Savings

Michael D Not Higgins

OU812 wrote: »

Follow the money... You should easily be able to save between €1500 & €2000 a month on that income with just two people & now making any serious cutbacks.

1500-2000 would be above 50% of their net income. This is not typical and is most surely going to require serious cutbacks.

In the OP's case, having only 50% of their income on their spending would mean:
€500/month on rent
€400/month on groceries
€500/month on transport
€250/month on insurance, bills, etc.
€250 left on everything else which is €30 each pocket money per week

That is barely living.

Sleepy

Make up meal plans - e.g. Roast Chicken on Sunday, use the leftovers for Chicken Fried Rice on Monday, Slow Cooker a Spaghetti Bolognese for Tuesday etc.
Do the weekly shopping in Lidl / Aldi - if there's meat/veg/fish on special, see if you can adjust your meal plan to make use of this

We do this and feed a family of 4 for about €100 a week. Some weeks 20 more, some weeks 20 less. Usually need to pick up milk / bread once a week outside of the main shop etc. but it makes a big difference. Before we did it, we were throwing out a disgusting amount of food.

Not having kids, I'll bet the majority of your surplus cash is going on nights out, taxis, take-aways, clothes etc. I was the exact same before I had kids and it's a big regret of mine that I didn't manage my money better back then.

Other things to check for in your spending: do you end up eating on the go / grabbing a coffee when filling up the car with diesel etc. A fiver on munchies with your petrol every few days can add up to €1,000 a year very quickly.

Squall Leonhart

^ +1

If they managed to save 1000 a month it'd be a great start, it'd be 200% what they are currently saving. I think that'd be a reasonable and realistic target without sacrificing life altogether. In my opinion it clearly doesn't suit the OP to put life on hold and save like a mad thing, or she wouldn't be here asking for advice (that's not meant to be negative or any sleight on the OP).

Sleepy

Michael D Not Higgins wrote: »

1500-2000 would be above 50% of their net income. This is not typical and is most surely going to require serious cutbacks.

In the OP's case, having only 50% of their income on their spending would mean:
€500/month on rent
€400/month on groceries
€500/month on transport
€250/month on insurance, bills, etc.
€250 left on everything else which is €30 each pocket money per week

That is barely living.

I'd say it's pretty much par for the course when saving for a mortgage tbh. Myself and the other half probably have about €500 a month between us for "pocket money" at the moment. The OP should be able to save 1,200 or so a month without too much cutting back imo.

intheclouds

sebcity wrote: »

Would putting everything on your debit card look ok to a bank when you're trying to get a mortgage?

No - using a debit card is sensible, the money is there. Its credit that is viewed badly.

loveisdivine wrote: »

The only problem with taking out cash and using it to survive on for a week, is I thought the banks wanted to actually see where you spend your money. For instance, you could withdraw €200 for the week, but really be spending it on gambling or something. That's just what I was told anyway.

No, you could say that you were spending any withdrawal from the banklink on hookers and coke - banks dont really care if you are saving and you have a "reasonable" sum as outgoing. What they care about are a lot of or dubious credit card transactions or constantly going into overdraft on a current account or large transfers to paddy power accounts etc.... 200 euro withdrawn every saturday morning from the banklink wont raise a peep from anyone.

TENHNY

Squall Leonhart wrote: »

^ +1

If they managed to save 1000 a month it'd be a great start, it'd be 200% what they are currently saving. I think that'd be a reasonable and realistic target without sacrificing life altogether. In my opinion it clearly doesn't suit the OP to put life on hold and save like a mad thing, or she wouldn't be here asking for advice (that's not meant to be negative or any sleight on the OP).

Ha I hadnt considering put life on hold but do you know what it might not be a bad idea,
will the stash gets a bit larger

Uriel.

TENHNY wrote: »

Which banks offer 7 day notice account

Thanks

I am with AIB and it can be set up via Internet Banking.

TENHNY

Sleepy wrote: »

Make up meal plans - e.g. Roast Chicken on Sunday, use the leftovers for Chicken Fried Rice on Monday, Slow Cooker a Spaghetti Bolognese for Tuesday etc.
Do the weekly shopping in Lidl / Aldi - if there's meat/veg/fish on special, see if you can adjust your meal plan to make use of this

We do this and feed a family of 4 for about €100 a week. Some weeks 20 more, some weeks 20 less. Usually need to pick up milk / bread once a week outside of the main shop etc. but it makes a big difference. Before we did it, we were throwing out a disgusting amount of food.

Not having kids, I'll bet the majority of your surplus cash is going on nights out, taxis, take-aways, clothes etc. I was the exact same before I had kids and it's a big regret of mine that I didn't manage my money better back then.

Other things to check for in your spending: do you end up eating on the go / grabbing a coffee when filling up the car with diesel etc. A fiver on munchies with your petrol every few days can add up to €1,000 a year very quickly.

no mad nights out maybe once every 12 weeks, no takeaways as on healthy eatting buzz,
I bring my lunch to work and buy a jar o cofee and make it at work rather than spending 2 euro a cup at filling station, I do need to get better with food shop do as at present i pop to get whatever meat we are having that evening at dont seem to leave with change

loveisdivine

loveisdivine wrote: »

The only problem with taking out cash and using it to survive on for a week, is I thought the banks wanted to actually see where you spend your money. For instance, you could withdraw €200 for the week, but really be spending it on gambling or something. That's just what I was told anyway.

Never heard this and I doubt very much its the case, cash is a perfectly legitimate way to spend your money. Except for stuff that I pay by DD or online banking almost everything else is in cash, even bills I often pay in cash at the post office if I can. I take out a few hundred in cash every now and then to keep me going. In the last month for instance I've only used my debit card twice and one of them times was for something I was claiming back the money on expenses so wanted it recorded.

Aside from the fact I prefer dealing in cash a good amount of it is spend in pubs, eating out and some lodged manually in my betting account all of which is better they don't see and they wonder about than if they know for sure about it

OU812 wrote: »

Follow the money... You should easily be able to save between €1500 & €2000 a month on that income with just two people & now making any serious cutbacks.

I wouldn't agree with that. I was going to say 1000 would be a decent number to aim for. You have to live too.

draiochtanois

This post has been deleted.

Michael D Not Higgins

Sleepy wrote: »

I'd say it's pretty much par for the course when saving for a mortgage tbh. Myself and the other half probably have about €500 a month between us for "pocket money" at the moment. The OP should be able to save 1,200 or so a month without too much cutting back imo.

You're listing a figure 300-800 less than the other poster.

From the costs I've listed there's no holidays, no socialising, no costs but the essentials to exist and go to work. Not even presents for birthdays and Christmas can fit into that budget. The pocket money I listed would stretch to a takeaway and a couple of drinks with a trip to the cinema once a week. That's a sorry state of existence.

A rule of thumb is to save at least 20% of your net income, so 700/month in the OP's case. They're only saving 500 at the moment. They should aim for 700 in the short term and then go higher when they're able to evaluate their outgoings.

No one's going to be able to adjust overnight to a marked decrease in their spending. Saving €100/month on changing weekly shopping habits is doable, so is €100/month on limiting some luxury spending. Saving another €500 would take considerable work on each purchase in the household. That means fewer nights out, less money on holidays, switching providers for most of your insurance/utilities/etc., and other serious changes to spending behaviour.

messy tessy

My advice would be to document every single thing you are spending for a month, and then try to make a few changes the next month. It does really depend on how badly you want your own place, and how much you are willing to do to make that a realistic goal.

I am saving about 45% of my income each month, with the aim of getting my own place. Like you my rent is quite cheap (for Dublin) so I am very conscious of taking advantage of this while I can. I still live reasonably well, but have cut a lot of lunches and takeaways, and general frivolous spending.

Best of luck with it!

Logicost31

I'm currently saving hard for a house too, I reckon €1000 - €1200 a month should be achievable at that salary. On a related note, when it comes to spending all the savings on a deposit/stamp duty/ solicitors etc, would people generally try to keep a "safety net" amount and how much? I've always tried to keep a couple of grand aside in case I lost my job or large unexpected expense, but this amount became the starting point for the house savings...I don't feel very comfortable going to absolute €0 reserve, but I get the impression a lot of people do this when it comes to buying a first home.

TENHNY

Logicost31 wrote: »

I'm currently saving hard for a house too, I reckon €1000 - €1200 a month should be achievable at that salary. On a related note, when it comes to spending all the savings on a deposit/stamp duty/ solicitors etc, would people generally try to keep a "safety net" amount and how much? I've always tried to keep a couple of grand aside in case I lost my job or large unexpected expense, but this amount became the starting point for the house savings...I don't feel very comfortable going to absolute €0 reserve, but I get the impression a lot of people do this when it comes to buying a first home.

My sister recently bought and solicitor allowed her pay off legal fees over few months,
which eased her cashflow, maybe something to ask solicitor about stage payments,
Best of luck

intheclouds

Logicost31 wrote: »

I'm currently saving hard for a house too, I reckon €1000 - €1200 a month should be achievable at that salary. On a related note, when it comes to spending all the savings on a deposit/stamp duty/ solicitors etc, would people generally try to keep a "safety net" amount and how much? I've always tried to keep a couple of grand aside in case I lost my job or large unexpected expense, but this amount became the starting point for the house savings...I don't feel very comfortable going to absolute €0 reserve, but I get the impression a lot of people do this when it comes to buying a first home.

Yeah, I did this when I bought my place. I also started the mortgage with a 3 month moratorium (ie, drew down but didnt start making payments for 3 months) so that I could have a few quid extra to cover things for the first while.

Mind you - my job felt very safe at the time. Dont know how comfortable Id be doing that again (having been through redundancy so a bit less inclined to believe jobs are really safe).

In terms of savings I like to keep enough by such that if I was made redundant I could pay the mortgage for 12 months. That way I could pay for groceries/bills on social welfare for 1 year if I had to. Obviously occasionally there are large dips into savings for things but I try to keep it close to 12 months of mortgage repayments.

padjo5

TENHNY wrote: »

Thanks for all the constructive quote combined income per month after tax is 3520k,
I Have done all tally of all our bills outgoing including savings just now ,loans esb, heating diesel (we both 45 minute commute) health & car insurance phones, internet, tv etc not including grocery shop which i know we spend to much on by shopping locally and not bulk buying
comes to 2550 and remaining balance of €970 i dont now where does standing this week i will noting every spend.
We have no children at present.

Do ye good savers just take amount of of wages and live on that no matter what, our what practices do you find work best?

Spend what you have left after savings, don't save what you left after spending.

As others have said increase (double?) what you are saving (as soon as income hits accounts), make sure there is enough to cover essentials, and make do with what is left over. Simple!

Logicost31

Logicost31 wrote: »

On a related note, when it comes to spending all the savings on a deposit/stamp duty/ solicitors etc, would people generally try to keep a "safety net" amount and how much? I've always tried to keep a couple of grand aside in case I lost my job or large unexpected expense, but this amount became the starting point for the house savings...I don't feel very comfortable going to absolute €0 reserve, but I get the impression a lot of people do this when it comes to buying a first home.

I think it would be mad to spend everything on the deposit, fees etc. I'd certainly want a few thousand for furnishing and a few thousand just to keep in savings to start building on again/have money for unforeseen things that may occur house related or more so otherwise.

SarahMollie

One thing no one seems to have picked up on, is that in her current budget the OP is factoring in money to service loans.

OP - how much debt are you servicing at the same time as trying to save? Also, what type of debt is it? Credit Card/Car Loan/Student debt?

You might well be better off clearing all debts before trying to save - this is 10x more true if your debt is of the credit card variety.

Sleepy

Michael D Not Higgins wrote: »

You're listing a figure 300-800 less than the other poster.

From the costs I've listed there's no holidays, no socialising, no costs but the essentials to exist and go to work. Not even presents for birthdays and Christmas can fit into that budget. The pocket money I listed would stretch to a takeaway and a couple of drinks with a trip to the cinema once a week. That's a sorry state of existence.

Oh I agree, I'm being less extreme but I see no reason the OP couldn't be saving more than 20% of their net income at the moment based on what they've posted to date.

Personally I wouldn't be planning holidays or buying expensive Christmas / Birthday presents while trying to save a mortgage deposit. At the moment, in order to save 25% of my income whilst renting in Dublin, myself and Mrs Sleepy aren't living that far from the "sorry state of existance" you describe. Take aways and trips to the cinema would be monthly, rather than weekly treats (or in our version, a take-away and a trip to the craft beer off-licence for the Saturday night after payday instead of the few cheap beers / bottles of wine from Lidl the rest of the month). I remember my Dad telling me that when they first bought a house in the early 80's my parents celebrated their first wedding anniversary with a take-away and a bottle of blue nun and that at the time, this was the height of extravagance for them!

During the boom we got quite accustomed to the idea of moving into a house with every room decorated and furnished to our tastes. Previous generations would have spent years in a house before getting them to half the standard and many of us seem to have forgotten that.

A rule of thumb is to save at least 20% of your net income, so 700/month in the OP's case. They're only saving 500 at the moment. They should aim for 700 in the short term and then go higher when they're able to evaluate their outgoings.

No one's going to be able to adjust overnight to a marked decrease in their spending. Saving €100/month on changing weekly shopping habits is doable, so is €100/month on limiting some luxury spending. Saving another €500 would take considerable work on each purchase in the household. That means fewer nights out, less money on holidays, switching providers for most of your insurance/utilities/etc., and other serious changes to spending behaviour.

When it's necessary, it's actually remarkably easy to adjust. You stick the savings in the savings account at payday and when you get to week 3 of the month and see you've feck all left and you stop spending on anything but the basics.

It's not fun. Not at all. But when you've the goal in sight and it's a case of sucking it up for a year or so, it's quite do-able in my experience.

SarahMollie

Thatcher Petite Railing wrote: »

I think it would be mad to spend everything on the deposit, fees etc. I'd certainly want a few thousand for furnishing and a few thousand just to keep in savings to start building on again/have money for unforeseen things that may occur house related or more so otherwise.

This is so true.

As a home owner, you're liable for anything that goes wrong in the property. You need an emergency fund as things can go wrong from day 1, for example your boiler might break straight away and you should always have a contingency fund set aside just in case.

SarahMollie

SarahMollie wrote: »

This is so true.

As a home owner, you're liable for anything that goes wrong in the property. You need an emergency fund as things can go wrong from day 1, for example your boiler might break straight away and you should always have a contingency fund set aside just in case.

As I was saying at the end of the post it's not even just stuff to do with the house. The rest of your life still goes on after buying the house. You could have a problem with your car or need to change it. You could end up being invited to two weddings in one month and also have to go to the dentist (just picking random stuff). Who knows so its good to have something to fall back on and not worry about having to rely on just that months wages.

Mrs OBumble

Logicost31 wrote: »

On a related note, when it comes to spending all the savings on a deposit/stamp duty/ solicitors etc, would people generally try to keep a "safety net" amount and how much? I've always tried to keep a couple of grand aside in case I lost my job or large unexpected expense, but this amount became the starting point for the house savings...I don't feel very comfortable going to absolute €0 reserve, but I get the impression a lot of people do this when it comes to buying a first home.

Yes. You should have a personal contingency fund of some-weeks-worth of living money: in this country, I think that around 12 weeks is reasonable, because it can take that long for welfare to come thru if you get sick and cannot work.

the groutch

first thing I'd be looking at is work travel arrangements
are you both driving?
is there cheaper alternatives, eg. public transport, carpooling, motorcycle/moped, cycling at a push?

jlm29

Also- how much of a mortgage do ye intend to need? You need to work out roughly how much your mortgage repayments would be, and showing an ability to pay that each month.

Azza89

Just my 2 cents but saving 50% of your net should be more than doable, it all depends on your attitude and how much you actually want to save up a deposit.

Its easy to cut back when you actually think about what you spend. Example: A chocolate bar with your roll at lunch totaling a fiver vs make your own lunch and getting a multipack thats on offer and having 1 a day. Total €2 - €3 total. Add that 2 euro saved up per day and its over 40 a month, maybe 400 a year when you take into account the days you do go and buy lunch.

It's lots of little things done well and adding them all up at the end.

athtrasna

MOD NOTE

Just a reminder that this is the accommodation and property forum. Saving for a mortgage is relevant but some of the posts stray wildly into off topic for this forum. OP I can move this to personal finance if you'd like to continue getting advice as you have been.

athtrasna

Thread closed at OP's request