hoping to transfer to Ulster Bank .. seems to be the most convenient for me..
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IMHO - not the best reason for choosing a bank. I haven't set foot in my branch in about 15 years - it's 50 miles away.
 
My employer stopped contributing to pensions for new employees around 4 years ago, and now the only option is an employee contribution only PRSA. However, since I am with the company 6 years, I may be able to get the old pension deal offered to me - which I believe was 5% employee contribution and 2.5% employer contribution.

I am also planning on moving my savings (currently with credit union, earning 2% interest) to Bank of Scotland. From reading other posts I think this is a wise move?

Many thanks for all replies so far, plenty to think on.
 
Hi Bluebean

for a start I would take some of that € 500 and pay straight off the credit card, you could be paying u to 18% interest on this alone

good luck
 
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