Where to start......Do I need to speak to a Financial Advisor?

K

kodirl

Registered User
Messages
8
Age: 33
Spouse age: 36

Annual gross income from employment or profession: €77,500 (Private sect)
Annual gross income of spouse: €55,000 (Public sect)
Monthly take-home pay: c.€7,340. Children’s allowance of €280 per month not included.
Type of employment: Private and public sector.

In general are you?: Saving - well trying to!


Rough estimate of value of home: €330,000 we paid 230k in 2015)
Amount outstanding on your mortgage: €170,000 with 19 years left.
What interest rate are you paying? 3.1 variable €1,060 per month - looking at changing provider currently

Other borrowings - car loans/personal loans etc: Car loan 1 year left €377 per month

Do you pay off your full credit card balance each month? N/A

Savings and investments: €15,000 in bank savings. (don't seem to be able to save anything more really since second child started in childcare- prior to that we were over paying mortgage by €600 per month). Children's allowance savings in separate account for children's college/education future €6,400 increasing by €280 per month.

Do you have a pension scheme? No (my wife has - teacher)

Do you own any investment or other property? No

Ages of children: 1.5yrs and 3.5yrs. Childcare costs €1500 per month. This will drop to €800 in Sept 2022 and be €0 in Sept 2024

Life insurance: We both have cover €201,000 each which costs us €37 per month including mortgage protection

What specific question do you have or what issues are of concern?
I don't know really where to start. I'm 33 now going on 34 and need to put a plan into action for the future. Should I be speaking to a FA or is that needed when the money we have is not in the hundreds of thousands?

Should we be trying to pay our mortgage first or should I start a pension, or do both?

How much should I put into my own pension as a percentage of my gross income? Should it be a PRSA type ( I haven't a clue here....so any advise welcome and appreciated)/
I am in the private sector and there is nothing offered through employer in terms of pension or contributions so it will need to be figured out by myself.

Is there anything we can do with the children's allowance to make it grow by the time our two reach college age?

I am currently in year 3 of a 4 year part time degree being funded by myself. Can I claim anything back for this? It costs me €1,900 per academic year.

Thank you in advance...
 
Financial Advisors sell financial products, they do not advise people how to better handle their financial situation. You firstly need to get an overall plan for your finances. As part of that you will decide if you need to purchase any financial products and which type, at that point a visit to a FA might be worth while.

Unfortunately there is generally no advisor for your present situation. You might be lucky to get an FA or an accountant who would guide you, but it is well out of their normal line.

It down to your own efforts and maybe you will get some useful advice on here.

Here is my tuppence worth.

Saving the Childrens Allowance separately feels nice, but it makes no sense. If you had added that to the pension overpayment for the last 3.5 years you would have gotten a better return. If you have the mortgage paid by the time the children are going to college you will not need the CA to fund them.

An income of €7,620 less childcare less mortgage gives €5,060 a month. Everyone has different standards and you have worked to afford yourself a nice life, but this seems extravagant to me. If you are living an extravagant life and enjoying that, fair play to you, but if you think you are living an ordinary life I think you are overpaying for it. Have a serious look at where your money is going, if you are happy with how you are spending it thats great, but many people with a good income just allow costs to build up slowly which if they looked at coldly they would never go for.

You have mentioned that you are looking at remortgaging and getting a pension for yourself, these are both good ideas. You might visit an FA to look at pension options when you decide that is what you are doing. Putting money in a pension is great in terms of getting a tax free return, but the money is tied up long term. Paying down the mortgage, especially reducing the term frees up your money.
 
Possibly not relevant in your case but you mention childcare dropping to zero in Sept 2024 - is that because both children will be in school there? Are there no after school costs? I ask because it looks like you have two full-time salaries and I had foolishly assumed that childcare would be high for a few years then drop and only recently realised that wraparound primary care in our creche is actually 700/child. You may have family who can provide care, but given the amount of holidays they have its quite a considerable time commitment, and if you're relying on older parents assuming they'll be able and happy to do it for two kids in 8 years time might be overly optimistic. (This all may not apply to you but these are realisations I came to slowly!)

I only recently got around to starting my own pension and I found the online calculators quite useful, also the rule of thumb which says you pay in 1/2 your age from when you start - so at 33, that would be 16% if you're rounding down. Does that feel manageable with your other outgoings? Our approach is to spend the children's allowance now and hope that by doing that we're in a better position to support when they reach college age. Given your mortgage has 19 years to run and your eldest is 3 1/2, I would have thought overpaying the mortgage with the children allowance would mean it was fully paid off by the time they start college given you a lot more disposable income to meet those costs as they arise.
 
ReesesPieces said:
Possibly not relevant in your case but you mention childcare dropping to zero in Sept 2024 - is that because both children will be in school there? Are there no after school costs? I ask because it looks like you have two full-time salaries and I had foolishly assumed that childcare would be high for a few years then drop and only recently realised that wraparound primary care in our creche is actually 700/child. You may have family who can provide care, but given the amount of holidays they have its quite a considerable time commitment, and if you're relying on older parents assuming they'll be able and happy to do it for two kids in 8 years time might be overly optimistic. (This all may not apply to you but these are realisations I came to slowly!)

I only recently got around to starting my own pension and I found the online calculators quite useful, also the rule of thumb which says you pay in 1/2 your age from when you start - so at 33, that would be 16% if you're rounding down. Does that feel manageable with your other outgoings? Our approach is to spend the children's allowance now and hope that by doing that we're in a better position to support when they reach college age. Given your mortgage has 19 years to run and your eldest is 3 1/2, I would have thought overpaying the mortgage with the children allowance would mean it was fully paid off by the time they start college given you a lot more disposable income to meet those costs as they arise.
Click to expand...


When I mean childcare yes it is solely creche. My wife is a teacher and both kids will be going to her school with her. We have family who will be retired who will mind the kids after school initially while they are in the infant classes so we shouldn't be facing any childcare bills.

Ideally I'm trying to find the right balance between mortgage overpayment and how much to put into a pension....
 
You must log in or register to reply here.
Back
Top