Hi Belgiandude, great reply!
You should be able to increase your income with at least 1000 euro after taxes by:
- Switch companiesThe max for engineers in the company (big corporation) I used to work for was about 6500 euro before taxes. This does not include bonus or thirteenth month etc. (and yes, I was 30 year old when offered this. I did not take it.)
That's very impressive, but it represents the top few percent of the wage scale, though. In my sector, I'm very unlikely to get such an offer, though I realize I'm a little underpaid working for an SME. Do you mind sharing what field you are in?
- Go independentYou can start out as an independent contractor. The minimum you should ask is about 65 euro per hour. However, 90-120 euro per hour is not unheard of. You can optimize taxes being your own company.
As I specialize in mobile data, contracting work would be hard to get as a stable gig, only 4 customers in the country. I've spoken to quite a few who have gone that route, but they tend to just move to a different country when their contract inevitably doesn't get picked up after a few years.
- Ask for a better fringe benefits package. Do the meal vouchers, eco cheques, representation allowance, internet, etc. When I started out, my 3700 euro was about 2500 after tax. These benefits do that.
- Cheaper car Ask for the cheapest car they can lease and get the difference added to your salary. You really do not need a BMW 3/5 series if a 1 series or a toyota yaris will do. This adds 100-200 euro to your after tax salary.
I have pretty much the whole range of fringe benefits. Meal vouchers, ecocheques, internet, phone, car, pension plan, hospital plan, etc. My boss is a great guy, but he's quite frustrated with how much wages are taxed. As for my car, I completely agree with you, I went considerably under budget and got a small Volvo.
- Share your house, sell it, whatever. Belgium is not the place where a house is a good investment (despite what everybody says. Stock market is much more lucrative). My total housing expenses were around 400 euro (including electricity, garbage, etc.);because I shared my house... If I did AirBnb, it would have been cost neutral. If you are skeptical of this, convert your attic/basement to a studio and ensure that guests cannot go to your living quarters - add a door with separate keys - depends on the layout of your house though
Separate studio is not an option, but I feel like this is pretty much the best option in the short term to increase savings rate. Did you share with friends or just rent out some rooms? If it were just me, I wouldn't care, but it's a little intimidating settling strangers across the hall from my kid.
I do agree real estate is quite overvalued, but I get the impression the bubble isn't bursting for quite a while yet. For some reason, people keep building, even at silly prices. My plan is to get rid of it in the next 8 years, when my son is a little older or sooner if prices start going down.
For your reference, I lived really well in Brussels/Leuven and my yearly expenses were less than 10k/year. No kid though. [/list]
10k in those locations is impressive! If I could get my housing down to 400/month, I would be at about 11-12k, but I'm still far from that goal :)