Husband and Wife Early 40s
The husband in this situation is self employed with average earnings of €90,000 p.a. The wife is an employee, earning a salary of €60,000 p.a. They have 2 young Children.
A very busy couple with very high personal expenditure and seemed to have very little family time due to work and long commute times. They were frustrated that they never seemed to have enough money to put aside for the future and it worried them. They had some Financial products such as life cover and Critical Illness and she had a number of small pensions from previous employments. He had made lump sum payments to a pension in the past as a way of saving on tax but with no clear understanding of the benefits except that it saved on his tax bill.This was all ad hoc and they had very little idea as to what they had and let alone why They also had a mortgage to age 70 and some short term loans and credit card debt. They had no will made as they couldn’t agree who should look after the kids if anything happened to both of them.
At our introductory meeting I explained how I worked and how I might be able to help them and after listening to them and getting an understanding of their situation we agreed to take things further.
The first step was to look at the bigger picture and to help both of them agree on what their short / medium and long term goals and priorities were. This was difficult because they had never really articulated these to each other before and they both had different views on certain priorities.They both had one thing in common though -they knew they had to get themselves organised. Once we had agreed and prioritised areas for action we looked at their finances. The cost of their lifestyle needed to be looked at in detail to see where the money was going and getting them to complete my Expenditure Questionnaire really helped. We then built a Financial Plan taking account of all of their Assets/Liabilities/Income and Expenditure and building in their goals and future plans. We were able to show them what changes needed to be made to ensure that they had the best outcomes for their family
We were able to identify where all of the net income was going and managed to eliminate 2,000 per month of unnecessary spending. With this extra 2,000 we put a plan in place to pay off the short term debt and credit cards. A lower rate was negotiated with their mortgage provider and we used the savings here to overpay the mortgage so that the term would reduce by 5 years and there are further plans to reduce the term further which is in line with their overall Financial Plan Page 2 of 3