Money Makeover, Late 30s, what next?

laura28

Frequent Poster
Messages
91
Age: 39
Spouse’s/Partner's age: 42

Annual gross income from employment or profession: €70,000
Annual gross income of spouse: €53,000

Monthly take-home pay - €6,350

Type of employment: e.g. Civil Servant, self-employed – I am public sector, spouse is private sector.

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

Rough estimate of value of home - €500k
Amount outstanding on your mortgage: €260k
What interest rate are you paying?
€157,862 Tracker 1.75
€105,000 SVR 3.15

Other borrowings – car loans/personal loans etc - None

Do you pay off your full credit card balance each month? Yes
Monthly Outgoings –
Mortgage
€1,737.00​
Savs
€1,400.00​
Bills
€700​
Childcare
€730.00

Savings and investments:
€25k each for 2 x children – currently sitting in current account, plan to put into long term savings for when children grown up – state savings type thing – need some advice here
€10k sitting in PTSB instance access savings account
Do you have a pension scheme? Yes, me Public Sector, Pre 2013, DB scheme. OH has private pension scheme – not contributing as much as he could be

Do you own any investment or other property? No

Ages of children: 6 & 8

Life insurance: Mortgage insurance on reducing balance


What specific question do you have or what issues are of concern to you?
Without getting into too specific details, above is a synopsis of our current financial situation. We have recently had some large financial outlays while getting work done to our forever home as well as receiving some funds via inheritance.
I guess in terms of our mortgage – we have a tracker on a portion of it – given the high SVR rate is there any consideration to moving the full balance to a lower fixed rate?
Our plan is to commence overpaying our mortgage now with the view to clearing in 10-11 years, while saving at the same time, as per the sample month’s budget above.
Anything else we should be doing/considering/
Where should we invest/ save the €50k for our 2 x children?
 
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Easel

Frequent Poster
Messages
84
Your combined mortgage rate is 2.28% which is better than anything you will get on the market.

Would you not consider putting the €50k off your mortgage? preferably off the variable element of it if possible. This will save you €1,500 a year in interest.

In your position I would keep a rainy day fund of 20k, get your partner to contribute the maximum available to their pension and pay everything else off the mortgage.
 
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laura28

Frequent Poster
Messages
91
Your combined mortgage rate is 2.38% which is better than anything you will get on the market.

Would you not consider putting the €50k off your mortgage? preferably off the variable element of it if possible. This will save you €1,500 a year in interest.

In your position I would keep a rainy day fund of 20k, get your partner to contribute the maximum available to their pension and pay everything else off the mortgage.
The €50k was very much left for the kids so we want to honor that request, even though I understand that paying off the mortgage would make more sense.
We are going to try and up the raindy day fund through regular savings and look into max pension contributions for my OH
 

Easel

Frequent Poster
Messages
84
I presume that you do not wish to take on any significant risk with the inheritance for the kids also? If this is the case just stick it in to the 10 year savings cert with the post office and forget about it.

With the rest-

Build up emergency fund to 20k
Max pension contributions
Overpay mortgage
 

laura28

Frequent Poster
Messages
91
I presume that you do not wish to take on any significant risk with the inheritance for the kids also? If this is the case just stick it in to the 10 year savings cert with the post office and forget about it.

With the rest-

Build up emergency fund to 20k
Max pension contributions
Overpay mortgage
Yes absolutely no risk with the kids inheritance. We had been looking at the savings certs and they do seem the safest and best deal at the moment
 

cremeegg

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Messages
2,958
If the kids are 6 & 8 its all just family money for at least 10 years.

Pay the €50k off the mortgage now, you have then got 10 plus years to gather the money for the kids, longer if you don't intend to give them a cheque for the full amount on their 18th birthday.
 

MangoJoe

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Messages
116
If the kids are 6 & 8 its all just family money for at least 10 years.

Pay the €50k off the mortgage now, you have then got 10 plus years to gather the money for the kids, longer if you don't intend to give them a cheque for the full amount on their 18th birthday.
You do hear of parents dutifully stashing the entirety of their child benefit under some notional mattress as its "the kids money" while Mammy and Daddy then go off and have to borrow money via multiple credit avenues for the next 18 years.

I wonder how many hundreds of millions are laid away for all of the future young adult Sorcha and Odhrans to frivolously blow on world travel 18 years later...... Cocktails on the beach by the Copacabana while Mam and Dad are by this point just two poor drained husks at home.
 

laura28

Frequent Poster
Messages
91
Thanks for all the replies!
MagoJo - laughing at your response, we are most definitely not in a position to hand back the money in a cheque for travelling on their 18th birthdays! It will be much more for down the road when they might buy a house etc.
I understand the sensible option is to pay down more off the mortgage but am struggling with that idea..
 

Buddyboy

Frequent Poster
Messages
521
"Struggling with the idea" is costing you €1140 per annum (the interest you are paying on the 50,000 on the mortgage).
If you pay it off now, in the very unlikely event you need the money sooner, you can borrow it.
Always, not only look at what you are earning on money, but what it is costing you to keep it (i.e. not paying off loans).
 
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