Financial reset following home purchase

M

Maverick

New Member
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Hi all,
I enjoy learning from advice on this forum, slowly starting to understand how I can get better at managing finances. Would appreciate thoughts on controlling debt and maximising investments following purchase of our (hopefully) forever home.

Age: 41
Partner's age: 40

Number and age of children: 0

Income and expenditure
Annual gross income from employment or profession: 90000
Annual gross income of spouse: 85000

Monthly take-home pay
Me: ~4500
Partner: ~4000

Type of employment
Me: permanent PAYE
Partner: Self-employed
Both in large multinational companies

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving more on average, but lot of recent large expenditure

Summary of Assets and Liabilities
Family home worth €600k with a €420k mortgage (purchased and renovated in last 2 years)
Cash of €5k (took big hit in renovations)
Defined Contribution pension fund: Me, €160k (monthly contributions 5% EE, 12% ER)
Company shares : €25k (mix of RSUs and fully owned shares in company I work for)

Family home mortgage information
Lender: PTSB
Interest rate: 2.5%
If fixed, what is the term remaining of the fixed rate? 3

Other borrowings
Car loan: ~8k remaining

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

Life insurance: company provide 4X annual salary

What specific question do you have or what issues are of concern to you?
We've purchased our forever home in last 2 years, and undertaken some (expensive!) renovations on it. We would like to now use our (hopefully increasing) wages and bonuses to the best use possible.
We would like to focus on two things; actively decreasing mortgage through some overpayments and actively increasing overall wealth to allow potential transition out of multinationals in our mid-late 50s, before full retirement early 60s.
Plan is to switch mortgages as often as makes sense to avail of either cashback offers and/or preferential rates as our LTV decreases.

What are opinions on maximising annual bonuses (expected to be in region of 15K a year for me) for either investments/lump sums off mortgage/AVC contributions?
 
Have you looked into breaking out of that mortgage and fixing at a lower rate? Rates are only going to go one way and if you are waiting until that fixed term ends in 3 years i dont think youll see anything like the rates currently available. And that annual bonus is it gross or net?

You are leaving a lot of allowable pension contributions on the table only putting 5% in.
 
Reading down through this, you've a couple of significant issues to address
  • your partner is self-employed in a multinational, I presume as a contractor. I also don't see any pension for them so that would be one of the first things to consider, their pension, life insurance etc.
  • You've no real rainy day fund and you should focus on building up a small pot, perhaps €15k-€20k to both act as a buffer and give you that element of security and to buy you some time in a crisis. If your spouse is a contractor then their income could be hit if illness occured and they would usually be the first person out the door in a recession, regardless of what their role and with no payoff
 
Blackrock1 said:
Have you looked into breaking out of that mortgage and fixing at a lower rate? Rates are only going to go one way and if you are waiting until that fixed term ends in 3 years i dont think youll see anything like the rates currently available. And that annual bonus is it gross or net?

You are leaving a lot of allowable pension contributions on the table only putting 5% in.
Click to expand...
We are hoping to switch soon yes to Avant, and fix for a while there.
Bonus will be gross, obviously taxes would apply then if I took as cash so would be more tax beneficial to use that bonus another way.
Re the pension, yes I have been slightly averse to AVCs or extra contributions up until now but I think I probably should start.
 
Maverick said:
We are hoping to switch soon yes to Avant, and fix for a while there.
Bonus will be gross, obviously taxes would apply then if I took as cash so would be more tax beneficial to use that bonus another way.
Re the pension, yes I have been slightly averse to AVCs or extra contributions up until now but I think I probably should start.
Click to expand...
The most benefit will be AVCs and putting your bonus in as part of that (you want to use up your allowance if you can, should around 29k give or take)

Switching to Avant is a slow painful process and rates will be going up soon, id look at this as a priority.
 
Peanuts20 said:
Reading down through this, you've a couple of significant issues to address
  • your partner is self-employed in a multinational, I presume as a contractor. I also don't see any pension for them so that would be one of the first things to consider, their pension, life insurance etc.
  • You've no real rainy day fund and you should focus on building up a small pot, perhaps €15k-€20k to both act as a buffer and give you that element of security and to buy you some time in a crisis. If your spouse is a contractor then their income could be hit if illness occured and they would usually be the first person out the door in a recession, regardless of what their role and with no payoff
Click to expand...
Yes these are fair points. Partner does have pension, but it’s a small pot which is building slowly now.
Building back up my cash savings is an immediate priority yes, it took quite the hit after some unforeseen expenditure during renovations
 
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