Deconstructing 03 – Money talks

When it came to our finances, we were novices.

We got our original mortgage from BOI when we bought our home, not the easiest process as it was in 2014 but from anecdotal evidence, it was easier than it is now. I’ll never forget meeting BOI’s Life Assurance department and being sold a selection of packages that were going to add at least €100 per month onto our already high repayments. I know the broker was only doing his job but my husband and I were close to an all-out row with each other in front of the shellshocked man. I didn’t believe we needed these extras, my husband felt we did…. the poor broker became our mediator!

So before starting our renovation, to save more arguments in front of unsuspecting bankers we decided we needed to get a better grip on our finances in order to make better decisions. We asked each other how much we wanted to sacrifice for the renovation which I think, looking back, was a really important question. It helped to focus our plan, gave us our motivation and a clear vision of how we were going to get the house done. We knew we wanted to keep our lifestyle, our holidays, nights out for dinner and drinks with friends. Not that we ever over-indulged but these were non-negotiable. (Oh to have all those things back – though Covid has helped our savings!)

I then read books like Tony Robbins, Money Masters the Game, and listened to US podcaster, Dave Ramsey. AskPaul_Now on Instagram is a really useful account I go to now though he wasn’t around then.                                                                                                                                  

But I have to say, the most important move we made was meeting with a financial advisor. We met twice with Garry Quilligan, a brilliant man based in Killaloe. He gave us clear insight into savings versus loans versus investing, and what is priority. He also had us planning for the future separate to our home, an idea which was daunting at first.

After considering everything we learned from those mentioned above, we decided to put our heads down and save for a few years. Saving would give us time to build up a small pot and to get used to living in the house to get a sense of the space. We had the idea that we would then supplement this pot with a loan to renovate our house.

When it came to getting this loan we considered going back to BOI to release the funds from the equity now in the property but the hoops we were asked to jump through were too high. We also tried other notable Irish banking institutions but none incentivised us to use them. In fact, they actively made it difficult, a complaint I’ve heard from numerous people in similar positions – which made me believe, rightly or wrongly, that Irish banks are stepping further and further away from the residential market!

So what did we do?

We were advised to approach the Credit Union. And honestly, I can say it was an amazing experience, and it is rare to hear that said when it comes to borrowing money!

They were the most helpful, accommodating, proactive group of people I have ever dealt with. Yes, the interest rates are much higher on their loans, but you receive dividends back at the end of every year so for us it was definitely worth it.

We weighed it up – go with the banks and allow them more equity in our house while enduring an extremely difficult process to get there. Or work with the Credit Union, have a higher interest rate, with no equity gone from the house, and a much smoother, quicker and friendlier process.

We went with the Credit Union. But in doing so we decided that because the interest rate was higher we’d pay the loan off quicker. Obviously, we had to do the maths to ensure we could. We also decided not to go for the full amount we originally wanted, instead we went for what we thought we needed and were extremely frugal with our spend.

In order to keep track of our spending, my husband used an App called Construction Expense Manager, this was like a crutch to us, it really helped us to keep track of our spending. It’s scary how quickly the budget can get away from you if allowed. Also, the app helped us to plan ahead.

We made a decision to do as much work on our place as we could ourselves – my husband and father-in-law come from building backgrounds so that was a great help.

Though we are over the biggest hurdles, for example we no longer have a gaping hole in the side of our house and we can boil the kettle, there are areas that are not fully finished yet (but who wants a fully finished house right?!) We are now picking away at the bits and building up our finances again, to tackle the pieces we left aside.