Live Well
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(I have rounded all figures to make it easier, for me)
Age: 41
Spouse’s/Partner's age: 41
Annual gross income from employment or profession: €100,000 (recently promoted)
Annual gross income of spouse: €60,000
Monthly take-home pay: €4,400 (mine) Spouse €3,000
Type of employment: Public Servants.
In general, are you:
(a) spending more than you earn, or
(b) saving? – Yes
Rough estimate of value of home: €250,000
Amount outstanding on your mortgage: €160,000
What interest rate are you paying? Tracker 1.25% (last time I checked). We are paying roughly €710 a month.
Other borrowings – car loans/personal loans etc: No borrowing (cleared January 2020)
Do you pay off your full credit card balance each month? Yes
Savings and investments: €12,000 in Credit Union. €10,000 in Kids college account (Child welfare goes straight into this account).
Do you have a pension scheme? Yes. I have the post 2004 public sector scheme and my partner has a similar pension. We both started working for the public service late (30+), so we are buying back years so we can both retire at 65.
Do you own any investment or other property? No.
Ages of children: 5 and 2
Childcare is €1,400 a month.
Life insurance: Yes
As stated, we save the Children’s allowance into a separate account which we don’t plan to touch even though it isn’t earning any money. It is in the Credit union. This is our emergency fund, which we will repay if we ever needed to get cash in a hurry.
Each month we pay 2300 to our separate family bill account (Mortgage + Childcare), 200 to my Mum (no pension), and 1500 to clear debt (Total 4000). Groceries, Diesel and general expenses are not pooled. We spend about 600 a month in Tesco and have recently shifted to ALDI to see how much we can save. A typical month spend looks like
Our Annual payments are separate and come to another 3,000 (Car Tax, Insurance, Home insurance, Property tax and Tv licence etc.). We don't have a budget for those and just try to pay them when they arrive.
We got married in the last 7 years and since then we have paid off a student loans (€16,000), a car loan (€18,000), the wedding (€10,000) and we renovated our house (€25,000). We don’t have a big holiday every year, we don’t even take little ones to be honest. I find that with the young kids it isn’t much a holiday although they are now of an age where we are going to look at saving for one again.
Before we got married. I did not have a good relationship with money and lived month to month on credit. I did not have a pension or any investment until my 30’s. Since then I have woken up and realised the mistakes I have made. Over the last couple of years, I have followed the Dave Ramsey baby steps philosophy, which I found helpful for keeping me grounded, even thought it doesn't apply as well in Ireland post Baby step 4.
I have now cleared all our Debt and have 12,000 in savings plus 1,000 a month which I can redirect.
What specific question do you have or what issues are of concern to you?
I am worried that both of our pensions are linked the public sector and that in the future the Government could reduce our entitlements or a part of it. All of our eggs are in the one government sponsored basket. While I understand the risk is very low, I still want to increase the amount of the money I have in retirement in case something does go wrong. My mum wasn’t entitled to a Pension (Pre 1946, not enough Contribs and cannot apply for homemakers credits), and I see my parents struggling to make ends meet which scares me.
I cannot figure out if I am maxing my Pension contributions (25% at age 40) or if that just doesn’t apply to me as PS worker. From any research I have done, a low cost PRSA AVC through Davy or LA Brokers seems to be the best option.
I believe that the €12,000 I have saved is wasting in the credit union. I would like to “invest” this money or put it to a better use.
Our current savings are our emergency fund if we ever need it. We both have secure jobs.
I see the following options.
I could save money (€500 month) now into a PRSA AVC and use that vehicle to build up a pension fund for the next 23 years. This would provide an additional income once we retire.
AND / OR
I could overpay the tracker by €300 a month then I would save 7.5 years from the mortgage and roughly €8500. However, we have talked a lot about moving and it is likely we could move in 5 years. Maybe – maybe not. I realise that it is normally the highest guaranteed, risk free, return but I think it would cost me more in the long run if I was to move to a new house.
I could use the other 200 to save for a family holiday every year or do something for the family. We don’t have a savings account for spending (Family Holiday, Christmas, etc.).
Now that I have cleared all of my debts (apart from house) I want to do something with the €12,000 I have saved up. The best idea I have had for this is to put the money into an EFT (VWCE) and leave it for the next 20+ years. I like the idea of having a separate “investment” that is growing and outside of my PS pension. I could also use this investment in 20 years+ to pay for the kids’ education or help them with a mortgage. I will never have a windfall or bonus so if I don’t save now, I don’t think I will be in a position to help them out.
I could also just pay it off the Mortgage but as it’s a tracker, that seems cheap credit to me right now. If I did a once off payment of €12,000 I would save €4,300 over the rest of the mortgage.
If I did setup a PRSA AVC I could use the €12,000 to start that off with. In some ways this idea is tied in with the EFT option, but it makes the money less accessible until I am 60 (?) which could be fine too.
Perhaps a mixture of the above?
Do you think I am on the right track?
Thank you in advance, any advice is appreciated.
Age: 41
Spouse’s/Partner's age: 41
Annual gross income from employment or profession: €100,000 (recently promoted)
Annual gross income of spouse: €60,000
Monthly take-home pay: €4,400 (mine) Spouse €3,000
Type of employment: Public Servants.
In general, are you:
(a) spending more than you earn, or
(b) saving? – Yes
Rough estimate of value of home: €250,000
Amount outstanding on your mortgage: €160,000
What interest rate are you paying? Tracker 1.25% (last time I checked). We are paying roughly €710 a month.
Other borrowings – car loans/personal loans etc: No borrowing (cleared January 2020)
Do you pay off your full credit card balance each month? Yes
Savings and investments: €12,000 in Credit Union. €10,000 in Kids college account (Child welfare goes straight into this account).
Do you have a pension scheme? Yes. I have the post 2004 public sector scheme and my partner has a similar pension. We both started working for the public service late (30+), so we are buying back years so we can both retire at 65.
Do you own any investment or other property? No.
Ages of children: 5 and 2
Childcare is €1,400 a month.
Life insurance: Yes
As stated, we save the Children’s allowance into a separate account which we don’t plan to touch even though it isn’t earning any money. It is in the Credit union. This is our emergency fund, which we will repay if we ever needed to get cash in a hurry.
Each month we pay 2300 to our separate family bill account (Mortgage + Childcare), 200 to my Mum (no pension), and 1500 to clear debt (Total 4000). Groceries, Diesel and general expenses are not pooled. We spend about 600 a month in Tesco and have recently shifted to ALDI to see how much we can save. A typical month spend looks like
| Monthly Expenses | Monthly | |
| Vodafone (Internet) | 30 | Monthly |
| Aviva Life Insurance | 37.46 | Monthly |
| Mortgage | €710.00 | Monthly |
| Sky Digital | 39 | Monthly |
| Eflow | 40 | Monthly |
| Bord Gais bundle | 127 | Monthly |
| Bank fee | 5 | Monthly |
| Diesel | 150 | Monthly |
| Childcare | 1400 | Monthly |
| Bin Charges | 20 | Monthly |
| Groceries | 600 | Monthly |
| Mobile | 15 | Monthly |
| Health Insurance | 124 | Monthly |
Total | 3297.46 |
Our Annual payments are separate and come to another 3,000 (Car Tax, Insurance, Home insurance, Property tax and Tv licence etc.). We don't have a budget for those and just try to pay them when they arrive.
We got married in the last 7 years and since then we have paid off a student loans (€16,000), a car loan (€18,000), the wedding (€10,000) and we renovated our house (€25,000). We don’t have a big holiday every year, we don’t even take little ones to be honest. I find that with the young kids it isn’t much a holiday although they are now of an age where we are going to look at saving for one again.
Before we got married. I did not have a good relationship with money and lived month to month on credit. I did not have a pension or any investment until my 30’s. Since then I have woken up and realised the mistakes I have made. Over the last couple of years, I have followed the Dave Ramsey baby steps philosophy, which I found helpful for keeping me grounded, even thought it doesn't apply as well in Ireland post Baby step 4.
I have now cleared all our Debt and have 12,000 in savings plus 1,000 a month which I can redirect.
What specific question do you have or what issues are of concern to you?
I am worried that both of our pensions are linked the public sector and that in the future the Government could reduce our entitlements or a part of it. All of our eggs are in the one government sponsored basket. While I understand the risk is very low, I still want to increase the amount of the money I have in retirement in case something does go wrong. My mum wasn’t entitled to a Pension (Pre 1946, not enough Contribs and cannot apply for homemakers credits), and I see my parents struggling to make ends meet which scares me.
I cannot figure out if I am maxing my Pension contributions (25% at age 40) or if that just doesn’t apply to me as PS worker. From any research I have done, a low cost PRSA AVC through Davy or LA Brokers seems to be the best option.
I believe that the €12,000 I have saved is wasting in the credit union. I would like to “invest” this money or put it to a better use.
Our current savings are our emergency fund if we ever need it. We both have secure jobs.
I see the following options.
I could save money (€500 month) now into a PRSA AVC and use that vehicle to build up a pension fund for the next 23 years. This would provide an additional income once we retire.
AND / OR
I could overpay the tracker by €300 a month then I would save 7.5 years from the mortgage and roughly €8500. However, we have talked a lot about moving and it is likely we could move in 5 years. Maybe – maybe not. I realise that it is normally the highest guaranteed, risk free, return but I think it would cost me more in the long run if I was to move to a new house.
I could use the other 200 to save for a family holiday every year or do something for the family. We don’t have a savings account for spending (Family Holiday, Christmas, etc.).
Now that I have cleared all of my debts (apart from house) I want to do something with the €12,000 I have saved up. The best idea I have had for this is to put the money into an EFT (VWCE) and leave it for the next 20+ years. I like the idea of having a separate “investment” that is growing and outside of my PS pension. I could also use this investment in 20 years+ to pay for the kids’ education or help them with a mortgage. I will never have a windfall or bonus so if I don’t save now, I don’t think I will be in a position to help them out.
I could also just pay it off the Mortgage but as it’s a tracker, that seems cheap credit to me right now. If I did a once off payment of €12,000 I would save €4,300 over the rest of the mortgage.
If I did setup a PRSA AVC I could use the €12,000 to start that off with. In some ways this idea is tied in with the EFT option, but it makes the money less accessible until I am 60 (?) which could be fine too.
Perhaps a mixture of the above?
Do you think I am on the right track?
Thank you in advance, any advice is appreciated.