No Savings... Is this wrong

Pecker31

Hi so I am looking for some general advise.

I earn a wage of €1520.00 P/M NET. My OH earns slightly less approx €1320.00. Our rent is €650 P/M and between us we have NO savings. We are both 35 and really want to start saving for Kids/House/Life etc. I know we are a little older but we only met 3 years ago.

We have no kids and no major debt (I have a €7K CU loan which I pay weekly).

The problem is we are always broke, I am always in my overdraft and we are down to the penny the day before pay day

What would you need to be saving a week/month to even get a mortgage and how can we start. Thank you.

RedXIV

Hey OP,

Spending the guts of 2200 a month (after your Rent is taken out) is pretty high. Especially if you don't have kids at the moment.

I'd recommend taking a bit of time to enter in your spendings in a budget tool or even a spreadsheet. I use one called You Need a Budget.

There is almost always a few ways to shave off savings if you try, home made lunches, switching providers cancelling services you don't use any more.

Are you eating out a lot? That was one explanation I encountered for friends of mine who had the same claim

Pecker31

RedXIV wrote: »

Hey OP,

Spending the guts of 2200 a month (after your Rent is taken out) is pretty high. Especially if you don't have kids at the moment.

I'd recommend taking a bit of time to enter in your spendings in a budget tool or even a spreadsheet. I use one called You Need a Budget.

There is almost always a few ways to shave off savings if you try, home made lunches, switching providers cancelling services you don't use any more.

Are you eating out a lot? That was one explanation I encountered for friends of mine who had the same claim

Hi thanks for your reply ~ no we don't eat out a lot we did have a run of weddings, like four one after another so that really took its toll! I suppose I am worse thank him, stopping daily for takeaway coffee's and little bits, they will all add up. I am nearly afraid to look at my statement to see what I am spending. In my mind I don't think I am having luxuries but I am prob mistaken

howamidifferent

+ 1 for YNAB

fits

I always take the savings out and make all my payments at start of the month and work from there. Also I think three times before spending money on anything. coffee and 'little bits' really add up.

RedXIV

Pecker31 wrote: »

Hi thanks for your reply ~ no we don't eat out a lot we did have a run of weddings, like four one after another so that really took its toll! I suppose I am worse thank him, stopping daily for takeaway coffee's and little bits, they will all add up. I am nearly afraid to look at my statement to see what I am spending. In my mind I don't think I am having luxuries but I am prob mistaken

To be fair, 4 weddings will take their toll on anyone

Another good method for getting started on the savings is to simple remove some of the cash from your account once you get paid, Doesn't have to be a lot, but the point is to get used to living without it.

The takeaway coffee's will certainly add up, 3 quid for a coffee, 5 days a week is 15 a week, 60 a month, 720 a year If it's your treat to yourself, that fine, but see how many of these "treats" you have regularly and see what you could probably live without

snubbleste

Pecker31 wrote: »

Hi thanks for your reply ~ no we don't eat out a lot we did have a run of weddings, like four one after another so that really took its toll! ...

When's the funeral?

Yes, it is odd that you have no savings at the age of 35. You should have a minimum six months living expenses saved at a bare minimum. And you should be adding to that every week.

Hollister11

Pecker31 wrote: »

Hi so I am looking for some general advise.

I earn a wage of €1520.00 P/M NET. My OH earns slightly less approx €1320.00. Our rent is €650 P/M and between us we have NO savings. We are both 35 and really want to start saving for Kids/House/Life etc. I know we are a little older but we only met 3 years ago.

We have no kids and no major debt (I have a €7K CU loan which I pay weekly).

The problem is we are always broke, I am always in my overdraft and we are down to the penny the day before pay day

What would you need to be saving a week/month to even get a mortgage and how can we start. Thank you.

First thing you should do is download a budgeting app like Mint or something similar. Every Time up get paid, or pay a bill, enter it into the app. Even if it's just a coffee.
At least this way you can really see a breakdown of where your money is going.

You have 2840 a month.
-650 (rent)
-80 (internet and phones)
-150 (electric and gas)
-200 (food)
-150 (miscellaneous)

That's a total of 1230, so you should have around 1600 to play with.

Obviously you need to entertain yourself so TV deal, Take-Away/restaurant you might have a car. So lets say you have 1000 left over a month. If 75% of that is saved for the next 3 years you will have 27K saved.

Pecker31

Hollister11 wrote: »

First thing you should do is download a budgeting app like Mint or something similar. Every Time up get paid, or pay a bill, enter it into the app. Even if it's just a coffee.
At least this way you can really see a breakdown of where your money is going.

You have 2840 a month.
-650 (rent)
-80 (internet and phones)
-150 (electric and gas)
-200 (food)
-150 (miscellaneous)

That's a total of 1230, so you should have around 1600 to play with.

Obviously you need to entertain yourself so TV deal, Take-Away/restaurant you might have a car. So lets say you have 1000 left over a month. If 75% of that is saved for the next 3 years you will have 27K saved.

€200 a month on food?? We spend at least €450! That might be a start of where we are going wrong!

Hollister11

Pecker31 wrote: »

€200 a month on food?? We spend at least €450! That might be a start of where we are going wrong!

As a family of 5 we spend 600 a month.

Pecker31

Hollister11 wrote: »

As a family of 5 we spend 600 a month.

jesus! this is defo something to look at... and we shop in Lidl!

fits

snubbleste wrote: »

You should have a minimum six months living expenses saved at a bare minimum. And you should be adding to that every week.

It can take time to do that, and people can have various reasons for getting there later than others. Never too late to start though. I hope I am never without an emergency fund again. It really adds to feeling secure in life.

Hollister11

Pecker31 wrote: »

jesus! this is defo something to look at... and we shop in Lidl!

We do shop in Lidl.

This isn't only food, but includes toiletries, beer, cat/dog food, cleaning products.

It works out at 30 a week per person. Nothing too extravagant.

Spanish Eyes

It can be hard getting your head around budgeting, but if you want to save quickly, it has to be done!

Maybe if you work out how much each of you could realistically live on per week/month after all expenses and bills have been paid. Stick to it (not easy), and save the rest.

Sit down with pen and paper first or a spreadsheet.

Put in EVERYTHING, and that means EVERYTHING, tea/coffee/lunch/food shopping/magazines/hair/nails/clothes/shoes/entertainment/gym/sports and so on.

There are Statements of affairs on other websites that itemise all this stuff. The people who fill them out anonymously are often totally stunned at where their money is disappearing to!

It's worth the exercise anyway, and will get you both focused on the same thing.

Best of luck. At least you are realising that you CAN do something.

Pecker31

Spanish Eyes wrote: »

It can be hard getting your head around budgeting, but if you want to save quickly, it has to be done!

Maybe if you work out how much each of you could realistically live on per week/month after all expenses and bills have been paid. Stick to it (not easy), and save the rest.

Sit down with pen and paper first or a spreadsheet.

Put in EVERYTHING, and that means EVERYTHING, tea/coffee/lunch/food shopping/magazines/hair/nails/clothes/shoes/entertainment/gym/sports and so on.

There are Statements of affairs on other websites that itemise all this stuff. The people who fill them out anonymously are often totally stunned at where their money is disappearing to!

It's worth the exercise anyway, and will get you both focused on the same thing.

Best of luck. At least you are realising that you CAN do something.

Thanks for that. It's defiantly something we want to do so we will make a stab at it.

Do you know if there is someone we can go and talk to about creating a budget for us or is that just something you do yourself.

lau1247

Try consumerhelp website. They did a talk at our work place before which I find useful.

http://www.consumerhelp.ie/budget-planner

Always number 1

You mentioned you had a loan with your credit union, you could talk to them.
See if you can set up a budget account for your bills so you'll have a set amount going into it each week/month so there's no variation.
Also, would it be worth asking them to top up your loan to the value of your overdraft and once your overdraft is cleared cancel it? The interest on the extra loan will be a lot less than the interest on an overdraft and at least you're not starting on the wrong foot when you get paid

Spanish Eyes

Pecker31 wrote: »

Thanks for that. It's defiantly something we want to do so we will make a stab at it.

Do you know if there is someone we can go and talk to about creating a budget for us or is that just something you do yourself.

There is an interactive tool on the MABS website (money advice and budgeting service). This site is for people who want to budget as they are in debt OR feel they may be approaching being in debt.

Have a look and fill it in (VERY HONESTLY!!). This might be a start for you.

You can contact them by email or phone aswell. But I think it is really for people in difficult financial circumstances. But if they can help they will I'm sure.

https://www.mabs.ie/budgeting-tool/

Pecker31

Always number 1 wrote: »

You mentioned you had a loan with your credit union, you could talk to them.
See if you can set up a budget account for your bills so you'll have a set amount going into it each week/month so there's no variation.
Also, would it be worth asking them to top up your loan to the value of your overdraft and once your overdraft is cleared cancel it? The interest on the extra loan will be a lot less than the interest on an overdraft and at least you're not starting on the wrong foot when you get paid

Ya I always thought I should do that, now I will, its a small overdraft only €150 but still

howamidifferent

Pecker31 wrote: »

Thanks for that. It's defiantly something we want to do so we will make a stab at it.

Do you know if there is someone we can go and talk to about creating a budget for us or is that just something you do yourself.

This is not a refferal link which are not allowed but this will give you a free three month trial of the "You Need A Budget" online software who provide free online classed and youtube videos, blogs, forums etc...Even if you dont use the software its a great resource for learning how to budget.

http://purchase.youneedabudget.com

draiochtanois

This post has been deleted.

runawaybishop

Pecker31 wrote: »

€200 a month on food?? We spend at least €450! That might be a start of where we are going wrong!

A lot of people just go shopping and pick up what looks nice, rather than planning meals for the week. if i don't plan i'd easily spend 130 a week on food for 4 people, if i know exactly what is to be had for dinner every day i spend about 90.

Geuze

Pecker31 wrote: »

Hi so I am looking for some general advise.

I earn a wage of €1520.00 P/M NET. My OH earns slightly less approx €1320.00. Our rent is €650 P/M and between us we have NO savings. We are both 35 and really want to start saving for Kids/House/Life etc. I know we are a little older but we only met 3 years ago.

We have no kids and no major debt (I have a €7K CU loan which I pay weekly).

The problem is we are always broke, I am always in my overdraft and we are down to the penny the day before pay day

What would you need to be saving a week/month to even get a mortgage and how can we start. Thank you.

The other replies seem to focus on reducing spending and budgeting.

I would add that boosting your income would also help.

Average earnings in Ireland are 36k pa or 3k per month, gross.

That's 29k net, or 2,412 net pm.

Average earnings in industry are 45k pa.

witchgirl26

OP - I'd agree with the meal planning thing. It's halved our food shopping bill by just being aware. Ok sometimes we make changes to it but not to the extent we'd throw out any food bought.

I don't know the programs for doing budgets but when I initially moved out of home (& really had to budget properly for myself), I used an excel spreadsheet with all the basic categories on it. I did a few back months as well on it to give me a running start. It really made me think.

Do you bank with AIB by any chance? I've found their budget tracker thing that's linked to your accounts good for seeing where money is going & where savings can be made. I don't know if BOI or other banks have similar.

I used to give myself an allowance at the start of each week which was to cover lunches in work & any other bits like that. Kept in a separate purse so that I couldn't dip into anything else. It really helped with making me think about how much I was spending each day.

I would recommend setting up a savings account that you can access easily enough & put maybe €50 every 2 weeks in. I do that & just means come Christmas or weddings or the like, I have some funds for that & I don't have to deal with a large expense in the month. I also have a notice savings account for "proper" savings that I will only touch for major things - house repairs/new car.

Books4you

I'd also highly recommend ynab. I like you always had enough to cover bills and such just no matter what, I never ended up with savings.

A year and a half later and a good few thousand saved for New car/ emergency fund and money saved away for yearly things like car insurance, TV licence, car tax etc.

If you get stuck in with ynab believe me you will never look back.

If you are nervous about using an app, a pen and paper will do but the app will make you more invested in it I think.

Best of luck op!

fits

I don't like entering financial information into apps.

I guess my approach is rather haphazard, but it works ok for now. Might have to tighten things up next year though.

hawkwind23

Hey OP , i have a great little tip for ya!

my background was that i didnt save until i was over 40! i would be ashamed to say how much i earned up to then
anyways with the crash i lost out and had to take a job with a very modest income (around minimum wage) i saved then weirdly.

Anyways the tip is

save a little , i started off putting £20 a week away and in fairness it was nibbled at from time to time in the beginning but persevere and get in the habit. IT WORKS.
You get very protective of the little nest egg and like to help it grow
Its very rewarding when you get to milestones like 500/1000/5000.

What you spend it on is up to you , i blow mine on long holidays
maybe ive more to learn but YOLO and all that
GL

Michael D Not Higgins

OP just to let you know, since you mentioned a house as one of the targets, on your current salary you would only qualify for a mortgage of ~135k which you would need to have a deposit of at least 15k for a max house price of 150k. Depending on where you want to live, this could stretch from a shoebox to a house.

BetsyEllen

Online banking is excellent.

I'm with Perm TSB and can set up lots of online accounts and give them names - I have one for my upcoming holiday and one for car savings.

I set the holiday one up as a 40 day notice account so I couldn't just dip into it when I feel like it - it's a great way to 'hide' my money from myself!!
And as hawkwind23 said, it's VERY satisfying to see the money add up - you really do get a bit of a buzz from it and feel a sense of pride, which makes you not want to touch it anyway. It feels like an achievement to add to it each month.

I think the key really is to set up a standing order that comes out of your wages immediately - I have €200 go into my holiday fund straight away and €50 go into my car fund, so it's gone before I even see it.

Also, when you have a goal it 's handy too and you can work out exactly how much you need to save to achieve it.
For example, I know I would need €1000 for my holiday. So I set up savings of €200 for 5 months.

You need to work out how much you'll need for a deposit - it's been suggested above €15,000. How long do you want to save that over? Let's just say 3 years as a rough guide. That works out to be €416.66 per month, €208.33 each.
So now you have a figure, you need to work out how you'll save that.

~ How much will you save if you cut out your daily coffee?
~ If you have Sky could you cut out some of the extras you might have added to your package?
~ Could you change your mobile phone plan?
~ Have you looked at your Gas and Electricity prices lately? Flogas are the lowest for Gas and I think Energia for Electricity - call them and see their offers
~ If you're paying for Netflix could you cancel that and just stream films and series online?
~ Could you take turns every week to make lunch? You can cook a lot in bulk and freeze it

Just a few suggestions that could soon save you money.

Pecker31

Thanks Guys,

Gonna sit down tomorrow night and look at "ynab" and fill it out, hopefully we can come up with a three year plan!

Thanks for all the advise

AlmightyCushion

You really need to start tracking where your money is going. Only then will you know where you are wasting money and where you can cut back. I don't know what YNAB is like but I use money lover and it works for me. I don't bother with keeping track of my accounts using it, I just use it to keep track of purchases. You can set your own categories for purchases on it and then view spending by category. It only takes a few seconds to add a transaction to it as well which is nice. Once you start doing this you can come back to us with some hard numbers on where your spending is and we can recommend areas where you can cut back (if you haven't already identified them already).