Getting Back on Track after a long spell with little employment - Suggestions?

G7979

Registered User
Messages
181
Age: 31
Spouse’s/Partner's age: N/A

Annual gross income from employment or profession: 38K (+mileage/expenses)
Annual gross income of spouse: N/A

Type of employment: e.g. Civil Servant, self-employed
PAYE


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

Breaking even but not really making any dent into the debt

Rough estimate of value of home 210K Similar in my estate are being advertised between 195-250K


Amount outstanding on your mortgage: 300K approx
What interest rate are you paying? 5.7 (need to confirm)

Other borrowings – car loans/personal loans etc No Loans

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 3K

Savings and investments: Not really c1000 in the Credit Union

Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: N/A




Monthly Outgoings
Mortgage €1620 per month – will be coming to the end of a 5 year fixed period Jun 2012 after which I will be on a tracker mortgage (+1.25%) I think my interest rate for the moment is 5.7% but I will confirm that.

TRS 187.50 per month

Life insurance: €20 per month

Gas (Bord Gais) - c.150 per 2 month period, coming down now the weather isn’t so cold, I started a standing order last month €5 per week hope to build up a little credit over the summer months.

Electricity (Bord Gais Energy - bundle deal to have both) - c. 120 per 2 month period also coming down now the days are not so dark, I started a standing order last month €5 per week for this also.

Phone - €32 per month Eircom package, free evening + weekend calls €5 per week standing order for this also – To be honest I would get rid of this if I could, usage is pretty low however I was told I had to have one for Sky TV. I don’t currently have internet service at the house, cancelled it some time ago as I was taking my laptop to one of the casual jobs (with their permission) as I was looking for a perm/long term job at the time, I use an o2 dongle which is €20 per month, I am currently looking at internet options and phone/internet bundles but haven’t committed to one for a couple of reasons, firstly the contract, and secondly not sure if I am keeping the phone, depends on what happens with the Sky TV, see below

Internet - €20 per month o2 dongle

Sky - €25 per month DD I don’t really go out so this is sort of a necessity for me, I would look at the Freeview idea but I don’t know much about it. UPC does not supply my area.

Food - c.75 per week – Bring lunches to work, shop in the usual cheaper supermarkets (this covers household supplies and toiletries also)

TV Licence - €13.30 per month DD

Mobile - o2 c.50 per month – use it for work occasionally but mainly for phoning and texting friends etc, but not excessively.

Waste Disposal - Annual Charge €90 (paid €45 in Jan due again in Jul) €6.40 per lift I probably put bin out once per month at the moment, maybe every 6 weeks, however this may increase with the summer months because of the heat/smell.

Home Insurance - Due June 2011 last year €299

Car Tax - Due April 2011 €455, have enough in the Credit Union to cover this

VHI - 82.15 per month, was Plan B options not sure what they are calling it now, I am currently looking at other options and will be changing this ASAP, insurance is necessary due to some minor health problems – wouldn’t take the risk of not having it when I needed it.

Petrol – this is a little high, about 100 per week, however I use the car for work and do get a mileage allowance for this, probably about 300-350 per month I would get back.

Others
Contact Lenses €70 per 3 months (includes solutions etc bought online)
DVD rental club €16 per month, what can I say I love my movies!

Credit Union - €50 per week, this is to cover the various insurances TV licence (going forward) car tax etc through the year and hopefully to get me on the road to having some savings again, I started this about a month ago



Question

After 3 years in unemployment (with some low paying casual jobs along the way) I have finally found myself a decent job with a decent wage and I am anxious to get things back on track, I realise the above (and below J) is a little lengthy but it was as much for my benefit as the people who very kindly took the time to read it. Some of the figures are estimates and I have started an expenditure diary to confirm my figures, I suspect some of them may be out a little as I don’t seem to have much left each month to tackle my debts. I have managed to knock about 3k off my credit card (original debt was 6K) and am reducing the card limit as I go so nothing else can go on the card, (not using it anyway, cut it up once I got the new job) minimum payment each month is about €75 however after 3 years that was the only debt I ran up, this is reducing slowly for a number of reasons, the new job meant some purchases had to be made, appropriate clothing for a start as all of mine were pretty tatty after so long!

There also are a number of things which I need to do which I haven’t been able to do for a very long time, my car hasn’t been serviced in 2 years so that is a priority as I now use it for work, I also had to buy new tyres recently as they were worn and one burst on me. My boiler hasn’t been serviced since I moved into the house and there are also some other repairs around the house I haven’t had done because of my financial situation

Also the realities of putting so many things on the long finger is catching up with me, I really need to visit the dentist, I also need to go to the opticians for my check up and to renew my prescriptions, my passport ran out several years ago, and my drivers licence is also due for renewal - the list is endless. I am also struggling a little with well meaning friends and relatives who think because I have a proper job again things are back on an even keel, I keep getting invited to events and gatherings (weddings etc as well as the local pub for a night out) and are getting a bit thick with me when I am still pleading poverty and refusing them.

My Priorities:
  • Clear the Credit Card – this is the last tie to the bad times and I want it gone!
  • Build up a reserve fund of savings – I have virtually no savings as I used them all when times were tough, what do you think I should be aiming for here, is the 6 months mortgage payment still the way to go and where should I put that, I was thinking in the Credit Union?
  • Start a pension - maybe with the extra money I hope to have next summer when my mortgage moves to a tracker.
  • Start a social life again! Is it true the Irish are friendlier than when I began my hibernation?



Any thoughts suggestions or comments from those who are still reading would be very welcome!
 
Hi G7979

a couple of thoughts occur to me (aside from well done on keeping your head above water for such a protracted period!)

1) Mortgage aside, your debt consists of your credit card debt and it is likely that this is at quite a high rate - have you considered looking for a loan in order to clear that at a lower rate? Given that you have some money in the CU you could likely obtain a better rate loan from them relatively easily for that amount. If your repayments remained the same you would find that you are still reducing the balance at a much faster rate.

2) Check your health insurance and see if you can claim any of the dental/medical work that you need done. As an aside you would have had entitlement to some free dental etc while unemployed. Other than that - shop around for your dental and optical needs - these may be cheaper to source in the North for example and even in the South there is quite a wide range on pricing.

3) In terms of saving - you appear to have had your head screwed on previously with regards to that area so I am probably preaching to the experienced. You need to think about saving as something besides a lump of money in the corner. You need to layout some short, medium and long-term objectives for your saving (from below, short could be for tv licence, insurance, etc - things that you can plan for in the next year), medium term (car replacement, holidays, investment, etc) and long term (retirement etc) as well a cover of emergencies. I think sit down and start with your priorities/wishes/objectives and then start thinking about how to meet them.

Good luck!
 
Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? 3K

Savings and investments: Not really c1000 in the Credit Union

Use the €1,000 in CU to pay off some of the credit card. Interest rate on CC is much higher than any interest (if any) you are getting from the CU. By not paying the CC, even though you have funds, you are costing yourself money.
 
You're doing really well. Ignore the people who want you to go out for now. Would advise you to put off the pension but pay down extra on the mortgage for a couple of years to get a grip in the negative equity. It will get easier as you spend more time in employment.

That standing order of extra for the gas and esb is very clever. Didn't realise people could do that it's good advice for people who struggle in the winter months.
 
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