Struggling , juggling kids and work.

Ford25

New Member
Messages
17
Age: 40
Spouse’s/Partner's age: 41

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

Monthly take-home pay -450 a week me ,460 a week wife.

Type of employment: e.g. Civil Servant, self-employed - both civil servants since 1999.

In general are you:
(a) spending more than you earn, or
(b) saving?
We are just getting by week to week , anything major ,holidays , house or car repairs comes from credit union savings.

Rough estimate of value of home 325k
Amount outstanding on your mortgage: 160k
What interest rate are you paying? 1.1%

Other borrowings – car loans/personal loans etc
None
Do you pay off your full credit card balance each month? No credit cards .
If not, what is the balance on your credit card?

Savings and investments:
210k state savings accessible from Nov 2022
50k in shares , 10 blue chips split equally.
5k in credit union emergency fund.

Do you have a pension scheme?
Im not sure about this I assume we get a civil service pension ? But we both reduced our hours to work 3 days a week , we are both working 3 days a week since 2013.

Do you own any investment or other property?
No

Ages of children: 2,4,9,12

Life insurance: No , other than with mortgage.


What specific question do you have or what issues are of concern to you?

We are a bit lost lately overwhelmed by how much money we are eating into our savings by.
Some history, we met in civil service and both myself and wife where good savers. Our first child was very difficult and is autistic and as such never settled with child minders . Along came the second child and we made the decision to reduce our hours and be at home as the stress of organising childcare and missing work was too great.

We where very lucky to be left money from an aunt of my wife around this time. After some home improvements we put the remainder in 6 year state savings mainly because it was been used on day to day expenses. This is accessible in 2022.

At the moment we are just getting by , life feels expensive and we have been passed over for promotions in work because we can't commit to 5 days a week.

I can't see a way that we can go back to work full time until the youngest is at least maybe 13 so that leaves us another 10 years on reduced working hours.

Our second youngest now is also been assessed for autism and is very difficult.

I've no clue what to do with the money from state savings next year , should we pay off mortgage ? Start a private pension ? ( We are both low rate tax payers )Invest privately ?
Or put in bank and use it as needed.

Thanks
 

time to plan

Registered User
Messages
324
One immediate consideration: how much are you eating into your savings per month? How much capital repayment are you making towards paying off your mortgage each month?

Accepting that you have a good low interest rate, if you use your savings to pay off your mortgage, and you then didn’t have to pay a monthly mortgage payment, would you then break even or even save a little each month?
 

NoRegretsCoyote

Registered User
Messages
3,180
Im not sure about this I assume we get a civil service pension ? But we both reduced our hours to work 3 days a week , we are both working 3 days a week since 2013.
Just bear in mind you are only building up pension rights pro rata. So 8 years on a three day week means you've lost about 3 years of contributions.

In your cases not a huge issue as you joined so young so you should still get full pensions 62 or 63 with 40 years service. But the longer you stay on 3-day weeks the further it gets pushed out


Otherwise it makes no sense to be paying a mortgage while getting nothing on return on state savings. I would liquidate now and pay off half mortgage.

And it's not a major deal to be drawing down savings. That's what they are there for! You have four kids and this is going to be the most expensive phase of your life. Just set yourself a budget and drip feed it in from the savings every month.
 

Ford25

New Member
Messages
17
Thanks for replies . Yearly probably average spending 5k out of savings. Some years less , some more. We take one holiday a year and then maybe a weekend staycation. I save 70 a week into credit union but it never builds up before a withdrawal for something.
I don't mind spending savings we want to bring kids away each year, neither of us drink or smoke and we have saorview , gomo mobiles etc we have cut back . Our only vices are eating out .
Been at home is more expensive with heating bills and electricity as someone is always there.
All the kids do lots of sports some are expensive like horse riding but really help with his autism and then other kids want to do same so that's another issue.

The mortgage we took out in 2004 , borrowed 270k ish for 35years so we are half way through it. We pay 835 a month . I don't know what is capital and what is interest.
State savings are up in 12months I'll get 10k interest tax free on 200k investment.
 

Ford25

New Member
Messages
17
So if you paid off the mortgage, instead of spending 5k savings each year, you could save 5k per year.
Yes if we paid off the mortgage we would have 50k left and 50k in investment accounts and be able to save 5k a year ( in theory ) .
 

time to plan

Registered User
Messages
324
Yes if we paid off the mortgage we would have 50k left and 50k in investment accounts and be able to save 5k a year ( in theory ) .
It seems to me that it would simplify things, and also be less stressful if you can be debt free and see your savings grow every month. You just need to find the right way to get the best return on them seeing as you probably have kids 3rd level education coming down the track.

On top of the 5k per year, you can still save the 70 per week and just expect that that will be spent each year on holidays etc.
 

Ford25

New Member
Messages
17
Thanks that's good advice , I'm worried about access to money going forward that has me reluctant to pay off mortgage. The two youngest will start doing more activities as they get older , and as you mention 3rd level fees.
I worry about potential to earn money now, the realisation that realistically we won't be able to return to work full time until we are both 50 that leaves very little time to build a pension, leaves little time for work promotions.

I do feel like down the line at a certain point we are going to run out of money trying to pay for things or probably end up underfunded when we retire unless we really knuckle down after 50 and return to work full time .

Stuff to think about for sure , thanks for input .
 

NoRegretsCoyote

Registered User
Messages
3,180
or probably end up underfunded when we retire
Highly unlikely! By 65 you will have a household gross €4.5-€5k a month DB, index-linked pension and lump sum of around €100k each. You will have a mortgage paid off too.

You are financially very well set up for retirement as it stands and you have €200k to spare. Your challenge is mainly about how fast you spend your savings
 

Ford25

New Member
Messages
17
Highly unlikely! By 65 you will have a household gross €4.5-€5k a month DB, index-linked pension and lump sum of around €100k each. You will have a mortgage paid off too.

You are financially very well set up for retirement as it stands and you have €200k to spare. Your challenge is mainly about how fast you spend your savings
Them figures seem very high. I haven't looked at it in detail I just know of people retiring that are same grade as myself not getting 100k lump sum.
4.5-5k seems way high too . I should probably ring HR and find out what actual figures are it seems complicated to work out .

I agree the challenge is not to spend savings too quickly.
 

Clamball

Registered User
Messages
289
If you are both working 3 days per week is there one day per week where you have no cover at home? How is that working for childcare costs. Would there be a possibility that you could increase your hours while still working 3 days, say do 3x10 hr days? This would increase your take home pay & perhaps reduce your worries. But taking the kids to activities would suffer. Even if you spent €5K extra per year from your savings it would still take 40 years to use them up.

I would pay off the mortgage, this freed up €10K earnings per year, which you can spend €5K and save €5K. I would also be very clear with the kids what your budget is and how you need to carefully spend each month. The 2x non autistic kids should be brought up to understand that they need to get a part time job, and help fund themselves through college if that is what they want to do. You have no idea about the future costs of you two autistic kids, one turns 18 in 7 short years and what happens then is probably all up in the air.

Do you have the Domiciliary Care Allowance? You don’t mention that and you should apply for it, then when your child turns 16 you can transition to a disability allowance? This will bring in an income to fund therapies and activities for the autistic children.

And ask at work about your pension? And check out your bank statements for the mortgage and you will see how much you pay in interest and capital. The citizens advice bureau has a whole lot of helpful information.
 

Brendan Burgess

Founder
Messages
44,868
First of all... You are doing absolutely the right thing prioritising the care of your children over your finances and your career prospects. Having made this decision, then see how the finances work out.

Focus on the next 10 years and don't overly worry about what happens when you retire. You are civil servants and you will be mortgage-free, so you will not be in a bad position.

Yearly probably average spending 5k out of savings.

That is nothing to worry about.

"We pay 835 a month . I don't know what is capital and what is interest."

€160k @1.1% = €1,700 a year interest = €150 a month interest.

So you are reducing your mortgage capital by €700 a month or €8,000 a year.

So you are reducing your savings by €5k a year but reducing your debts by €8k a year. In other words, you are saving €3k a year.
 
Last edited:

Brendan Burgess

Founder
Messages
44,868
210k state savings accessible from Nov 2022

This requires a bit of arithmetic.
1) If you take out €160k now to repay your mortgage, how much interest will you lose?
2) You will save about €2k in mortgage interest.
3) So it might be best to leave it there as the interest you lose will probably be more than the mortgage interest you save.

50k in shares , 10 blue chips split equally.

I thought initially it might be worth selling these to clear your mortgage, but you will left with a lump of money to invest in November 2022 and you will spend more in stamp duty and stock broker costs selling and buying again, so I would just leave these.
 

Brendan Burgess

Founder
Messages
44,868
I'm worried about access to money going forward that has me reluctant to pay off mortgage.

You should not be reluctant to do this after November next. You will still have plenty of savings. And by clearing your mortgage early, you will not be making mortgage capital repayments or paying interest.

It is clear that you should clear your mortgage. The only decision is whether to do it now or next year. I assume that next year is best.

Brendan
 

Brendan Burgess

Founder
Messages
44,868
I'm worried about access to money going forward that has me reluctant to pay off mortgage.

Clearing off your mortgage, reduces your short term and medium term access which you don't need.

But contributing to a pension, would bar access to the cash until you are 65.

So given that worry, and the fact that you will be getting only 20% tax relief and the fact that you have public service pensions, I don't think you should be making any additional contributions to a pension.

Brendan
 

time to plan

Registered User
Messages
324
You should not be reluctant to do this after November next. You will still have plenty of savings. And by clearing your mortgage early, you will not be making mortgage capital repayments or paying interest.

It is clear that you should clear your mortgage. The only decision is whether to do it now or next year. I assume that next year is best.

Brendan
As well as having access to savings, he is in a position to increase them by 5k per year against the day when the expenditure on kids increases.
 

Ford25

New Member
Messages
17
If you are both working 3 days per week is there one day per week where you have no cover at home? How is that working for childcare costs. Would there be a possibility that you could increase your hours while still working 3 days, say do 3x10 hr days? This would increase your take home pay & perhaps reduce your worries. But taking the kids to activities would suffer. Even if you spent €5K extra per year from your savings it would still take 40 years to use them up.

I would pay off the mortgage, this freed up €10K earnings per year, which you can spend €5K and save €5K. I would also be very clear with the kids what your budget is and how you need to carefully spend each month. The 2x non autistic kids should be brought up to understand that they need to get a part time job, and help fund themselves through college if that is what they want to do. You have no idea about the future costs of you two autistic kids, one turns 18 in 7 short years and what happens then is probably all up in the air.

Do you have the Domiciliary Care Allowance? You don’t mention that and you should apply for it, then when your child turns 16 you can transition to a disability allowance? This will bring in an income to fund therapies and activities for the autistic children.

And ask at work about your pension? And check out your bank statements for the mortgage and you will see how much you pay in interest and capital. The citizens advice bureau has a whole lot of helpful information.

Thanks yes one day a week my wife works from home and I'm in the office, her mam comes to our house and helps out.
It's the only day we don't have activities in the evenings for the kids. My wife gets up at 5am to start to get a free run at her work while kids are asleep even though she can't clock on till 7am and she will stay working well after signing out for the day because her mam just can't manage fully during the day.

We are paying privately for the eldest lad for additional psychology and speech and language and the psychologist mentioned DCA to us recently. We are in the process of applying for this which would be a godsend but others have said it's very very difficult to get so I'm not too hopeful.

10 hour days aren't really possible for me anyway my job is more a 9-5 I'm no use to them outside them hours. The wife aswell it wouldn't be practical with evening sports etc .

Thanks to all who replied I'll reply to them later. Certainly lots of great advice and feeling more positive about the future. It's seems clear to pay mortgage off.
 

Ford25

New Member
Messages
17
So next November situation.
210k matures state savings.
-160k mortgage (clear mortgage)
Leaves
50k shares
50k cash
An extra 800 or so a month. I'd like to automate it that 400 of that went somewhere useful so we don't just spend it.

So we have 100k excess and adding 5k a year. This will be mainly set aside to help the kids a little bit whatever way we can third level , assistance with house deposit. But may not need to dip into it for 6 years minimum .
Would it be best to invest this whole 100k ?
 
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