Vaikeasti to ERE - Family Journal

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Vaikeasti to ERE - Family Journal

Post by Vaikeasti » Sat Sep 07, 2019 6:59 pm

I'm going to note down our journey towards (E)RE here. You are welcome come with us.

At the moment I feel like a potato in a ball pit; disarranged and confused.

My financial journey began when I started at my first real job in 2006. First I mostly ate all my income. I lived at my parents and had very modest fancies so I ended up still saving something. One day I mentioned at work that I still lived at my parents and a colleague of mine was quite displeasured to hear that. "You must be saving 1000 euros a month!" he shouted at me.
I am really grateful for his words because they got me thinking:
" No, I don't save that much. Why don't I save that much? Why should I save that much?"
I asked google and found personal finance blogs like I started saving something and thinking of what are my goals?

I kept on working, finished high school and started a new hobby where I met my future SO. I decided my first goal is to get married.
I guesstimated a budget for a reasonable wedding and opened a real savings account. Up to that point I had had two accounts: a typical everyday account and an emergency fund, that I also used for bigger purchases. (Kinda like a money buffer?)
Research says that the "honeymoon phase" during which you are not able to think critically of your partner lasts from two weeks to four years so after four years of dating and getting my wedding budget saved up I proposed we get married. And so we did. We are very reasonable but my budget was still a little low (4000e & 100 guests) but because our parents chipped in, we ended up not emptying the wedding account totally.
(Though We spent rest of it on honeymoon later.)
SO and I have had issues with our mental health that have also eaten some of my savings when we have not been able to work.

After we got married I moved out of my parents and we lived in a city rental apartment which was very affordable. Then I decided my second goal would be to buy a house in cash.
I opened an ASP account. It's a special state regulated account for young people with home buying dreams. When you save 10% of the apartments purchase price the bank loans you the rest with a lower-than-normal-margin and the state backs your loan. There are some other benefits too like the 1+2-4% interest paid on your saving for the first 6 years tax free. (I do not know if any other countries have something similar?)

I saved diligently the maximum amount of 1000 euros a month to that apartment account for many years. Life was life. I worked, saved and read I talked about ERE to my SO. We dreamed about ERE together. We dreamed about an off-the-grid house. SO changed careers. I kept saving to a house.

In 2015 we had had a kid and decided it was time to buy a home. We had some 50 000 euros saved in that apartment account. It was not enough for a house in our area. We took a loan of 100 000 euros and bought a fixer-upper apartment that we renovated mostly ourselves. We financed the renovations by saving nothing and using everything we could to pay for paint and plumbers. (In Finland only professional are allowed to do plumbing or electrical work in apartments. I understand that is not the case in USA? I wonder how is it elsewhere?)

I decided to switch careers too and got in to school to become an engineer. This made a dent in our income. Thankfully nothing serious because SOs new career was paying twice as much as before. I guess I was accustomed to the apathy of not saving anything during the renovations phase because we still weren't saving. Life was a bit busy. Worked part time jobs, studied and raised kids. (Yeah, we got another.)

Now we have two kids, more mental health issues than ever before and everything feels even more exhausting.
We feel like we have negative free time and it is starting to wear us out. I haven't found the time to play with FI excels in years (my favorite hobby in 2010-2015) and it is hard to even get the bills paid out on time.
Few weeks ago I found myself thinking: "We could enjoy and have some pleasures like a spa day, or a cruise or a trip over seas. We have money coming in. Why not spend on those?" (Scary right?) I told this to my SO, who just said that we wish to retire early. That short answer was like a search light to my face. I remembered why SO is so special to me and what is important in life (FI, ERE, environment etc.).

And so here I am. Writing in the middle of the night because I just have to get back on track. Just reading and the lovely journals was not enough for me. I had no-one to talk to. SOs more interested in off-grid living and day dreaming. I need to write this down. I realize I am so much a social animal that I even lose sight of my core values in order to belong.
This is my second first step towards ERE.

I plan on updating about once a week ( I don't think I can survive with more lack of sleep than that).
Some thoughts of what is to come:
Pondering on my/our goals. How, what and when?
Peeks at our allocations and savings plans for the family.
Brushing up on finance lingo and calculating my/our current net worth and savings rate etc.
Musings on Finnish taxation regulations and the student debt.
Small thoughts on the ethics of ERE with mental health issues and investing with your heart/idealism..
(Did I forget something interesting/important?)

(Note to self: remember to save drafts so you don't have to write things twice.)

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Re: Vaikeasti to ERE - Family Journal

Post by Zanka » Sun Sep 08, 2019 2:56 am

What an honest and open and nice first post, I can relate to being stuck and not having many ways forward.

So what I have taken from a couple of years of digging myself out of a big hole is that it is very important to give yourself a break. If you are always in stress you can not think clearly bc your body believe that you are hunted by a big lion. And when you are hunted by a big lion the only thing on your mind is to get as far away from it as fast as possible.

Even tho this is a great way of getting away from something it is a incredible bad way of getting to where you want, esp if that place is somewhere new and unknown to you.

Put some effort into creating some free time for you and your SO so you can relax and enjoy life together. Set up a babysitter once a week or something and just do something you enjoy doing, Cook together, take a walk etc etc, no need for spas or expensive things, relaxation is inside you, not outside:)

What do you think about that?

/ z

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Re: Vaikeasti to ERE - Family Journal

Post by Vaikeasti » Wed Sep 11, 2019 6:12 pm

@Zanka, hello and thank you for your thoughts! I believe you are right. We really need to realize there is no actual lion.

I will try to reconnect with my SO. I know that doesn't need to mean spending money because we've always been kind of frugal.
Feels weird that I been able to forget that. During these past years I have made myself so busy that I've started to throw money at problems which is really not typical of me. Before I was always trying to fix everything myself or trying to find out who could help me fix it. Mostly because I love learning new things but also because I hate spending money.
I got so used to the consumer culture that I did start thinking about rewarding myself/my family with consumer culture approved paid pleasures. I experienced the rush of exhilaration that spending money can give to a consumer. I'd like to think I can now understand a bit better how people end up addicted to something.
Pushing back the consumer culture now that it has gotten its feet through the door once, will certainly be a bigger struggle than without this experience.
I also have two friends that seem to be heavy consumerists influences on me. I need to really think about these relationships. I like them and their company naturally, but is spending time with them worth the risk of ending up spending money like them? (Thinking about it, most of our friend families have either one or zero full time workers in them, but these two are earning more than our household.)
I remember Jacob writing that it is easier to go from poor to wealthy than from middle-class to wealthy, and I think that applies to the mindset as well as the assets/liabilities ration.

Also I need to make space for breathing and relaxing just because it is healthy. And if I can't give myself free time now when I'm being a "productive citizen" how can I retire ever? This is a mental barrier I need to deal with. (I have a feeling that this was a topic of a post on I should look that up.)

And I really have to take the time to connect with my family and my own values. I feel there is no point in pushing forward with my goals if I'm leaving my family and my soul behind in the process.

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Re: Vaikeasti to ERE - Family Journal

Post by Frita » Wed Sep 11, 2019 7:49 pm

Having young children, working, and trying to save are exhausting. I remember bouncing between feeling as though I was running on a treadmill that kept speeding up and literally dropping from exhaustion. It’s okay to slow down and regroup.

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Re: Vaikeasti to ERE - Family Journal

Post by Vaikeasti » Mon Sep 16, 2019 4:37 am

@Frita, thank you for you comment! Could you elaborate a little on how you managed to slow down and regroup?

Going to therapy has given me some ideas, but I still have a long way to go to get rid of the idea that my worth is equal to my achievements.

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Financial status 9/2019

Post by Vaikeasti » Wed Sep 18, 2019 6:15 am

Current wealth (for both of us adults):
Liquid assets:
Cash: 13 700€
Funds: 8 300€
Shares: 8 500€
=30 500€

Non-liquid assets:
Unlisted shares: 2 200€
Debenture: 3 000€
Misc: 10 000€
Voluntary pension insurance: 8 700€/(can't be easily obtained before normal retirement age, so I won't count it towards ERE)
=15 200€

Other (I'll put these here this first time. Just to stab myself in the eye with the choices we've made):
Home: 160 000€/
Cabin: 70 000€/
Car: 1 000€/
= 231 000€

Mortage(home): -75 000€
Mortage(cabin): -36 000€
Student loan: -8 500€*
= -119 500€

Networth (money towards ERE):
30500€+15200€-119500€= -73 800€ (So far negative meaning still along way to save before being FI. Yay..)

Normal networth:
30500€+15200+8700€+231000€-119500€=151900€ (Seems like we could cash everything and buy a farm.)

Income per month (after tax):
Study grant: 320€
Student loan: 700€
Part-time job: 700€
Full time job: 2 500€ (base salary, usually more due to working nights or doing extra work)
Meeting remunerations: 35€ (calculated from yearly total)
Dividends: 35€ (calculated from yearly total)

In 2018 the average of monthly fees was 4 000€ (or 1000€/person/month). This year I've not tracked our spending (yet). I am fairly certain it's about the same because we haven't done any major changes. This would leave a theoretical 340€ per month as our savings. That is horrible. That's a savings rate of under 10% (or 5% per adult).
I had not confronted how bad the situation has gotten. To think that ten years and two kids ago we were living on one paycheck and saving the other one. And our income has risen since then. I feel like we have done all the basic mistakes in the book. Inflation of standards, taking out loans, getting kids before being financially free. I am starting to question if there is any hope for us. :roll:

Well I should get out of school and in to full time employment next summer. I really need to do a calculation of what will change then. I will lose all student benefits.
Rough guestimate:
Public transport costs will go up +50%
lunch costs will go up +0-25%
daycare costs will go up 400€ (since I'm a student we get free state daycare at the moment)
My salary will be around 2030-2300€ (after tax). So that is +1330-1600€ and -1400€ at least. Nice. I wish I could just be a student forever. I guess this is what some would call a "kannustinloukku" (welfare trap?).
I already hate the idea of working full time in an office. And the thought that our financial situation will be quite same but I will have less time with my offspring is a tad depressing. (I haven't been studying 9-5 every day...)

*The student loan will end up being -11 200€ and the state will pay 3 400€ of it if I finish school before the end of year 2020. So that brings it down to 7 800€. I haven't been a smart student and invested it all. But I still think of it as pretty good deal. The interest is 0 at the moment like all the other fees. Also the state will pay all the loan if for some reason I would be unemployed for a few years after school. That is highly unlikely since I already have a job in my new field. (Unless I have a bigger mental breakdown of course. You never can tell with brain chemistry...)

Current wealth (for both of the kids):
Cash: 2 000€
Bonds: 9 000€
Our plan is to save them 1 000€/year each. So far their savings are few years ahead of schedule. Savings are easily obtained by banking the child benefit that is automatically paid to all parents for having children. We think 18 000 on your 18th birthday should suffice. In Finland we still have mostly "free" universities and healthcare and such. (Also there is legal paperwork that needs to be done every year if a minor has more assets than that.)

It's weird looking at this and realizing that our kids financial situation is very good and their financial plan easy and straight forward. The contrast with our own plans is huge. We have so many opposing goals and haven't really been able to discuss and decide between them. I am hoping we can find something that would magically make all our goals align.
I must think about this and write about it in another entry.
Last edited by Vaikeasti on Wed Sep 18, 2019 7:28 am, edited 1 time in total.

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Re: Vaikeasti to ERE - Family Journal

Post by Bankai » Wed Sep 18, 2019 6:40 am

Your NW is not negative. You included your mortgages but not the value of your properties.

Also, (selling) the cabin seems like a good place to start simplifying things.

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Re: Vaikeasti to ERE - Family Journal

Post by Vaikeasti » Wed Sep 18, 2019 6:50 am

I just got a small pay rise at work!
I am so happy for this. I've been working in this new field and new company for 1,5 years now.
I asked for a raise when I had a talk with my boss about my contract. We decided to extend my temporary contract to cover the last year of my studies. (After that I need to figure out how much of my time I'm ready to sell out every week. At the moment I know I'm not mentally capable to work full time nor do I want to. Kids are small for such a short time and I wish to spend time with them too.)
I was already certain that I didn't get the raise because the contract was renewed without it, but it was just about my boss being too slow to make the changes in time. :D
This raise is really important for me because I haven't really gotten much feedback on my work performance. I'm still a cheap asset to the company because my salary is small compared to what I'm expecting when I graduate. And because I'm working just few days a week but still getting stuff done. But this would indicate I'm doing an okay enough work and can assume they really are planning on hiring me when I graduate.

Had a little talk about the future with my SO. At the moment he likes working and has a lot of his self-worth invested in his career (which is not healthy IMHO). He hopes to be able to slowdown and work just 3-4 days a week but not really retiring in the near future. Which is in a way good news for our shared finances. We had agreed before that he would be the one providing while I study and after I graduate I would bring in the money so he could study something new.
I am not sure if he's really happy working or just given up on life. But I will try to find out.

And of course I will try to look at our expenses to see where our money is running to. I suspect there is somethings that can be improved on. At least the not knowing part is stressing me quite a bit. I've tried budgets but realized these put me in such a mode that just want to buy everything. But I still think you can't control what you don't know. And while I'm building back my Scrooge McDuck brain I really need some concrete numbers.

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Re: Vaikeasti to ERE - Family Journal

Post by Vaikeasti » Wed Sep 18, 2019 7:21 am

@Bankai thanks for your input!

Maybe I need another name for that calculation? Our ERE worth? I''ll correct that and add a normal NW calculation.
I think it's not realistic to include the property values because there are no easy ways to extract money from them while still occupying them ourselves. But I guess it is important to keep the option of selling on the table.

Selling the cabin is not an easy option at the moment, because it is the only thing keeping my SO somewhat sane. (We just bought it last year to avoid us being the next family annihilation case.) We would need to buy another hideout in a forest if we sold this one. Or figure some other way for SO to have his own place and quiet. The downpayment wad mostly financed by unexpectedly being able to cash out his very bad deal of voluntary pension insurance, so my say on the matter was also limited.
He needs a place to do DIY stuff and to get away from people and I wasn't ready to move to the country side (besides I and the kids are also people). So we both compromised. SO gave up on moving to the countryside and having a lot of land and I gave up years of FI.
(By the way it was tragicomic to me how people were horrified when we talked about needing space and maybe two homes. But congratulating us when they heard we bought a cabin.)

But we have been discussing about selling the city home (apartment) and moving to a cheaper place. Or maybe even renting. I just found some good threads about rent vs buying here and I will check those out.
Last edited by Vaikeasti on Wed Sep 18, 2019 10:31 pm, edited 1 time in total.

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Goals in life

Post by Vaikeasti » Wed Sep 18, 2019 7:58 am

We really need to find out what our goals are. At the moment we have too many of them and they are not perfectly aligned.
Our long term dreams include:
Travel abroad once every 5 years (due this year, but was postponed to 2020)
Mortage free house with a lot of land
Permaculture garden
Financial independence
As self-sufficient as possible (food, electricity, repairs etc.)
Living close to family and friends (help with childcare and my social needs)
Not needing a car (living within walking/biking distance of everything essential)
Buying a Tesla (We want to get rid of fossil fuels in our life)
Being mentally healthy
Raising the kids to be good people

When I'm looking at our dreams I can see what are our dreams, what are mostly mine and what are mostly his. I also feel like the biggest obstacle in our path is me. If I could be mentally stable enough to live on the country side we could obtain almost all of those things. And if I would get a drivers licence we could choose our location so that it would still be possible to meet friends and family every week. The dreams of travel and a Tesla seem kind of the odd ones out there. :D

It seems I really must set my mental health a top priority because that seems to be the biggest obstacle in everything. (And here I thought I don't matter. :roll: )

In short term I have some goals too:
Graduate from school (should happen in 6/2020)
Work nearly full time (after 6/2020)
Save aggressively
Raise the kids to be good people
Spending time with the kids
Getting to know SO again
Get my brain in order
Get SOs brain in order
Renovate our bedroom
Declutter our home
Build a guest house to our cabin
Start growing potatoes and other edibles at our cabin

Yeah. I totally need a few millions to retire with these dreams. :lol:

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Re: Vaikeasti to ERE - Family Journal

Post by Zanka » Wed Sep 18, 2019 10:47 am

Nice goals. Wich ones are most important to you? One idea is to list all goals and then both of you seperately rank them from most important to least. Then compare and discuss on how to proceed.

And if you decide that FI is one of your top goals, the good thing is that almost all your goals (except maybe buying a tesla) could be fullfilled along the journey to FI.

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