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Hey, I've never thought much about money, I've always had enough due to having my parents pay for everything and students loan, I've never had to worry about it before, but I've always been pretty frugal. Now that I've graduated and am taking financial responsibility for myself I feel pretty lost. I've become to understood that bank saving accounts are pretty much useless compared to investing, but I don't know much about it. A little about myself, I've just turned 26 and I graduated a bit under 4 months ago. I don't own anything that isn't debt. Annual income after taxes and mandatory goverment hand outs: 44 000 euros per year so approximately 3700 euros per month. My wife still has four years of university left and my job is located in a different city, I try to live as cheaply there and here, but rent etc end up costing around 1000 euros per month. My biggest income leaks are Living. 1000 euros per month Car (1.4l tdi toyota corolla, 4.1 liters per 100km) bought from my parents, no interest loan which i'm paying 500 euros per month away. Gas takes around 250 euros per month and insurance and taxes around 100 per month. total of 850 per month, should probably round this to 1000? Additional housing insurances gym membership etcetera 20 euros per month, cellphone and internet 25 euros per month combined maximum of 100 euros per month Food approximately 250 euros per month Bad luck case scenario set up (dishwasher breaks down etc) I'm putting away 200 euros per month up to 5k. Total of 2400 euros spent per month out of approximately 3700 euros per month which leaves 1300-1150 euros per month to invest and pay back debts. Car debt total (interest free) 8000 euros left out of 9000. Student debt 9000 euros after goverment handout 7000 euros pay back. Low interest, I'll pay this back next year when they start giving me the tax deductible portion. (1 year after graduation) I've never made a budget for myself so I don't know how accurate this'll be. I've had to buy a lot of big things after graduating such as a sofa ( 1.6k euros) and a dishwasher 300 euros, but I avoided taking any debt and paid them cash only so I didn't involve buyments as those because now we have everything we need. Where I work I live in the cheapest apartment possible and sleep on a carry-on mattress and travel lightly as possible, I change work apartments depending who'se renting out for cheapest. I already bid my cellphone, internet and insurances to the cheapest ones possible. I cook everything myself. I like to think I'm pretty frugal, but in a way I'm partly supporting my wife, because her income is less than a quarter of mine. So my questions are, am I atleast somewhat on the right path? Are there any gaping loopholes in my budget? And what would you recommend I do with this extra 1000 euros per month, I'm currently investing in stocks and long term bonds trying to split it as much as possible. Future bills, when my wife graduates and if she gets stable job we will probably buy a house, but her income should be larger by then. Currently we're not buying because we don't know which town we'll end up settling in.
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Sep 27, 2015 09:05
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How much is the flat in your "work city" costing on average per month? What is stopping you from getting a job closer to home? Also don't buy individual stocks, buy index funds. Sounds like you're in Germany, most of us here are Americans and don't know anything about what kinds of investment types/funds/etc you'll have access to.
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Sep 27, 2015 18:51
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My Rhythmic Crotch posted:How much is the flat in your "work city" costing on average per month? What is stopping you from getting a job closer to home?  I'm in Europe yeah. Most of my savings go into index funds, approximately 75% and a maximum of 25% into stocks. My index funds are mostly european, also global pharmaceutics and North American. (I just didn't know their name, index fund) so I referred to them as stocks. I'd love to work closer to home, but even the ones who are hiring tend to be such a long drive from home I'd still end up needing another place to stay at. This one pays pretty well even though I have to drive around one hundred or so miles extra per week and this jobs pretty secure as in I've been told I can continue working here for as long as I like. Flat in the work city right now is around 400 incl electricity and water euros per month, after my roommate moves it'll be around 500 though, I'm trying to get into student housing, but it's not for sure that I can. What I'm thinking about is how large of a pile of money should I save for rainy day before putting all the extra into stocks and index funds? I just graduated so even though I make fairly good money most of it is going straight away and should I pay off my low interest student loan as fast as possible after taking the goverment hand out ? ( Pays around 30% of it away if I pay it in certain amount of time, usually atleast minimum of 2 years) It has an interest rate of 1.2%, so I'm thinking instead of paying it away as fast as possible I should put money into funds and my rainyday back account?
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Sep 27, 2015 19:07
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Generally we say to try to have 6 months of living expenses saved up in your emergency fund, which in your case sounds like it would be about 12000 or so, based only on the one flat. The 6 month recommendation might be a little overkill for you since social benefits are so much better in Europe. I'd agree with the loan repayment not being priority #1, since the interest rate is so low. When I finished college, I did exactly that, built my e-fund and paid minimums on loan repayment until my e-fund was full, then quickly knocked out the loan.
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Sep 27, 2015 20:20
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