Concerned about change in salary - advice please

J

JAW

Guest
Age: 32
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: €50,278.92 (€2,336.42 pm after deductions)
Annual gross income of spouse:Currently €48k approx, proposed to drop to a basic of €22k pa + commission

Type of employment: e.g. Civil Servant, self-employed
Both Private sector, I'm permanent but my spouse is on a 3 year contract up for reknewal hence the proposed changes in circumstances.

In general are you:
(a) spending more than you earn, or
(b) saving?
Were saving but with new proposal will be spending more than we earn.

Mortgage €1,556.82 pm ECB + 1.1, 23yrs remaining on term, have TRS for another 2 (included in this amount)

Childcare €1,602 per month

Food + bills
€400 pa - Car insurance (10 year old 1l, Main family car is my company car which is paid for in BIK, 2nd car needed for creche runs etc.)
€172 pa - Car tax
€330 pa - Scooter insurance (spouse uses to commute)
€ 45 pa - Scooter Tax
€410 pa - house insurance
€150 pa - bins
€160 pa - TV license
€400 pa - Allocated for car/bike service
€500 pa - home heating oil
€2,000 pa - club membership
€86.39 pm - Mortgage protection
€97.34 pm - Health insurance (spouse + 2 children, mine is paid by work)
€60 pm - Phone & broadband (€25 re imbursed in expenses)
€55 pm - Electricity
€45 pm - Spouses mobile
€100 - 150 pw - groceries


Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month? YES
If not, what is the balance on your credit card?


Savings and investments:
€14,000 - Rabo
€2,000 - Prize bonds - you never know!
€2,500 - Shares

Do you have a pension scheme?
Both through work, spouse has to contribute 5% which would come off salary mentioned above.

Do you own any investment or other property?
No

Ages of children:
3 and almost 1

Life insurance:
Through work


What specific question do you have or what issues are of concern to you?
My spouse is facing a significant cut in basic salary which would see us falling short each month. We have been good at saving and aside from our mortgage are debt free. We have always kept 6mths salary as a cushion in case we lost our jobs. This new salary proposal would see us running month to month at a loss and having to supplement with our savings until commission comes in - we are looking for advice from anyone else in this situation as it is totally foreign to us.
 
How much is your spouse's commission likely to be?

The childcare alone seems to be €19224/year, and your spouse's new wages would be €22k gross. It could (depending on commission) be worthwhile for spouse to give up work and look after children instead. This would also save other work-related costs.
You could have their tax credits, saving on PAYE.
 
First of all there is no need to panic too much as you have been sensible with money, have savings and no personal debt.

I would agree with previous poster in that it may be worth your spouse's while giving up work and minding children. Scooter could then be sold/put away saving tax and insurance on that also. You should then be able to manage on your income giving that you will receive your spouse's tax credits also.
 
Mortgage €360k, thought we would have roughly broken even if we'd sold but houses on estate have gone from €300k +, hard to judge exact value as all houses different. Not moving anyhow so not dwelling too much on that ;-)

Giving up work has been floated, is there anyway online that I can calculate the revised tax free allowance with only one of us working?
 
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