Author Topic: Low income - questions about saving money and future goals.  (Read 2818 times)

Rosesss

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Low income - questions about saving money and future goals.
« on: September 04, 2016, 04:19:24 AM »
Hi everyone,

I have been activily reading the blog and also reading some on the forum for quite a while now and would love to get some advice on my personal financial situation. My situation is like this:
28 year old European woman who lives of about 1000 a month. Due to illness (starting from teenage years and therefor not able to work enough) and lack of education (had to give it up as I got sick. Have high school diploma but never able to finish a college education) my income is very limited. Here is an outline of my spending:

Mortgage: 230
Electric/gas: 110
Water (including various taxes): 25
Local taxes: 80
Health insurance: 93
Home/liability insurances: 17
Internet: 22,50
Maintenance: 9
Food/toiletries: 200
Gym: 15
Various healthcare costs: 50

Mortgage: very low, would never be able to rent for that kind of money. There is a spare bedroom but I live in an area with more than enough housing and no interest in rooms. No colleges or such around.

Electric/gas: Used to be 150, brought it down thru cheap insulation and lowering temperature during winter. Am actively trying to bring it down even more but as I already keep temperatures low in winter and try to do laundry as little as I can (some handwashing for clothes helps) and have LED bulbs and other electricity saving options I dont know how much lower I can bring it.

Taxes: set amounts.

Health insurance: is not optional where I live. I have the most basic version I could find and got a small discount for paying annually instead of monthly. I do this by setting the monthly amount in my savings and once a year pay them in full.

Home insurances: cheapest options I could find while still having the basic insurances. I have no extra insurance or insurances that I am not legally obligated to have.

Internet: cheapest I could find anywhere. I have no tv/cable or phone plan. Internet is my only cost.

Maintenance: monthly payment for maintenance on water heater/heating for the house. Needed for safety reasons and is the most affordable option.

Food/toiletries: trying to get this lower but so far having trouble even staying at this amount, let alone under it. Using frugality websites like these to help and do some meal planning and keeping to basic bulk items.

Gym: the cheapest subscription offered by my gym or any gym in the area. Great as a hobby, for social contacts and to improve my health. Really want to keep this for those reasons but should perhaps cancel due to costs.

Various healthcare costs: these vary per year but so far this year I spent around 600 that was not covered by my health insurance. So about 50 a month. There is another bill coming though of which I dont know the amount yet. Actual costs counted per month might be higher therefor.

Then there are the costs that happen every so often like needing some new clothes or shoes, small maintenance around the house, busfare to visit a family member or friend (only once in a while and when it is too far to go by bike) etc. These can vary ofcourse. I donít really buy clothes when I dont need them so I can go without buying them for a long time but when I need boots or a winter coat it can add up quickly.

So, this is the point where I apologize for such a long story and thank anyone who has made it this far and is willing to offer their advice. :D



Assuming these costs stay the same that leaves very little to none to spare each month. Luckily I have a small emergency fund of around 3000.


Right now I am hoping to save, by being more frugal, 75 to a 100 a month (and more whenever possible). But what would be the wisest thing to do with it? The options I came up with:

-Saving account (hardly any interest)
-Paying down extra on mortgage (will only be a small amount extra a year but mortgage is also small at 50.000)
-Invest this amount every month and use it for the long run. Setting it aside for years to help with mortgage or something down the line.
-Education. As I never finished any education past high school I would love nothing more than to get an education and hopefully when I get better get a fulltime job. However my illness prevends me from attending a regular school as it is now, meaning that I can only take courses offered though online sources which is way more expensive allowing me to only take one or two classes at the time. I have already done a couple of classes this way, it takes way too long to get any degree at this speed though and courses available where mostly art/philosophy related uni courses, not something that would help much in finding a job in the future.
-Education in some more practical skill instead of uni. Would not know what. Not very much available where I live and no knowledge of what is sought after and within my abilities/skillset.


Are there any options for being more frugal that I havenít thought of? Any tips on what best to do with the little money I can save? Basically I feel rather stuck at the moment. I have always been a very good student and working hard, when I got sick all plans derailed and quite a few years passed. Now that I am in my late twenties I don't know where to best go from here.
« Last Edit: September 04, 2016, 04:58:43 AM by Rosesss »

WerKater

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Re: Low income - questions about saving money and future goals.
« Reply #1 on: September 04, 2016, 04:36:39 AM »
Welcome to the forum! And congratulations for saving up the emergency fund and generally having your shit together!

Where exactly do you live? This has important implications for how you can invest and also in order to judge whether your expenses are reasonable. Most of them seem to be, except possibly for food/toiletries, but you already identified that.
Electric/Gas also seems a bit high to me but that's impossible to judge without knowing more about your location and living conditions.

Are your expenses in Ä?

Can you give some more details on your mortgage? What kind of property do you own, for how much was the mortgage originally, how much do you still owe, what is the interest rate?

Your expenses add up to 851, so if your income is 1000 per month, you should already have 150 over. Is that accurate?
« Last Edit: September 04, 2016, 04:44:44 AM by WerKater »

Rosesss

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Re: Low income - questions about saving money and future goals.
« Reply #2 on: September 04, 2016, 04:53:49 AM »
Hi there, thanks for your reply. We are neighbours (I am Dutch) ;)

It is correct that electric/gas is on the higher side but the house I live in is rather old. It is also at the end of a row of houses so no neighbours on the one side, this affects the heating bill. I have tried fixing this by adding insulation where my budget allowed. My heating is always on low in winter and I just wear warm clothes when  at home. I am trying to lower the costs further by minimizing the use of the washing machine (dont own a dryer) and using brooms over vacuum cleaners. I unplug all electronic devices when not in use.

Having 150 over is only in theory I'm afraid. In day to day life cost keep coming up, wether it's necessary clothing/shoes, dentist visits (needed several treatments recently) or other smaller costs. I have starting noting down every single purchase I make in a notebook. From large costs to the smallest to keep track of where my money is going and seeing where I can improve.

The costs are all in Euros.

Mrs. S

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Re: Low income - questions about saving money and future goals.
« Reply #3 on: September 04, 2016, 04:57:50 AM »
Have you looked into renting out the spare room through AirBnB? There would probably be some upfront costs for it but depending on your are you should be able to recoup those.

former player

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Re: Low income - questions about saving money and future goals.
« Reply #4 on: September 04, 2016, 05:33:42 AM »
Welcome, and you are doing pretty well considering the limitations you have: you have bought a house, you have no debt other than your mortgage, you live within your income and have an emergency fund.  That's better than a lot of the fully able-bodied people who find this forum.

You mention the possibility of your health improving: that, along with the consequent enhanced possibilities for education and work, would see the most improvement in your financial situation.  So don't penny pinch on investing in your future well-being.

Your expenses look pretty frugal to me.  The only thing you haven't mentioned that I can think of is hot-water heating: electric heating of water is expensive and might be what contributes to what seems to me a slightly high bill for a small house with one careful occupant.  You might be able to turn the water temperature down a bit, if for instance there is a thermostat on the heater (I find I can lower the water temperature a bit in summer without really noticing it, then turn it back up a bit when the cold sets in).  If you have a timer on the water heating, turn it on only when you need a lot of hot water (eg just to heat up for your regular bath/shower) and otherwise just heat what you need using a kettle.

havregryn

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Re: Low income - questions about saving money and future goals.
« Reply #5 on: September 04, 2016, 06:29:56 AM »
Educationwise I can suggest something. You're probably not aware that universities in Sweden offer a huge amount of courses that can be done entirely online.  And for EU citizens it is all 100% free.
What I can't say for sure is how hard/easy it is to build a degree using only English speaking courses, as most are after all in Swedish. But there are lots of them in English.

You can search here https://www.universityadmissions.se/intl/start
You can select to search for only distance courses without obligatory meetings (but it's also worth unchecking that and looking at every offered course as some obligatory meetings are actually online meetings) and it's not a problem to do any of this from quite a distance. We are now in Luxembourg and my husband and I take these courses all the time for fun. 

What I know for sure is that you can take without speaking Swedish are foreign languages. University of Dalarna offers quite extensive online courses in most major modern languages and some of them can be used to build a degree. I started taking a language this way but it was not feasible as I have a full time job and there were mandatory online seminars held at 2pm, eh. And even though my boss would had been fine with me taking it, the security features of our network were not and I couldn't connect to the thing from the office. So had to give it up but if you don't work, it could be something for you.
I see they have French, German, Italian, Spanish and Chinese with enough courses to grant you a degree if you take 120 or 180 points.

Pretty sure other Scandinavian countries offer such stuff as well but don't really know where to look. If you'd be interested, ask and google around.