Moneymakeover Couple in 30s - trying to make the right calls

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patontheback

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Personal details
Your age: 34
Your spouse's age: 36
Number and age of children: 0 - souse currently 2 months pregnant on our first.

Income and expenditure
Annual gross income from employment or profession: 100k + bonus (15%)

Annual gross income of spouse/partner: 80k + bonus (10%)

Monthly take-home pay: ~€9k combined

Bonus is performance related.

I also receive RSUs amounting to about ~15-20k per year

Type of employment - e.g. Employee or self-employed: Both PAYE workers

Employer type: e.g. public servant, private company: Both work in Tech

In general are you:

(a) spending more than you earn, or

(b) saving?

Saving €2.5-3k per month after tax (outside of pensions)

Summary of Assets and Liabilities

Assets

Family home value: €530k

Car: €40k

Credit Union savings - €10k

Bunq (earning 2.26%) - €40k (€20k emergency + €20k pcp balloon payment, if needed)

Investments - €50k (standard life global index fund 80)

Irish Life pensions - me - €142k

Irish Life pensions - spouse - €80k

Liabilities

Mortgage on family home: €180k. A rated home in Dublin. €840 p/m

PCP car loan at 1%. €390 p/m, expires June 2028.

Family home mortgage information

Lender: BOI
Interest rate: 1.9%
Type of interest rate: fixed
If fixed, what is the term remaining of the fixed rate? Fixed until July 2026
Remaining term: 22 years
Monthly repayment: ~€830

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month? Yes

If not, what is the balance on your credit card? N/A

New EV car on PCP (1%). Single car household.
€390 per month (balloon payment already saved in Bunq - 21.5k)

Pension information

Value of pension fund: €222k combined, we both make maximum contributions.


Other information which might be relevant

My spouse and I both work in tech which brings its own uncertainty, but we try to take things one day at a time and make good financial decisions now so we’re well positioned if circumstances change. While the roles are demanding, we’re grateful to get good salaries and excellent benefits including annual bonuses, RSUs, health insurance, life insurance (6x salary), income protection covering (2/3 earnings), 4 months of paternity leave etc.

An inheritance we received some time ago helped us pay down a significant portion of our mortgage to minimise the uncertainty of work

So far, we’ve used RSUs primarily to top up our pensions through AVCs (pension maxed over last few years.

Inheritance and RSUs have also enabled us to do all the necessary home improvements we’ve wanted (attic/garden etc.)

To now - We’ve been enjoying the double income no kids while it lasts so have a few holidays and treats, but try to still save a good portion of our salary.

The new car was more a want that makes us both happy.. the final ‘treat’ if you will, after doing all the home upgrades and readying ourselves for the next stage of our lives (parenthood). While it’s had debt to some (depreciation + pcp), we’re happy. Tried to minimise the blow by low interest rate and balloon payment waiting to have options in 3 years after contract is up.

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

I feel we’re at a point now where we’ve achieved many of the financial goals we set for ourselves, which is a very fortunate position to be in. It’s been the main driver for us over the past few years — motivating the hard work, the grinding, and the effort to consistently make the right financial decisions.

As we move into this next chapter, I can see that things will start to shift. I’m trying to acknowledge and appreciate how far we’ve come, rather than immediately looking for the next big thing to spend money on or chasing new financial goals just for the sake of it.

I also notice that money can sometimes be a source of stress for me — feeling like I should be doing X or Y. For example, now that we have the EV, I’ve been wondering if we should get solar panels, but I’m not convinced the cost-benefit makes sense for us at this stage. It might just be the itch for another “project” more than a real need.

Our financial goals
  1. Create flexibility so that in the future we could take roles with lower pay but better work-life balance, especially with kids in the picture.

  2. Achieve financial independence by paying off the mortgage completely and ensuring our pensions are well-funded so we have the option to retire in our late 50s or early 60s.
Our current strategy
  • Continue maxing out pension contributions each year.

  • Keep paying down the mortgage while rates are still low.

  • With savings of about €2.5k per month, the plan for the next year is to:
    • Put €15-20k toward the mortgage before our 1.9% rate expires, so we can keep our monthly payments (~€830) steady even when rates rise.
    • Set aside €10-15k to cover the unpaid portion of my wife’s maternity leave.
I do sometimes think about whether we’re making the best decisions, or if there’s something smarter I should be doing. But realistically, most of the big home improvements are done, so it’s probably just about steadily plugging away at the “boring” stuff: paying down the mortgage, topping up pensions, and keeping a healthy buffer.

I’d really appreciate any advice, or hearing about your own experiences at this kind of stage. Thanks a lot!
 
You are both very well positioned at this stage of your life financially. With your mortgage very low at €180K and your repayments only 10% of your take home pay.

Childcare costs will be significant but your lifestyle (holidays & treats) will evolve with children so you will manage.

You are both in a very good position to have one spouse give up work to become a full time parent. It is probably not a decision you will make until the children are here but you are well positioned to do that.

Otherwise prioritise paying down the mortgage, building your pensions and growing your overall wealth, which you are well started on with the €50K in global equities. Your short and medium term goals already seem to be well taken care of. In future I would encourage you to buy a car for cash rather than a PCP.
 
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if you are going to be staying in the house to get the benefit solar should make sense (over an 8-10 year payback period). Forget about having an EV as a reason, you wont be charging the car with solar, i assume / hope that you are on a good d/n plan (there are 26/13c plans out there) and only charging the car with cheap electricity, with solar you should be able to sell to the grid for around 20c so putting in the car doesnt make sense.

Assume you have a HP aswell? in winter look to run that more at night (and heat DHW) when the rate is low to minimise day time running, in that scenario a battery array would be useful as well to charge it over night and power the HP during the day.

you are in a good financial position and have your heads screwed on so well done, having kids is the next frontier and tbh its a bigger change than you can ever imagine, if you decide / can have 2 or 3 you may have to sacrifice part or all of one salary for a period to make life manageable.
 
patontheback said:
I also receive RSUs amounting to about ~15-20k per year
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In general it usually makes sense to liquidate such incentive stock as soon as possible and use or invest the money elsewhere rather than holding onto them longer term. Otherwise you're putting at least two eggs (your remuneration and some of your investments) in one basket (your employer) which is a concentration of risk.

Oh ... I guess that you're already doing that?
patontheback said:
So far, we’ve used RSUs primarily to top up our pensions through AVCs (pension maxed over last few years.

Inheritance and RSUs have also enabled us to do all the necessary home improvements we’ve wanted (attic/garden etc.)
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patontheback said:
Value of pension fund: €222k combined, we both make maximum contributions.
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Make sure that the charges are competitive and that your money is invested appropriately - at your age almost certainly a high or all equity asset allocation.
 
You are doing everything right and just need to carry on as is.

patontheback said:
Family home value: €530k
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patontheback said:
Mortgage on family home: €180k. A rated home in Dublin. €840 p/m
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This is the one thing that stands out for me. An A-rated home for €530k in Dublin sounds rare given the current property market. Is that what you bought it for or are you undervaluing it? Or is it a small 2/3 bed?

With a child on the way (any plans for a second?), it's important to decide if this is where you are happy to live long term. You are much less likely to move once they start school and have friends and those 4-5 years will roll around quickly.

This is less "advice" and more "anecdotal" for you but we are slightly ahead of your situation, late 30's ,2 kids, high income.

We prioritized maternity leave, my spouse took the maximum unpaid leave for both kids.

Maxing pensions for the last ~5 years but any excess cash has gone to our mortgage. With salary increases, bonuses and a redundancy, we've effectively cleared the mortgage which gives us lots of choices. One of which is my spouse is now considering a part time role as the eldest starts school

What we have found the hardest to deal with is the days where one child is ill and is sent home from creche for 48 hours. It's been a challenge to work around this and even down to where we have our offices. e.g. can't be beside the nursery on calls with a baby sleeping in the next room. Or just trying to work early/late to work around. On a few occasions, we've just had to take PTO to deal with it.

The reason I mention this goes back to type of property you have. If you are in a 3 bed and plan on having 2 kids, WFH will be challenging if you don't have dedicated office space at home.
 
patontheback said:
it’s probably just about steadily plugging away at the “boring” stuff: paying down the mortgage, topping up pensions, and keeping a healthy buffer.
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It's managing the boring stuff that allows you to do lots of exciting stuff in the future.

Having a kid is going to change your life more than you think, so don't think you will continue to save at the same rate that you currently are. Kids are bloody expensive!!! And not just at the beginning when you have to pay for childcare, wait until they are teenagers!!! The cost of everything they need is expensive!!

The key thing is to have good saving habits. Contribute to your pension and automate your savings so you are living below your means. Use the markets to grow your wealth. Form good habits and give it time and everything will be fine.
 
ClubMan said:
Make sure that the charges are competitive and that your money is invested appropriately - at your age almost certainly a high or all equity asset allocation.
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not much you can do about charges in an employer scheme but you can ensure the correct allocations at least.
 
_OkGo_ said:
What we have found the hardest to deal with is the days where one child is ill and is sent home from creche for 48 hours. It's been a challenge to work around this and even down to where we have our offices. e.g. can't be beside the nursery on calls with a baby sleeping in the next room. Or just trying to work early/late to work around. On a few occasions, we've just had to take PTO to deal with it.
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yes life gets a lot more complicated ! my wife had the opportunity to take redundancy and thus far hasnt gone back to work, if you can afford it life is a lot easier when one parent is stay at home.
 
You are in a similar spot to me a few years ago i.e. good salaries, controlled mortgage, decent pension starting point and about to embark on the parenting journey. However I still felt that money optimisation anxiety you outline. The best thing I ever did was recognise the hard yards done to date and adjust my monthly budget to make it less frugal. It took away the end of month - self inflicted - stress of not hitting a budget by say 100 or 200e - when in fact it mattered little. It was the best thing I ever did and the payback in life satisfaction was 3 fold.
 
One thing I would say from the outset is, once the little one arrives and the children's allowance starts coming in, ring fence that straight away into a Children' education fund (I put ours in Zurich) paid into the fund about the 4-7th of the month (usually the s/w payment comes into the bank a/c about the 3rd or 4th - sometimes sooner where the 1st or 2nd falls on a weekend).

You are in the comfortable financial position that you won't even miss not having possession of that that extra marginal (state guaranteed) income, and by the time the kid(s) reach 18 you will hopefully have sufficient funds in the a/c to cover their 3rd level education, or set them up on whatever other career path they choose to follow.
 
Mayo1969 said:
ring fence that straight away
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A ring fencing/silo approach to savings/investments isn't a great idea. Better to look at and treat the household finances holistically. E.g. in the general (not this specific) case, if using the CB to clear an onerous mortgage quicker results in more generous cashflow/liquidity when the children are in education then that could be a better approach than a CB investment silo.
 
ClubMan said:
A ring fencing/silo approach to savings/investments isn't a great idea. Better to look at and treat the household finances holistically. E.g. in the general (not this specific) case, if using the CB to clear an onerous mortgage quicker results in more generous cashflow/liquidity when the children are in education then that could be a better approach than a CB investment silo.
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But in the OP's case it would seem they are in the comfortable financial position to be able to invest the CB from the outset without really missing it. Obviously if their financial situation changes down the road they have the option to reduce/discontinue the contribution / draw on those funds if required, but at least they have started to build up a (specifically child focused) fund from the extra (state) income earned from the arrival of their child.

I suppose it does raise the ethical consideration of whether children's allowance should be used to gamble on your stock portfolio, or placed on the nose of the 20:1 at Newmarket, but that's a separate debate for another day!
 
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Mayo1969 said:
(usually the s/w payment comes into the bank a/c about the 3rd or 4th - sometimes sooner where the 1st or 2nd falls on a weekend).
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Child benefit paid on first Tuesday of each month. Can be any date between 1st and 7th, with an even spread over these dates.
 
Similar spot to ourselves.

Forget solar panels. The fundamental question is childminding cost and whether one of you wants to pause working when you have your baby. The answer you feel today may be different to the one the day you feel after baby is born. It's not all about money in the end and my other half gave up a 100k plus career to raise our kids, and has not regretted it. No judgement here - just do not feel because salary is high you must continue to work. It isn't 1+1 = 2 problem.

After that you are doing everything right. Maximise pension. Put savings into stock market and ignore the dips. Redirect savings to mortgage if rate climbs - hopefully you can refix next year at a similar rate.

I have a lot of experience with solar. You can get your money back in 5 years. However, many hours of research and quotes are needed - I expect the majority of large minority are being fleeced and will struggle to see a return on investment within a decade. It is potentially the next PCP scam, and I feel for the older people being duped into big investment by some of the biggest players in Ireland.
 
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