Small and winding road to freedom

[Aspirant]

I think you are right.

Now is a bad time to buy anything big, and since the "rush years" will continue for the next 5 years I won't have much time to enjoy the place.

However, this might be the only chance to get that plot and cabin for me. It is next to a nice river and I would like to spend more time in the nature. Cabin should be pretty low maintenance since I can leave it cold for the winter. And I remember looking at that place as a teenager wishing I could get something like it...

I was looking just plots and the plan was to keep it as camping spot and build the cabin much later. At least I will check if I can get a loan and go inspect it in more detail.

[ertyu]

hope the purchase works out and brings you the joy you hope for

[Aspirant]

September expenses:
Got some extra bucks from military training. We live next to Russia, so it is prudent to do some military stuff every once in a while.
Gasoline was a bit more than usual because of a trip to home town with family. My brother was visiting from the States so it ws nice to spend a few days with him. Also went to see the cabin. It was not in the best of shapes, but the plot was nice, so maybe I will make an lowball offer when I get some questions answered first. When I was applying for the loan, I noticed that my NW has doubled since starting to keep this forum. I calculated a car to that which I would not normally do, but still a progress.

I have analysis paralysis with savings and investments. This downturn is increasing prices (inflation), increasing interest rates so making the use of leverage on properties less desireable and the stock market is getting hammered, so less investment returns. Putin also fucked up our energy markets, so next winter is going to be interesting with electricity and heating bills. I am pondering about selling stocks to repay one investment loan. This would give me more monthly cash flow and a bit less interest expenses. But should I just save up for a larger emergency fund and stash to put back into the market when things will start to pick up? I will need a bit more extra cash next year since kid number 2 is on its way. We are also looking at the option of winding the side gig down and let someone else worry about that stuff... Even though it has been a nice learning opportunity, it is still a bit more hassle that I need next year with the baby on the way etc. Any thoughts would be very much appreciated...



Income 3898,4
Joint account transfer -1200
Travel account transfer
Savings account transfer
Broker account transfer
Food -283,02
Lunches -161,72
Gasoline -188,38
Car
Health
Electricity
Phone
Hardware store
Shopping & sport -376,28 Sporting clothes for kid, gift for DW
Beer & restaurants -157,3 Lot of parties now that nobody cares about covid any more
Travel
Misc -25 Charity
Credit card payments -169,99
Monthly surplus 1336,71

[zbigi]

I am pondering about selling stocks to repay one investment loan. This would give me more monthly cash flow and a bit less interest expenses. But should I just save up for a larger emergency fund and stash to put back into the market when things will start to pick up?

Yeah, investing in stocks in Europe is super interesting (aka risky) right now. Who knows how deep the recession caused by sanctions will be, and how long it will take. The current predictions by major organisations (MFW etc.) say that it will be over by 2024. I wonder if their models are worth anything or is it just a futile excercise that makes way to many assumptions. I work in a German e-commerce startup now that has a broad overview of the market stats (we get data from many big players on the market), and we're seeing that sales of consumer electronics are down 20% YoY. That can't be good.

[Aspirant]

It will take a depression to even begin to start to fix this mess. Interest rates will go up until early-mid 2024. By then we should see some movement with inflation (hopefully downwards). The problem is that measuring inflation depends on highly volatile goods like energy and food, which can easily move +/-20% y-to-y. Those are currently the drivers because of the war in Ukraine.

Consumer electronics and consumer "discretionary" are a very good indicator in my opinion. They reflect the mood of the economy faster than inflation statistics.

[Vaikeasti]

Congrats on the pregnancy and PHD!
I'm so proud of you, aspiring and writing here. I like reading your journal.
How are things with the possible cabin?

[Aspirant]

Expenses 2022 average
Income 3637
Joint account transfer -1109
Travel account transfer
Savings account transfer -1328 Saved nicely at the beginning of the year, but fell off the wagon November and December
Broker account transfer
Food -362 This is acceptable level especially when you take in the account the recent hikes in food prices
Lunches -81
Gasoline -161
Car -99 Car insurances from joint account, so keeping the car costs more
Health -118
Electricity
Phone
Hardware store
Shopping & sport -483 The big items: fatbike, wading pants, Xmas presents
Beer & restaurants -179 Less beer than previous years
Travel -187
Misc -31
CC payments -228 This is high because holiday trip flights and hotel for June

Well, I have been slacking off with the journaling. Things have been quite busy, both good and bad.

During the end of the year I noticed that I have become totally exhausted. Not just mentally, but the body is starting to fail as well. Since I was expecting to extend my parenting duties for 18 years, I decided that I need to start to get in shape. That didn´t work out so well at the beginning, because I started too hard. I took pretty extensive medical check-ups and I got a burnout diagnosis. At least I am not in immediate danger of having a heart attack, so I´d rather deal with the burnout Now I just start moving in a more slow and relaxed manner. I bought a fatbike which is good since you get fresh air and the starting is easy because there is no extra effort since I can start from my yard instead of driving to the gym or scheduling with team sports. Also more slow walks outdoors.

I have started trying to create more headspace as well. I have been refusing posts in unneccessary committees or hobby groups. We decided to sell the side hustle. It was a good spot to do so and now (for reasons beyond my situation) I have to figure the accounting part of winding down the LLC. The customers get to keep their current contracts and we basically achieved what we set out to do. I am little sad about this because I would have provided means to do some meaningful activities in the cultural field and also learning about small business management.

The pregnancy went well and now we have a beautiful baby daughter (DD from now on?). She gets her name tomorrow and we are busy setting up the event. We get to see relatives and people are coming from US and Netherlands etc so nice, but a bit of a hassle
DW is staying at home on maternity leave now and I am taking 5 months off during the Fall. So more expenses and less income - Oh joy

@Vaikeasti The first cabin went out from the market. That was probably my luck since the interest rates have soared, and the financial situation has turned worse in other ways as well.

I have to analyze the expenses part in more detail when I have the time, but now I have to help with the arrangement hassles for the house and kids...

[Aspirant]

I would like to ask a few questions from the forumites.

First: How do you cope with inflation and higher interest rates? For the high savings rate people it is probably a non-issue. But for the schmucks like me, I think this is making everything a way more difficult. I am not getting the usual savings rates and I am not even sure if I can ever retire early. Also the 4 % rule is not holding up at the moment.

For the investment properties this is hitting pretty hard. They are still cash flow positive, but the taxes now make it a minus. I am trying to cope by selling some stocks and paid off one loan. Now I am redoubling my efforts on paying off the second smallest loan. This is a bit hard because I should save for the autumn when I am staying home with DD.

Secondly a new job opportunity popped up. It is C-level, but very small company. The pay would be more, so I could at least keep on dreaming about ERE. Well RE at least. This might mean that I have to give up on the parental leave. I have been working for 15 years straight, so a break might be in order to regain my health. Should I still go for it? I have been delaying gratification for years, and I am not sure if I still have it in me... Long term it would be good move, but the family situation is not optimal.

[sky]

We are cutting back on spending. My income level is still good, but if inflation continues for more than a few years, there could be problems. At the moment we are still able to cover expenses and save a little bit too. I have been thinking about taking a part time job, and when social security payments start, to invest them as a future inflation hedge.

[ertyu]

I'm thinking, if you're in this situation with respect to your investment properties, others are, too. Do your best to be one of those who manage to keep the properties, there will be survivorship benefits

[Aspirant]

Thank you for the answers.

Saving more and cutting costs is the obvious solution. Now the best think for the family finances would be that DW would get some meaningful work. The other would be scoring the higher paying job. I kind of like my current one, but the new one would keep the dreams of FI alive.

Ertyu: The propeerties are just apartments of which I own only half. So the loans are not that large. I am not in immediate risk of having to sell them. I paid off the smallest loan, so cash flow stays positive. I am being very moderate in raising rents so I hope that the tenants appreciate that and stay.

[Aspirant]

Well, it has been a busy year so far.
Baby was born in february, and most of the time has been just taking care of her. I had a burnout diagnosis and I have been trying to do some work on myself. There hasn´t been much time to take care of my own well-being until I started paternity leave.

In the beginning of August I stopped working and now I am a stay at home dad for 5 months. So far it has been pretty good. I get to do a lot of stroller walks, and I even managed to jog a few times. There are 2 lakes close to our home and I have a goal of jogging around both of those, while the weather is still manageable. You would think not having to work would free up a lot of time for my projects. The baby has been pretty time consuming, so not much chances of that so far I don´t know how the single parents manage all the stuff that needs to be done. But I am trying to do one useful thing and one fun thing per day. My mood has improved a lot and I am attributing this to less stress and more fresh air. My priorities for the autumn is 1. taking care of DD and 2. excercise more and get a lot fitter.

I think this is a good test for how would it feel like to be early retiree. So far not a problem to find stuff to do, since I have a backlog of housing stuff to do since I have been burned out for probably years and haven´t got the energy to do them. Yesterday I finished painting the fence for example. But I can´t really see a way forward to actually get to ERE. My expense levels are way too high and now my income is much lower than when I was working. But one good thing about the wellfare state is that I actually do have income which should kick in next month. That should take care of basic expenses and hopefully DW picks up the slack since she started to teach at the Uni this month. We are trying to split of the food expenses more equitably from now on, so that might help. Also the shopping part should be easier to cut, since I have been buying fishing gear like a madman. I have a good setup for pretty much any kind of trip to the wilderness, except for the winter months. And I could probably pull that off too with minor discomfort. I would need skis and a sled though... The fishing stuff should be categorized as a health expense, since I haven´t found a better way to recover from the burnout. I am trying to get back into fly tying, and that works as concentration excercise for me to focus my brain again.

And now DD is waking from the nap, so back to daddying

Expenses 1-7 2023 average
Joint account transfer -1 057
Travel account transfer
Savings account transfer -1 650 (No I am not actually doing this well, I loaded some money off the investments to pay off one loan, so not actual savings)
Broker account transfer
Food -475 Staying quite stable with one more mouth to feed and inflation. More veggies and less waste of food.
Lunches -64
Gasoline -160 This is a bit up because of my gas guzzler and few summer trips
Car -64
Health -278 Dental and eyeglasses rise the average. Normal month less than 100.
Electricity
Phone -79 Had to pay for my work phone during parental leave.
Hardware store -151
Shopping & sport -447 Mostly camping and fishing gear
Beer & restaurants -216
Travel -175
Misc -87
CC payments

[Aspirant]

August was the first month of paternity leave. I tried to start moving more, and the baby has proved to be excellent personal trainer. I get 20-30 km of stroller walks per week. And I tried jogging thet I have been avoiding for the past 4-5 years. When the weather gets worse, I will try to start going to the gym with the baby. Let´s see how that goes. I definitely need at least a little bit of strength training.

The income is still normal, because I got paid a little from work on top of parental leave allowance from the government. I think the allowance is sufficient for basic living expenses, but it doesn´t leave much room for saving. I try to cut off expenses during the autumn, but so far that hasn´t worked well. Already the buy nothing September is ruined, and I know I have one trip coming up on october, so not expecting huge cuts on expense side. I have been buying lots of outdoor stuff and the older kid needed new clothes for starting the school.

Hopefully the DW picks up more of the grocery bill, since now she is working and I am not. I have been paying more during past years since I had more income. But hopefully we could at least even out the grocery costs from now on.

Not working has been pleasant. I could get used to this not-really-ERE existence. There is so much little stuff to do around the house and I can´t imagine how anyone has the time to do all that after spending 40-50 hours per week working

August expenses
Income 3 488
Joint account transfer
Travel account transfer
Savings account transfer
Broker account transfer
Food -533
Lunches -32
Gasoline -307 Driving a lot more, one holiday trip with family and fishing trip
Car -11
Health -7
Electricity
Phone
Hardware store -8
Shopping & sport -310
Beer & restaurants -337 Some summer holiday expenses here as well
Travel
Misc -25
Credit card payments
1 918

[Aspirant]

September expenses

Things start to get muddled up a bit. I get the parental allowance to a different account so spending account dried out.
And I used the other debit card more than usual. Shopping got out of hand. Since I had time, and some stuff needed to be done, I did shopping for the kid´s school clothes and sports stuff that needed replacing. Also I got surfing some very neccessary watch auctions for watches I don´t really need Now I have a goal of buying a Breitling the first year my capital income exceeds the price of a Breitling. I already found a way to cheat on this, since winding down the side gig might actually accomplish this...

I have been buying sports and outdoors stuff like crazy. Now I got a cold weather jacket, that is somewhat justifiable because I spend a lot more time outside with the baby. Now Autumn starts to turn into the ugly wet and cold season between the nice autumn and proper winter. At 65 deg north, dressing up for the weather is advisable.

The parental leave is going pretty well. Baby is still alive and doing well. My well-being has gotten better and maybe I have losts a few pounds of weight as well.

Income 2490,37 Not working so this is parental allowance from Govt
Joint account transfer
Travel account transfer
Savings account transfer 2000 Had to top up the spending account from savings
Broker account transfer
Food -506,48
Lunches -45,3
Gasoline -90
Car -23
Health -60,33
Electricity
Phone
Hardware store
Shopping & sport -767,51 Outdoors jacket for me and sports/school clothes for kid
Beer & restaurants -102,98 Restaurants and coffee
Travel
Misc -25
Credit card payments

[Aspirant]

October
This style of following expenses is not working well at the moment. Parental allowance from gov´t is coming to another account and I have been using it much more. I just transferred 1000 € to this account, and it seems it is not enough.

October I had a fishing trip by myself. So more gasoline needed. I got surprised by bad weather, and it snowed during the night so I woke up with a bit too cold weather to fish. The forest was white and it was sleeting, so not much interest in wading into the river.

I had a friend´s bday party in Southern part of the country so little more partying expenses than usual

Groceries are still a bit high, but I am working on getting some compensation from DW since she is working and I am not. so far I have tracked mutual expensed with an app for 3 months but no luck with actually getting any compensation from her...

Income 1000
Joint account transfer
Travel account transfer
Savings account transfer
Broker account transfer
Food -542,33
Lunches
Gasoline -211,29
Car -10,15
Health
Electricity
Phone
Hardware store
Shopping & sport -357,07 Fishing trip and friend´s birthday
Beer & restaurants -193,6 friend´s birthday
Misc -25

-339,44

[mathiverse]

Nice update! It sounds like you have had a lot of fun recently. Also I was happy to read your positive update in the other thread!

[Aspirant]

Thanks Mathiverse,

The rest of the year didn´t go so well. After the friend´s bday party I was sick for a week and completely tired for the week after (so probably covid).
Then I broke my foot, so basically spent december on my couch playing Skyrim. I had to manage the baby as well, so not completely nerdy month

Expenses 2023 AVG
Joint account transfer -875 Slacked off during paternity leave
Travel account transfer
Savings account transfer -658 Savings were bad due to excessive shopping and not working for 5 months
Broker account transfer
Food -475 Costs are going up, and no luck with DW compensating any of it.
Lunches -64
Gasoline -160 I drive about 13000 km per year and the car is old gas guzzler.
Car -64 Year 2024 started with 500 € bill, so this averages out... And insurance and car tax go from
Health -171 I actually did something for my health in 2023
Electricity
Phone -17 This is not right, but the phone bill for me, DS and mom should be about 35 €/month
Hardware store -151 100 of this is in DEC and its rental apartment stuff so theoretically not my living cost
Shopping & sport -447 Yea, lots of shopping. May and June were fishing stuff. September was shopping for cold weather gear for me and
DS. Nov + Dec
Beer & restaurants -216 First part of the year went well. Summer is higher as planned, but end of the year was bad as well because I had
more takeout when I had the broken leg.
Travel -73 I should try to get the travel account working again. Bro got twins, so visiting relatives seems to be a priority for
next travels.
Misc -87
CC payments

Expenses -1 924

I think I will need to get better accounting. I have been using this excel because it provides the same way of dividing costs from 2020. However things have changed since I started this tracking. Now I have expensed going from joint account (insurance + car) that should be classified as expenses. Also electricity and phone have slipped away from the tracking. On the other hand we payed 21 k€ of loans and interest from the joint account. And the paying off the principal should be classified as savings.

[Aspirant]

I looked a bit at the previous years. I think I have been overspending on shopping and I can see definite rise in living costs and lifestyle inflation.

Food cost was 13 % higher than 2019-2022 average. At the same time I can see a definite decrease in quality of food. I am more mindful what I buy and we have less and less parties/grill nights. More money for less doesn´t spound like a good long term plan.

Hardware store was a big thing during the first years we moved in. We needed to fix stuff and improve the yard so I bought lots of tools and stuff. Now not so much, so it is a bit redundant expense line. Electricity should be added back to monthly expenses so I can adjust consumpion if neccessary. Now we have huge swings in the prices so it is worthwhile.

2022 shopping was mostly new fatbike and some camping gear. 2023 was camping + fishing and Xmas shopping which included PS5VR2 for DS.
Some justifications about the spending.
-My previous bikes are over 10 years old and I bought the fatbike used.
-Most of the fishing gear replaced stuff from 2008 - 2010.
-I expect to use some of the stuff for very long time. The hiking pack is war-proof so last for the rest of my life.
-The frivolous part of the spending included some Hardy reels (which should hold value pretty well)
So now I have pretty good gear for the next 10 years to come

Oh, and more importantly. The baby survived my caring for her. She started daycare with a home-type setup and group size of 2. She has adjusted well to the new situation. The lady taking care of her seems sane and quite reasonable. I think she wants more cuddles during the evening than before? She is active and knows how to stand already. She understands quite a few words and even says a few. So walking and talking should start during the Spring.

Now that we have both parents working, theoretically the financial equation of the family should improve dramatically. I am not keeping my hopes up on that front. If we can´t manage the current expenses with the missus, then I don´t think my excels will improve even though she started working. There will be more renovations on the house coming up, and that will be huge money sink.

Oh, and apparently I have gotten a small raise whan I was on leave

[delay]

Thanks for your blog!

Food cost was 13 % higher than 2019-2022 average. At the same time I can see a definite decrease in quality of food. I am more mindful what I buy and we have less and less parties/grill nights. More money for less doesn´t spound like a good long term plan.

It feels like food has become 50% more expensive since 2019. If you're spending just 13% more it seems logical you're getting less. More money for less is not my or your plan, but it's what reality throws at us

Everyone will have to rebalance their priorities with the new food costs.

[Aspirant]

I tried to figure out what is wrong with the finances. The divided accounts are maybe a bit confusing. Especially during last fall, where my gov´t check from paternity leave was paid to the savings account (and I started using more of it).

I tried to make a "honest" budget for this year. This has more room for savings, but it has its own flaws. For example lunches are deducted from the salary (with a small tax benefit). But I included them anyway as an item I could save a bit from. Making your own lunches would be cheaper, but I haven´t had the time or energy to do so. I am checking on the meal prep stuff, so we could have it easier on worknights. It is always a hassle to get everyone fed before going to various hobbies.

If I represent the expenses this way, I can get a better idea why my savings are not improving. This doesn´t include income or expenses from rentals.
Daycare is paid from mutual account. Anyway 300 €/month is a pretty good deal for full time daycare with meals included.

I put allocation for both kids. 100 €/month per kid sounds reasonable, but I expect a lot of variation on that. Sometimes we have to buy full set of clothes because DS growns a lot. The baby seems fine and missus has been doing a pretty good job of recycling baby clothes. She is about to start walking, so she will soon start to wear clothes out. DS has 3-4 hobbies which are starting to cost a bit more than before. Individually all of them are reasonable, but they add up.

Shopping and sport is the obvious place to save money I thought this would be an easy improvement, but I failed January spectaculary and "invested" in some more flyfishing gear Also both kids have birthdays on February so this month will not be much better either. I think I have pretty much everything I need for my hobbies, but the wants are piling up and something new comes up every month. Like this month I went to swimming training camp and I need to get some stuff for practicing swimming. I have made a decision that I am not skimping of sporty stuff because getting in a better shape is a priority for my physical and mental health. If I keep on sloughing like this I will not have enough energy to take care of my family. Currently I am not even sure if I survive until retirement

I added a bit more on misc section and travel section. After the baby year we are really in need of a decent vacation. Also bro got twins so we would like to visit US to see the babies Hardware store is just in case since there will be some renovations in the house, and little bit more yard work than 2023. I am hoping to produce a bit more veggies in the backyard.

After I started thinking the budget this way, I have quit Disney+ and Amazon Prime because they do not align with the "better life concept" I have been visualizing for myself. I haven´t used them much so they are a waste of money and I am better off spending time trying to get back to reading and fly tying. I also quit the gym membership because I didn´t have the time/energy to use it. Not really saving actual money on that, because it was mostly paid by sports vouchers from work. So that´s about 47 €/month shaved off from expenses already.

The non-ere option would be to increase income. I talked about doing something else, and that would increase gross income about 10 k per year.

Expenses

House maintenance fee 136
Water bill 23
House loan:
House loan repayment 302
House loan interest 200
Electricity 26
Phone 33 Me, DS, mom
Insurance 62
Gas 200
Car maintenance 83 Incl car tax
Daycare 148 DD full time daycare
Food 475 Feeds more than me
Lunches 273 If I eat out every workday.
Health 50
DS 100 Clothes, presents, toys hobbies
DD 100 Clothes, presents, toys hobbies
Hardware store 100
Shopping & sport 400
Beer & restaurants 200
Travel 150
Misc 100
3 161