New Dutch 25 YO and aiming for FI in 5 and ER(E) in 10 years

[train_writer]

After scrolling the forums, several sites and blogs and real life conversations (both encouraging and discouraging) i decided to join the forums to track my goal which i formulated ambiteously .

My realistic first goal is to always have enough FU-money (walk-away money) at hand to quit a non-likable job or just because I want to work on an idea/ book/ life goal. My definition of 'enough' walk-away money = 5 year's expenses or in my case 5 * 10100 = at least 50K.

Excuse me for the long post and thanks to all contributors of the forum for the inspiration

Present situation
- 25 yo with a 27 yo spouse
- Shared mortgage on a house we bought one year ago. Mortgage is 4 % on 150K, 3000 paid off.
- Personal savings and investments 32k. Student loan of 2500 against 0,8 %.
- Savings and investments spouse 7000. No more student loans.
- Work me: 2800 € per month of which i receive 2000 net. 40hour/week
- Work he: 2100 € per month of which he receives 1400 net. 30-50hour/week
- We currently both save 33% of our income automatically (always have) + what is left at the end of the month.
- We value our house not only for sleeping time, but also as a place to welcome guests, as our social network is geographically dispersed.
- We 'rent' a piece of land of 400m2 to grow fruits and vegetables and in general have fun. The rent is 80 € per year.

Goal/ current lack of time to spend on
- doing and learning crafts, being in nature, enjoying conversations, games, long walks and runs, learning programme languages and real life languages, painting (he), writing (me). We are both laid back, though we are on the ladder of very corporate jobs.
- Either a paid off mortgage or a next to 100-200 euro monthly pay on mortage.
- Also current lack of time to spend on renovation of the house, something we enjoy doing by ourselves.
- I won't mind working parttime every now and then during 'retirement' in order to finance unexpected events or maybe a child

Steps to be taken
- Extra payments to the mortgage in 2014 and again in 2019 *I figured I do want to enjoy the deductables on it while we work traditionally. Still have to decide on the right amount in 2014.
- Learning more on investments, CDs etc
- No more hotels, more camping and stay overs
- Tracking our budget more closely, though I know we spend roughly 1000 - 1800 euros per month for 2 persons, depending on holidays/ tax months etc. Maybe an automatic saving rate of 40 % per month?

A social security net for unemployment/ retirement/ basics is in place in the Netherlands, but we do not want to rely on that at all.

Do you have any tips to help me bring the saving rate to 50 % or should i just start tracking more closely?

[rube]

Welcome fellow Dutchie!

Tips:
-Track you spending closely for a while
-Read the ERE journals for inspiration and many more tips
-Start your own journal and maintain it with a minimum of 250 posts (the average when people become FI according Jacob )

Regarding the deductables of the morgage: even if you enjoy 42 or 51.5% deductable on the paid interest, it means you still pay net 48.5% or 58% of the interest.

[train_writer]

Thank you Rube! Also for the 250 posts heads up

You are totally right about the deductables, its just that I do want to have a spare fund -also for some renovation work- and do not know yet how big that should be. I was thinking of paying off 10 % of the mortgage next year up to 20 % when our earnings remain this level.

[GandK]

Welcome! It's so exciting to see young people here. So many of us wish we'd sorted out our financial priorities sooner. You'll find all kinds of tips and encouragement here.

I agree with rube's suggestions. In your case, tracking your spending should be the next step. Until you know exactly where your money is regularly going, it's hard to make a realistic spending plan or firm decisions about where to cut back.

[train_writer]

Income
Jobs (after taxes) 3000 - 4000 € per month + 200-280 tax deductables per month

Expenses
Mortgage 718 (Annuity. Currently 2/3 interest. 1/3 principal payoff)
Electricity/Gas 80 - we have a 'smart meter' tracking our exact usage per month
Water 9
Train commute 40 (average over a few months not paid by work)
Food/drinks 200
'Social outings 160 2 concerts, 2 plays, extra transit costs
tools 100 - we just moved and though we lend a lot of tools, we also bought some
Cat 10 - on food and litter
Charity (local) 20
Driving lessons 240
Health insurance 150
Total = 1627

The monthly expenses I want to reduce first thing
- the mortgage (as it is an annuity, this will become immediate lower)
- driving lessons are temporarily
- cheaper day-outs (more local)

Other things however
- holiday money is not included here (holiday allowance in May is around 2400 for us both and will do for our current plans). Work bonusses and side gigs -earning money from painting jobs- is also not included
- taking up a course or workshop/ sports again will likely come with some costs

[train_writer]

It seems from the responses on the blogs that many writers have quite high earnings from their jobs/ had fancy jobs and not much experience in involuntary unemployment. This does not discourage me - nor my spouse - but it made me think: do you actually start thinking about money when you start making some and free up your mind somehow to think deeper?

I know this is true for us to a certain extent: we started to really dig into 'bigger questions' once I started earning a bit more, my SO finished his studies, and I saved up my first 10k.
'Bigger questions' like
'how do we see life (and what are the differences/ mutual benefits)'
'what are our needs versus wants'
'where/how to live in order to have not only shorttime benefits, but medium term or maybe even longterm? (I am still not able to think longer ahead than 5 years but alas)'

Now we are figuring that questions out - and will be for the rest of our lives I guess - and now also connecting it to the money side of it all.

Expected 'unusual' expenses in January
- 3000 € principal payment to the mortgage. This immediately effects the monthly fee
- Loan to a company of 500 € (against an 8 % rate, paying back starts in April)
- Wood and metal/ isolation for our house (good deals on the Dutch equivalent of Craigslist). 900 €
- Carpenter who we pay for 2 hours is working for us a whole day in the house. In exchange, I will work with him on another project (while also learning some new skills, hopefully). 120 € + time

As we actually have a slightly higher income next month (bonus, more hours), we need to draw out 800 to 1000 € from the savings and can pay the rest from our income next month

[train_writer]

Ok, i have an issue with 'fear of poverty' whereas I dramatize risks (a quarrel at work? O, in 2 weeks --> unemployed, on the street, turning crazy, diving dumpsters) while forgetting my excellent creative survival instinct completely. Which in turn leads to apathetic episodes in my life.

Actually, I have been in the survival instinct for far too long (caring for mother and sister as well, never let my spouse pay for me though he is getting very annoyed by this atm) but this 'instinct' is not serving me well, its limiting me in my mind. I therefore vow to investigate which feelings and thoughts are currently leading to these extreme reflexes of mine. This stupid website actually helped me to only put that thought together, thanks! But it also means I might - as an experiment - use my FU money to quit my current job in the near future and see how that feels and what happens with one of my many plans.

Pfff, not a very smart €-decision that would be but who knows, I will debate this a bit.

[frommi]

I would say your expenses are already low for two persons in europe.
The "survival instinct" is something i got all my motivation off to change my life. I wouldn`t view that as a negative thing. Its good to think about what can happen and be prepared for the worst cases.

[Nomini]

Firstly, good to see other young Europeans. Welcome.

I don't think the "survival instinct" is a good thing, though, (sorry, frommi!) as what you are talking about seems to be an irrational fear of failure. As a fellow young person (I'm 22), I understand that our generation has a culture of insecurity, partly because we don't have the safety net of super-easy-to-get low-skilled jobs like our parents, so unemployment is a real risk. In fact, I frequently have similar thoughts to you about losing my job.

Whilst it's important to acknowledge the situation, however, it is easy to worry too much, and letting your imagination run too wild dimishes your quality of life. The only complete solution is not simply to change your circumstances (FI/ERE), but also to grapple with your internal issues to develop a resilient mentality. After all, ERE can go wrong, too, so you are at risk of simply swapping one worry for another. From your post, it seems like you recognise this, though, so good luck with working through it.

[train_writer]

Thanks Frommi and Nomini for your responses.

I think a bit of a survival instinct is good, but I agree with Nomini's point of the importance of building a resilient mentality/ partly personal and a generational issue (as every generation has its 'themes').

As for the expenses: the example was of November, a frugal month. When checking both my own and bf bank accounts, it seems the average is around 1950 euros.

On quitting or non-quitting my job. I have a contract ending in February -and I won't know untill February itself if it will be renewed or not- and a bit in a catch 22: I am not allowed to take days off if i happen to arrange a job interview (unless I know at least 3 weeks in advance). I already applied to a few companies and one called me and happened to be positive - and able to wait - but for others, in this crammed job market, this was not the case ("if you cannot come the day after tomorrow at 10:20am, I have 10 other candidates who may").

Will see though! For now, I should just learn to relax a bit and enjoy the weekend

[train_writer]

2 job opportunities, I have to decide next week:

- a very fancy corporate job but also, possibly stressfull, a longer train commuting time and not always up to my moral standards. However, it will give me a annual income of 60K and job security for at least a few years. It will also have some perks like (profound language) courses, international trips, though I know those can be quite exhausting

- a very unusual job, quite exciting, with no risk of losing money, but also no guarantee of earning much: it could turn out to be almost voluntary/ equivalent to 3 € an hour but it could also turn out to be a success (though not millionaire success, just equivalent to 40-50k per year). It could last for a few months or up to 2 years. It is in line with my personal beliefs, but also something my family would very much frown upon. Of course, I need to grow a spine for that anyways . It would give me the opportunity to be in a totally new working field.

--> Combining the 2, as the 2nd one can be done as a side gig, though than i have to compromise the first to 32 hours, which would be possible.

Pfff, decisions! While realizing i am in a very lucky position

[saving-10-years]

In reaching your decisions on the job will you take account of what you currently like doing with your spouse and to relax? It is a huge benefit that the things you like to do (grow your own food, renovate house, paint and write) take time not money. Which is great news for would-be ERE people. Not only is there a nice side benefit that they can create money, but also you won't need to save as much to keep doing this after you reach ER. But these are hobbies that need physical presence and time. So will you have enough to keep them ticking over or are you okay with taking a break from them for a time?

Good luck with the journey to ERE and the train writing.

[train_writer]

Goals 2014

- Start longterm investing ~ 200 euros per month (have the account set up and did my homework)
- Do some restoration work while not dipping into savings
- Design a great frugal vacaction plan for this year
- Restoration work on our plot of land
- Automatically putting 65 % of income into savings (both me and SO do this since October, but we dip into the savings because of the restoration work)
- Being happy and learn, share

[train_writer]

One of the expenses out of the way as I have my driving license since 1.5 week.
No, I won't buy a car, but I can use a car at my job + the benefits that come with it.

Weirdly, when using a business car, one also receives a daily allowance for lunch and other expenses, while I did not receive that when using transit! This means approximately 30 euros of extra net income per week and approximately 15 euros of savings on food per week