one off expenses causing distress

S

SCA911

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Age: 36
Spouse’s/Partner's age: 33

Annual gross income from employment or profession: 40000
Annual gross income of spouse:44000

Type of employment: e.g. Civil Servant, self-employed
Public Sector - Local Govt, Full Time, Perm
Spouse - Private Sector: Full Time Permanent

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

Rough estimate of value of home €400K
Amount outstanding on your mortgage: €348K
What interest rate are you paying? 3.49% fixed until end of 2012

Other borrowings – car loans/personal loans etc
Own €400/month
Spouse €200/month
Both to credit union

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €1600

Savings and investments: None

Do you have a pension scheme? Both

Do you own any investment or other property? Yes, Value:Unsure but at a guess €180K, Mortgage outstanding: €120K, variable rate 4.2%
Currently rented out @ €850/month with mortgage repayments of €930/month so difference made up by us plus other expenses such as NPPR, PRTB, maintenance, etc. Really don't want to sell this property as it is almost paying for itself and we have really good tenants, so far anyway.

Ages of children: 2yrs and 1 yr old

Life insurance: €45/month tied to Mortgage on principal residence
Health Ins: €230/month for family
Car Insurance: €62/month for two cars
House Ins: €41/month

Childcare:€650/month

Phone: approx €40/month

Sky: €67/month: cannot reduce this until Nov as stuck in a 12 month contract

Mobiles: €50 approx for both

Broadband: €20/month

Groceries: €500/month

Electricity: approx €72/month

Oil Refill: €83/month - new house with only last winter to judge by, amount spread over 12 months for budgetary purposes

Petrol: €250/month on both cars - going to work in opposite directions so cannot share car


What specific question do you have or what issues are of concern to you?
Every month we both put an equal amount into our joint account to cover expenses outlined above. However we never have anything left over to put away for things that come up once or twice a year such as car tax, rubbish collection, birthdays, etc. We have two weddings this year, both abroad, both close familty members so can't opt out. We never go out, do the majority of grocery shopping in Aldi, with extra baby stuff from Dunnes or Supervalu. I am really concerned as every month our outgoings are exceeding our income and with rising taxes, end of fixed rate in less than 18 months and increased charges i.e. property/water, we are already facing a rising credit card bill that we cannot pay off. We had managed to reduce the credit card from €4k to what it is now but cannot see how to get it down to zero. I always thought we were quite careful with money but we never have enough to make ends meet anymore as there are alway extra expenses, such as doctor visits, prescriptions and so on.

Any advise welcomed, thanks.
 
one thing to consider- 2 weddings abroad- if 4 of you go its going to cost you an absolute fortune as you will need 4 outfits, accommodation, flights etc x 2 + presents, spending money, family meals out if you're all staying a few days, etc etc.

. plus if same family at both weddings you need second set of outfits too or its social death. ok the man can just change shirt but woman and kids need alternative outfits.

you need to seriously look at how you manage the weddings - can you just go to one ? one of you go to each wedding , other stays at home with kids?. turn down both ?
if as you say they are close family members you should be able to have a discreet chat , explain money very tight, and just send a pressie. if you not close enough to say this then you should be able to turn down the invite !........going to a wedding costs a fortune - and thats just if its in ireland.

if you're trying to get your finances back on track you simply can't afford to go to 2 weddings abroad- thats the bottom line.
 
Firstly get a valuation of the investment property done so you know exactly what equity is in it. At the minute, it is decreasing in value on a monthly basis and is costing you €150+ per month to subsidise it. So what if you've got good tennants?, that has nothing to do with the hard financial facts.

Secondly, depending on what you sell the house for, will that clear your outstanding loans?. If it would, then including what you were losing in the house monthly, then you should be €700-€900 a month better off. So, ask youself a question, what is better, having good tennants in a loss making property or €700 a month in your pocket and no debts beyond a mortgage?

Thirdly, do a full review of your tax affairs, make sure you have claimed for everything you are entitled to, including medical expenses.
 
With the weddings, the four of us are going one of them and just two of us to the other one. Husband is sorted, as you say, with suit and shirt that he has. The weddings will not be attended by the same people as different sides of the family so my outfit is the same for both, bought in the sales. Kids outfits bought for next to nothing following tip on where to get them from family member. Booked flights for weddings as soon as they were available last year to get them as cheap as possible and booked accomm on the net as well as it was cheaper. So this is my point, we planned ages in advance to be able to go to these weddings and really felt that on our wages we should have been able to cover it with careful planning but something always comes up. Leaving the wedding stuff out, my query still stands going forward: where can we cut down on every day stuff to provide/save for the unforeseen.
 
It would really help if you gave a break down of actual take home pay, also you are receiving child benefit so part of income.
What is the actual payment on the mortgage?
What are the balances on the loans and the term remaining? Also have you shares that you could off set some against the loans.

Agree with others re weddings.

In relation to the expenses you say that crop up like car tax, birthdays, bins, they are known expenses and should be taken care off when you are lodging to the joint account each month.
Start a spending diary.
 
i think you need to do a spending diary - as you say you have gross income of 88,000, you should be able to live on this very comfortably. - detail every single penny you both spend for a month. 500 a month sounds quite tight for 2 adults / 2 kids if this includes formula/ nappies / wipes etc. you also have no mention of clothes for kids or yourself. i think you will be amazed when you do it how it all adds up. cut up your credit card today- and concentrate on getting rid of last 1600 .

also you are lucky with kids that age as they happy with simple things in life so consider scaling back more to the lifestyle we would have had as kids- i've done it for last year when we had to live on one salary and its great. my kids are 1 & 3.

kids birthdays are family only- no big fuss- cake and candles and you all there is grand, if you're going on day out bring a packed lunch-keep up with all the free stuff on over the summer so you don't feel deprived. theres great stuff on all over the country. I make a big bolognaise/ homenade veg soup / sunday roast every week. cheap and cheerful homemade stuff, and tasty too. for birthdays we buy each other something small -e.g a book . I bought jamie oliver 30 min meals and we cook lovely meals from that a treats. we also got rid of sky - as with 2 young kids you never get time to watch telly anyway !!! don't miss it for a second. buy the kids clothes in pennys- they've grand stuff, and at that age they cute in anything.

if you have to buy pressies for neices / nephews for exmaple pci kup something in TKMaxx and keep an eye in sales such as next / M & S for little pressies so you have a small stock pile . you shoudl avoid smy*hs at all costs- its impossible to get out of there without spending a fortune- even if its a great shop !
 
just thought of another one- if kids are sick try the pharmacist first before you bring them the doctor- they're a mine of information and can often give you an OTC remedy for minor stuff especailly for the kids and saves you 50 euro a pop.
 
wab0607 said:
Do you own any investment or other property? Yes, Value:Unsure but at a guess €180K, Mortgage outstanding: €120K, variable rate 4.2%
Currently rented out @ €850/month with mortgage repayments of €930/month so difference made up by us plus other expenses such as NPPR, PRTB, maintenance, etc. Really don't want to sell this property as it is almost paying for itself and we have really good tenants, so far anyway.
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You say that this property is almost paying for itself. It's not! It's costing you EUR 80 per month not including maintence costs. With every interest rate rise it only going to cost you more and there's the new EUR 100 property tax coming in next year.

I note that you don't want to sell this property but it's eating money you can't afford.
 
wab0607 said:
Sky: €67/month: cannot reduce this until Nov as stuck in a 12 month contract
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Are you sure about this? While they won't let you cancel the subscription, they may let you change to a cheaper package. Ring them. It worth a chance.
 
Guns N Roses said:
Are you sure about this? While they won't let you cancel the subscription, they may let you change to a cheaper package. Ring them. It worth a chance.
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Yes - I can confirm that they allow you to do this - so you trim back approx. €45/month there. Petrol expenses are high. Looks like your doing some mileage. What are you driving? Maybe you need to switch to something that runs on fumes (eg. a 1.4 L diesel)?
 
Thanks for all the feedback. I will have to start a spending diary, I know that there is money spent every month that we are not tracking i.e. going to the shop for top ups between big grocery shop.

Petrol expenses are high. Looks like your doing some mileage. What are you driving? Maybe you need to switch to something that runs on fumes (eg. a 1.4 L diesel)?
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Yes the petrol expenses are high, mostly mine I have to travel approx 300 miles a week to work but can't afford to change the car.

Ouch! You'd nearly be better off staying a home. Anychance a parent will look after your children for a few days a week
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There is nothing I would love more that to stay at home with my children however while the cost of this is high for us at the moment that won't last for ever and we need the remainder of my pay to cover other essentials such as insurances and mortgage. A family member does mind them for us but we insist on paying them something, could never expect it to be done for free. Also one of my children attends creche two days a week ,which if we could afford it we would increase the days, but can't cut back as the social interaction is essential.

How long is left on both these car loans?
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Both to 2014

Do you really need 3 phones? Get rid of your landline.
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Have talked about this and think we will do this now

I note that you don't want to sell this property but it's eating money you can't afford.
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We have had it on the market at a very reasonable price, having reduced it twice, for over a year and only a handful of viewings. We could not even get into a negotiation and would have accepted lower but not a single offer was made despite the house being in a good location and excellent condition. We don't want to give it away having both worked so hard over the last 10 years and not living outside our means.

just thought of another one- if kids are sick try the pharmacist first before you bring them the doctor- they're a mine of information and can often give you an OTC remedy for minor stuff especailly for the kids and saves you 50 euro a pop.
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That's a good one choccy, will remember that next time. Sometimes it fells like we have a standing order with the doctor we're in and out so often with one or both of them.
500 a month sounds quite tight for 2 adults / 2 kids if this includes formula/ nappies / wipes etc. you also have no mention of clothes for kids or yourself
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500 a month is do-able. We do two big grocery shops a month, always get things for house when reduced, e.g. shampoos, toothpaste, cleaning materials, etc. Buy the nappies and wipes on offer by keeping an ear out for those offers. Most of the kids clothes come from their cousins as there are about 50 million of them - I'm a big believer in passing things on and have a bag of clothes at home which mine have grown out of ready for the next cousin to arrive. Prior to being in the position of scraping together the funds to cover everything I used to like to shop and have more than enough clothes for myself.

kids birthdays are family only- no big fuss- cake and candles and you all there is grand,
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Ditto - we only ever have immediate family living nearby come around for tea and cake for the b'days. All the fuss made of the kids by the adults is more than enough excitment for them at this age.

if you're going on day out bring a packed lunch-keep up with all the free stuff on over the summer so you don't feel deprived. theres great stuff on all over the country.
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Have to say my two love nothing more that playing in their own garden when the weather allows, and by that I mean as long as it's not raining or too cold then they are kitted out accordingly, either coats or sun block, and sent out and have a ball. If they are stuck indoors we play puzzles or games or colouring. It's great when at this age they can be entertained so cheaply.

I make a big bolognaise/ homenade veg soup / sunday roast every week. cheap and cheerful homemade stuff, and tasty too.
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Ditto - Roast on Sunday, leftovers for Monday or else sandwiches for lunches. Lasagne, bolognaise and sheppards pie all made at the weekend for dinners during the week and lunches made every morning for work.

for birthdays we buy each other something small -e.g a book .
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Ditto
 
Guns N Roses said:
You say that this property is almost paying for itself. It's not! It's costing you EUR 80 per month not including maintence costs. With every interest rate rise it only going to cost you more and there's the new EUR 100 property tax coming in next year.

I note that you don't want to sell this property but it's eating money you can't afford.
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And this is before you include the tax due on the rental income which I reckon is about 200 per month as well.

I see you have it on the market, but it must be overpriced if you are getting no offers. Even if you dropped the price quite a bit you would be able to reduce/pay off at least one of the car loans and seriously free up money every month.

It sounds like you have a handle on your day-to-day expenditure (and I would have thought 150 per week for 2 toddlers was low).
 
hi wabo607,

it sounds like you are running the house pretty tightly !! .....like myself you've an eagle eye out for the special offers !
we in same boat with creche- kept 3 yr old in for 3 days when DH out of work even though cost was mad- but the kids need it. if its any consolation the child care does get cheaper in next yr or so for you.....also consider a child minder with other kids as creche alternative when they a little older- tends to be much cheaper than creche, the only thing is you need a back up plan if childminder is sick. sorry if going off topic.
 
wab0607 said:
Yes the petrol expenses are high, mostly mine I have to travel approx 300 miles a week to work but can't afford to change the car.
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I travel 400 miles/week to get to/from work alone - and have bought specifically on the basis of economy alone. I'm not sure if there's anything more economical than what i'm driving but if there is, I don't think it's by much.

I understand what your saying re. not being able to change - but if not already a possibility, at some stage this becomes a viable option. Look carefully for what km/ltr. the ideal replacement would get you and see what it would cost in the second hand market. Then see what's achievable in selling your existing car.

My motor is far from a status symbol - but it does represent sheer economy -and to me that's all that counts. Keeping the right marque on the road is a luxury item - and it sounds like it's a luxury that you currently can't afford.
 
I'm not surprised you are finding it difficult to manage. You have a large mortgage, are throwing money at an 'investment' property, have 2 large car loans, and are going on two foreign holidays this year.

Its just not sustainable. You ought be putting cash aside for the tax and interest hikes coming down the track. If it were me I would offload the 2nd house by undercutting similar houses on the market, pay off loans and start building up a rainy day fund.

Is it possible to get out of one or both weddings? They really are going to set you back further.
 
I understand what your saying re. not being able to change - but if not already a possibility, at some stage this becomes a viable option. Look carefully for what km/ltr. the ideal replacement would get you and see what it would cost in the second hand market. Then see what's achievable in selling your existing car.

My motor is far from a status symbol - but it does represent sheer economy -and to me that's all that counts. Keeping the right marque on the road is a luxury item - and it sounds like it's a luxury that you currently can't afford.
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Had to upgrade car in 2010 as family was expanding. Had at that time been driving a 10 year old car so no trade in value. Bought a 3 yr old car for the family/work transport need and hubby uses the 10 yr old car to get to and from work. Believe me, neither car is a status symbol/luxury item. Both are there for practical reasons but could not reach the prices at the time for a diesel so have to put up with petrol costs.


I'm not surprised you are finding it difficult to manage. You have a large mortgage, are throwing money at an 'investment' property, have 2 large car loans, .

If it were me I would offload the 2nd house by undercutting similar houses on the market, pay off loans and start building up a rainy day fund.
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Large mortgage can't be avoided at this stage, it was never planned as the idea had been to sell first home to reduce mortgage on current home. WE have put the 2nd house on the market and priced it well under others in the area, still no bites. We are very reluctant landlords and only decided to rent out because we couldn't carry the two mortgages any longer.

I never said that the loans were for a car only. They are partly for a car and partly for additional items which we had to pay for when our house build was finished, i.e. additional security and drainage costs which were unforeseen but also unavoidable.

are going on two foreign holidays this year. Is it possible to get out of one or both weddings? They really are going to set you back further.
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They are not foreign holidays, they are family functions and no we cannot get out of them, one is my sister and the other one, my husband is best man!:(
 
wab0607 said:
Believe me, neither car is a status symbol/luxury item. Both are there for practical reasons but could not reach the prices at the time for a diesel so have to put up with petrol costs.
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Sounds like you are doing all the right things to be honest - it's just a case of the circumstances you find yourself in. However, keep choice of vehicle in mind in advance of your next car purchase - as you can definitely make savings there - but of course, only when it is viable to do so.

Best of luck with it.
 
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