Financial advice for young family

Sumarisol

Registered User
Messages
21
Age: 37
Spouse’s/Partner's age: 49

Annual gross income from employment or profession: approx 110,000
Annual gross income of spouse: 28,000

Monthly take-home pay approx 6,000 (pay depends on number of hours worked in the month zone months shorter than others so from 4000 up to about 5600 is my take home pay plus 1800 from my husband)
Child benefit: €280
Partner Pay: €1850 per month
My pay: I'm on a daily rate contract for 12 months and my take home pay can vary from €3000 up to a max of €5900. I have my own company and business account and take the max pay home every month. I know people that take the min amount and then take the profits once a year so they only have to pay 12% corporation tax but we are just not in a position to do that.

Type of employment: e.g. Civil Servant, self-employed
I'm self employed and husband permanent, full time.

In general are you:
(a) spending more than you earn, or
(b) saving?
A) spending more

Rough estimate of value of home €450k
Amount outstanding on your mortgage: €198k, 30 year term, variable rate, 2.9%

Other borrowings – car loans/personal loans etc
PTSB personal loan €15k, 2 years left, 7.6%
Credit Union €8k

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 2083, limit is €2000, interest rate is 19%

Savings and investments: €1800 in credit union which is tied to the loan

Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: 7 and 4.
Childcare costs: €1240 per month
loan repayments: €850 per month
Mortgage: €880 per month
Family member loan €1150
Groceries: €600 per month
Gym €25 for me, swimming pool.
Kids activities €150 per month
Mobile phone bill: €70 pm
Sky: €110 pm
Virgin broadband: €70 pm
Cleaner: €80 pm
City bin: €15
Netflix: €15
Amazon Prime: €9.99
Life insurance: €110
Health Insurance: €80
Car insurance: €60 for my car (2012 estate), €70 husband 2006 fiesta
Alcohol/cigarettes: €0 for me as I dont do either and possibly €20 per month for my husband for a few cans.

I've recently started to use a budgeting app which pulls all transactions directly from your current account. Based on the analysis I've seen so far we waste money on crap like lunches, take outs, eating out, stupid stuff. In the region of €800 in Nov.

The above are fixed monthly expenses. What I'm doing at the moment is looking at changing gas and electricity providers. Have been with the same one for 2 years, new provider can save us 470 per year and it's fixed rate. We will also change internet providers which save us €50 per month. Getting rid of Sky which will save us €110 per month. The savings we make here we will use to pay off the credit card.

There is family loan of €1150 which doesn't need to be paid back immediately.

I've been quite bad with money over the years and I would really like for us to be in a better position and not struggle every month. Husband has been studying the last few years and he only started working the last 3 months. I was self employed for 5 years and then went perm for 2 years in 2017 and then moved back to self employed since October. The childcare cost is also relatively new.

I'm here to find out the best way to budget and manage our money and how to clear the debts as soon as possible while also taking into account the variance in my monthly take home pay.

And yes we have been very silly people over the years and wish I had found this forum sooner!

Thanks a mil.
 
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David1234

Frequent Poster
Messages
216
There is an odd trend developing in the Makeover section where people on very good combined incomes have significant outgoings and finding it difficult.

How much is left on the family member loan?

how many times are you eating out a month? €1,500 a month on food is very very high. Your groceries should be around €600 max.

I would stay away from trying to consolidate loans. You have enough left over to live a comfortable life each month and after 2 years you will have €850 a month extra. If you had extra money what would it be used for?
 

Saavy99

Frequent Poster
Messages
230
170 a month on sky and broadband, 1500 on food, 70 on phones are shocking figures. Surely the food figure is an error :oops:
you are on huge salary but money looks.like it's just just being frittered away.
 

Sumarisol

Registered User
Messages
21
There is an odd trend developing in the Makeover section where people on very good combined incomes have significant outgoings and finding it difficult.

How much is left on the family member loan?

how many times are you eating out a month? €1,500 a month on food is very very high. Your groceries should be around €600 max.

I would stay away from trying to consolidate loans. You have enough left over to live a comfortable life each month and after 2 years you will have €850 a month extra. If you had extra money what would it be used for?
So we just have 1150 left on the family loan, we try and pay as much off as we can.
Only this week I started using an app to really look at the spending and it has given me a figure of €1500. We shop at lidl every week and probably eat out 2 to 3 times a month and take out once a week. That figure also includes lunch at work a couple of times a week and coffees. I agree though it's way to high and will start setting some tight budgets.
 

Sumarisol

Registered User
Messages
21
170 a month on sky and broadband, 1500 on food, 70 on phones are shocking figures. Surely the food figure is an error :oops:
you are on huge salary but money looks.like it's just just being frittered away.
I know!! I was shocked myself but those figures are from an app I started using that analyses your spending based on actual transactions from your bank so it tags things automatically, some may not be entirely correct. Have found a broadband provider for €25 a month and just going to use Netflix and Amazon for TV so at least that's some savings. Phone contract up in Jan so will shop around before then. Will continue to shop at Lidl but will top up our revolut cards with €20 week and that can be used for coffee and lunches. No take away and we will reduce the number of times we eat out.
 

Saavy99

Frequent Poster
Messages
230
Gomo, prepaid sim, just 10 euro each a month, www.gomo.ie
saving you an instant €50 a month on the phones.
Keep a spending diary for a few weeks so you can see exactly where your money is going. Trawl through other posts here on money makeover forums and see how much you can save going fwd.
 

noproblem

Frequent Poster
Messages
1,987
Good advice given here and I see you writing for help at 3.30 am which might suggest it may be affecting your headspace and family life as well. You really need to get on top of this. I just saw health insurance at €80, if that's per month for the family i'd love to know what's covered because it's very cheap. People with aprox half your take home money can manage and I'm not scolding you.
 
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Sumarisol

Registered User
Messages
21
@David1234 sorry meant to include this on my reply. The problem is we don't have money at the end of the month, we always seem to struggle. Taking this month as an example we have 2400 left in salary and 1800 is due out between now and 31st Dec for bills, childcare and mortgage leaving us with €600 that has to cover two weekly food shops, fuel plus some xmas shopping. I know this is all entirely our own faults but I really need to figure out the best way to manage and budget our money. Jan pay for me will be around 3100 due to some sick leave in dec and xmas holidays so really want to have a proper budget in place by then so we don't end up borrowing more money from family.
 

Sumarisol

Registered User
Messages
21
Gomo, prepaid sim, just 10 euro each a month, www.gomo.ie
saving you an instant €50 a month on the phones.
Keep a spending diary for a few weeks so you can see exactly where your money is going. Trawl through other posts here on money makeover forums and see how much you can save going fwd.
Brilliant that's great, will definitely switch over. Thank you!
 

Sumarisol

Registered User
Messages
21
Good advice given here and I see you writing for help at which might suggest it may be affecting your headspace and family life as well. You really need to get on top of this. I just saw health insurance at €80, if that's per month for the family i'd love to know what's covered because it's very cheap. People with aprox half your take home money can manage and I'm not scolding you.
Definitely affecting my head space! I just can't believe how careless we've been and really very clueless.
 

cremeegg

Frequent Poster
Messages
3,112
A few thoughts.

Fault has nothing to do with anything here. You are where you are because of the choices you have made. You have decided you want to be in a different place money wise and are looking into how to achieve that.

You are high earning, you must be good at what you do.

Your mortgage, the one thing that can be difficult to fix if it's out of control, is not excessive.

People on €138k a year don't usually worry about the cost of their TV. Thats not an argument for overpaying, just an observation. You are earning more than enough to be comfortable.

If you are a detail person who will analyse their spending closely, and not just for a few weeks like a new years resolution soon to be forgotten, then go down that route with the app etc. You will soon get control of your spending.

If you are not a detail person or not likely to keep a focus on spending I suggest opening a spending bank account. Do a budget once. Your income goes into your main account, you keep enough in that account to pay the mortgage, child care and other fixed regular bills that you have no choice over on a monthly basis, and maybe eventually some savings. The remainder goes into the spending account. You can spend that as you like. If there is nothing in that account you can't spend it. Review every now and then. Sky is paid from the main account as on a week to week basis its not discretionary spending. Unless you decide to cut it out

You will probably not eat out in Jan or Feb or drink coffee, but unlike people who cannot save for a mortgage you can get to a place where you have money left over each month, your goal is achievable.

And don't even think about borrowing money for your day to day spending. That just allows you to not address your spending issues.
 

Sumarisol

Registered User
Messages
21
A few thoughts.

Fault has nothing to do with anything here. You are where you are because of the choices you have made. You have decided you want to be in a different place money wise and are looking into how to achieve that.

You are high earning, you must be good at what you do.

Your mortgage, the one thing that can be difficult to fix if it's out of control, is not excessive.

People on €138k a year don't usually worry about the cost of their TV. Thats not an argument for overpaying, just an observation. You are earning more than enough to be comfortable.

If you are a detail person who will analyse their spending closely, and not just for a few weeks like a new years resolution soon to be forgotten, then go down that route with the app etc. You will soon get control of your spending.

If you are not a detail person or not likely to keep a focus on spending I suggest opening a spending bank account. Do a budget once. Your income goes into your main account, you keep enough in that account to pay the mortgage, child care and other fixed regular bills that you have no choice over on a monthly basis, and maybe eventually some savings. The remainder goes into the spending account. You can spend that as you like. If there is nothing in that account you can't spend it. Review every now and then. Sky is paid from the main account as on a week to week basis its not discretionary spending. Unless you decide to cut it out

You will probably not eat out in Jan or Feb or drink coffee, but unlike people who cannot save for a mortgage you can get to a place where you have money left over each month, your goal is achievable.

And don't even think about borrowing money for your day to day spending. That just allows you to not address your spending issues.
I think the problem is that for 5 years while I contracted we lived a nice life, we were renting and had low child care costs. The problem started really once I moved to a permanent job. We should have modified our lifestyle but we didn't which is why we have the 8k loan from CU. We also bought a house about 6 months before I switched so there has been more cost. Although the salary will be approx 138k per year we are still trying to catch up and get on top of things so I think we need to cut back on things like tv until we are in a better position.
Our wages and bills come out of the one account but I'm wondering should we use revolut for things like groceries and fuel? Even though we get paid monthly should we budget weekly? Try to spread out the big payments over the month?
The app is so easy to use so think I will stick with it for a while.
 

goingforgold

Frequent Poster
Messages
261
I'm actually going to take a very different view here. Your pay is not 138k gross, (as mentioned above) it's 128k and that's max scenario...your net pay can be 5800 euro some months. Now from that if you deduct mortgage 870, loan 850, chilcare 1400 your left with approx 2700 per month (exc.family loan) to cover all bills (heating, electricity, car tax/insurance, diesel, house insurance etc etc), child related costs, food, clothes etc etc...

I'll be honest, I have a wife and two kids and we live modestly, no sky, no fancy cars, heating bills very reduced as access to turf/wood, no mortgage, no childcare costs...we spend on average 3.5k per month and would find it very difficult to live below that. That includes Christmas, modest holidays, running two modest cars, kids expenses which are endless, birthday parties,house maintenance, weddings etc etc.

So, while you definitely need to budget as there are areas that could and should be addressed, like the food situation...there still needs to be some realism as in my opinion you will not be saving loads no matter what you do...
 

Boyd

Frequent Poster
Messages
1,517
Can you clean up the figures for outgoings? Some are listed per week (child care), some are listed per month (mortgage) and some seem to be in totality (family loan). Similarly, E25 Gym - is this per month per person or what? It's hard to know what are fixed monthly or weekly costs, suggest you edit original post to make it easy to understand. List each expense clearly by amount and by timeframe. How much are you paying per month to your family loan? Is that included in the monthly loan repayment figure?

1) Stop Borrowing
So we don't end up borrowing more money from family.
Yes you need to stop borrowing money, from anyone IMO (family, bank, credit union, credit card. I assume you have cut up your credit card at this point?

2) Understand Interest and Cost of Credit
what is the balance on your credit card? 2083
Also important missing information, what is the interest rate on your credit card balance? In other words, how much interest are you paying on this loan per month? How much are you paying off the outstanding balance per month? (This is in effect another loan).
Amount outstanding on your mortgage: €198k
What interest rate are you paying?
Not 100% sure but think it is 2.5%
Please find out for sure and find out if it's fixed, variable or what. Also, what are the interest rates on two personal loans? Assuming mortgage rate is actually 2.5 percent, forget overpayment. You need to clear high interest debts first.

3) Separate Needs from Wants/Nice to have spending
I echo other posters, your grocery+broadband+sky+phone bills seem crazy high.
probably eat out 2 to 3 times a month and take out once a week.That figure also includes lunch at work a couple of times a week and coffees
. You need to separate groceries (required) from eating out, eating in takeaways, lunches out, coffees out. Depending on that split, your *actual* groceries might only be a reasonable E800 per month, which sounds do-able me, saving you a whopping E700 per month (of non grocery spending).
For example, "lunch a couple of times a week" could be costing you 2 people * 2 times per week * 10 euro per person = 40 per week * 4 = 160 month (could be double that or half that depending on what lunch is for you).
Takeaways once a week for 4 must be E40 quid per week so another E160 per month.
Finally, eating out 2/3 times a month for 4 people is surely E200-300.By that estimate you're spending around 500-600 per month eating food you don't cook yourself. If you're serious about this then id suggest stop eating out, stop getting takeaways, make your own lunch and stop getting coffees for a month and see how much you save.

4) Hidden Spends?
I see no mention of cigarettes or alcohol. Do either of you drink or smoke? If so, you must factor in monthly spending on these expensive discretionary items, and obviously reduce them.

5) Child Benefit?
My understanding is that Child Benefit is €140 per month for each child? Where is this E280 per month going? I don't see it being added to the effective take home pay per month figure.
 
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Techhead

Frequent Poster
Messages
106
I too would also like to know the name of the app you are using to track spending. Sounds useful
 

KOW

Frequent Poster
Messages
331
Age: 37
Spouse’s/Partner's age: 49

Annual gross income from employment or profession: approx 110,000
Annual gross income of spouse: 28,000

Monthly take-home pay approx 6,000 (pay depends on number of hours worked in the month zone months shorter than others so from 4000 up to about 5600 is my take home pay plus 1800 from my husband)

Type of employment: e.g. Civil Servant, self-employed
I'm self employed and husband permanent, full time.

In general are you:
(a) spending more than you earn, or
(b) saving?
A) spending more

Rough estimate of value of home €450k
Amount outstanding on your mortgage: €198k
What interest rate are you paying?
Not 100% sure but think it is 2.5%


Other borrowings – car loans/personal loans etc
PTSB personal loan €15k, 2 years left
Credit Union €8k

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 2083

Savings and investments: €1800 in credit union which is tied to the loan

Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: 7 and 4.
Childcare costs €308 per week
loan repayments €850 per month
Mortgage €870 per month
Family member loan €1150
Groceries/eating out €1500
Gym €25
Kids activities €150 per month

We're currently looking at getting rid of sky altogether and changing broadband provider both combined are costing us €170 per month.
Phone bill €70 per month
Health insurance €80
We don't have any car loans but we have two cars which we both need for work. Approx €140 for fuel and €120 insurance per month, tax for two cars is around €250 per quarter

Life insurance: we have life insurance but not sure of the details

I've been quite bad with money over the years and I would really like for us to be in a better position and not struggle every month. Husband has been studying the last few years and he only started working the last 3 months. I was self employed for 5 years and then went perm for 2 years in 2017 and then moved back to self employed since October. The childcare cost is also relatively new.

I have 3 questions:
1. Should we consolidate the two loans and get a new longer term loan say for 5 or 7 years so we can reduce the monthly payment? Would I need to wait another 6 months to apply considering we are both in new jobs?
2. We always find we have not much money at the end of the month so are we better working off a weekly budget and keeping wages in a separate account and pay ourselves a set sum every week depending on how much I take in?
3. If we did consolidate the loan and were in a better position every month are we better to put money off the mortgage or the loan or do we save it?

Thanks a mil.
A few of these type of posts have appeared on AAM lately. I do not wish to upset you or insult you or other similar posters in any way.
But if you and others on such good incomes have not a grasp on basic finances I am of the opinion that you should seek out a friend or family member to set out and help you achieve your deserved goals.
To work hard and squander away your money is pure madness.
Traditionally Irish parents have not discussed budgets and finances with there children. In my opinion this is also crazy.

Seek out help in the new year and stop working for nothing.
 

Boyd

Frequent Poster
Messages
1,517
Well I think it's clear they have sought out help by posting here. Not all people are comfortable asking family for financial help either in an advice or actual cash manner. (and the OP may not want to do so considering they already have a family loan). Sometimes it's best to get the cold facts from independent observers - see my point above about actual groceries Vs eating out/eating in/buying lunch/ buying coffee all being lumped together into E1500 of a grocery bill which is simply not true. It's possibly E800 groceries plus E700 optional spending.
 

Sumarisol

Registered User
Messages
21
Can you clean up the figures for outgoings? Some are listed per week (child care), some are listed per month (mortgage) and some seem to be in totality (family loan). Similarly, E25 Gym - is this per month per person or what? It's hard to know what are fixed monthly or weekly costs, suggest you edit original post to make it easy to understand. List each expense clearly by amount and by timeframe. How much are you paying per month to your family loan? Is that included in the monthly loan repayment figure?

1) Stop Borrowing

Yes you need to stop borrowing money, from anyone IMO (family, bank, credit union, credit card. I assume you have cut up your credit card at this point?

2) Understand Interest and Cost of Credit

Also important missing information, what is the interest rate on your credit card balance? In other words, how much interest are you paying on this loan per month? How much are you paying off the outstanding balance per month? (This is in effect another loan).

Please find out for sure and find out if it's fixed, variable or what. Also, what are the interest rates on two personal loans? Assuming mortgage rate is actually 2.5 percent, forget overpayment. You need to clear high interest debts first.

3) Separate Needs from Wants/Nice to have spending
I echo other posters, your grocery+broadband+sky+phone bills seem crazy high. . You need to separate groceries (required) from eating out, eating in takeaways, lunches out, coffees out. Depending on that split, your *actual* groceries might only be a reasonable E800 per month, which sounds do-able me, saving you a whopping E700 per month (of non grocery spending).
For example, "lunch a couple of times a week" could be costing you 2 people * 2 times per week * 10 euro per person = 40 per week * 4 = 160 month (could be double that or half that depending on what lunch is for you).
Takeaways once a week for 4 must be E40 quid per week so another E160 per month.
Finally, eating out 2/3 times a month for 4 people is surely E200-300.By that estimate you're spending around 500-600 per month eating food you don't cook yourself. If you're serious about this then id suggest stop eating out, stop getting takeaways, make your own lunch and stop getting coffees for a month and see how much you save.

4) Hidden Spends?
I see no mention of cigarettes or alcohol. Do either of you drink or smoke? If so, you must factor in monthly spending on these expensive discretionary items, and obviously reduce them.

5) Child Benefit?
My understanding is that Child Benefit is €140 per month for each child? Where is this E280 per month going? I don't see it being added to the effective take home pay per month figure.
Thanks so much for the detailed reply. Il update my original post with the missing information. I don't drink or smoke, my husband is an occasional drinker as in might but 6 cans a month. You're correct regarding groceries, we use the buymie app to do the lidl shop and that tends to be between 100 and 150 per week.
I think what I struggle with is the fact that some Bill's are weekly such as childcare and some are monthly such as loans and mortgage repayment. How should we plan our budget, monthly or weekly?
We cleared the credit card balance a month ago with a tax rebate but its maxed out now because of xmas presents and flights to Europe to visit a family member in Feb (I know, I know!).
Cutting the credit card up as we speak.

Will get the rates and update post later.

Really appreciate everyone's feedback. Even if some of it is harsh it's what I need!
 
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