Recently found my joy in cutting spending and become more frugal. Even "had the talk" with the wife (partially). Now, I am shocked about the insane salaries I see sometimes on this website -> I am amongst the top10% incomes in my country (which is one of the richest in the world), yet I don't even come close to some of the amounts I see. Nevertheless, I come by very easy every month.
Life situation: Married, wife works 3 days a week, I work fulltime. 2 kids (1yr old and 4yr old). Living in the Netherlands, 34 and 33 yrs old.
Gross salary: 96,000 EUR (me) & 38,500 EUR (DW, working part time already included), or 8,000 and 2800 per month. My wife also get's 8% holiday allowance per year and 7% end of year bonus.
Take home pay: 4525 EUR monthly for me, and 1825 EUR for my wife. This includes in her case all of our health insurance (equal to 250 EUR per month). The tax brackets here are slightly different than in USA...I pay 52% for all gross income above 68,000. My wife is at 40%-bracket.
Other income: tax return (mortgage interest deduction) 350 EUR per month
Childcare compensation: 500 EUR per month
Child allowance (or whatever I should call it in English): 133 EUR per month
Pension contribution me: 137 EUR "of my own" and 548.12 by employer
Pension contributions DW: 305.58 own contribution, 305.58 by her employer
Total net monthly income is thus 7.333 EUR
Expenses:
Mortgage = 782 EUR interest + 425 EUR principal
Studyloans: 162 EUR per month, all principal
Local taxes: 112 EUR
Internet: 51 EUR
Water: 20 EUR
Utilities: 0 EUR
Daycare (2days a week for our daughter, plus some after school for my son): 1,000 EUR
Groceries including diapers, soaps, detergents etc: 780 EUR
Car (full-loaded cost of depreciation, maintenance etc. against 40,000km per year): 664 EUR -> it's a brand new car, one of our less-fine moments but decided before I read MMM.
Car fuel: 150 EUR
Clothing: 200 EUR per month
Restaurants etc.: 100 EUR
Holiday (monthly put aside): 300 EUR
Misc. / one-offs: 300 EUR
Total spending including principal: 5,046 EUR
Total spending excluding principal: 4,459 EUR
Saving from income: 7333 - 4459 = 2,874 EUR & 2x 1700 EUR per year from yearly payments my wife gets)
Assets:
House: 500,000 EUR
Bank accounts: 15,000 EUR
Total: 515,000
(and obviously, 5 bicycles + a trailer for the bike, and one for the car)
Liabilities:
Mortgage: 410,000 EUR (200,000 against 2.38%, 210,000 against 2.17%)
Student loans: 11,000 EUR against 0.00% interest (but we need to pay it back unfortunately, but do it as slowly as possible).
Total net worth: 94,000 EUR excluding pensions.
Wrt the cars: I actually have 1 car, but it's a company car. So this one is for free, including unlimited kilometers. My wife is driving a new PHEV. We both do crazy long commutes, but combined there is one of us home almost every day as I work from home 2 days a week and she only works 3 days.
My son is going to elementary school next week (4yrs old), my 1yr old daughter is going to daycare 2 days a week. Deliberate choice, also for making friends and socializing and allowing me to get some extra work done.
We have no bill for electricity or gas, as our energy generation from the PV-installation is só big that we are net producers including the heating with gas.
In our Dutch system, paying off your mortgage is tax-free, but having liquid assets over 60,000 EUR is taxed. This meant until recently that a lot of our savings went straight into the mortgage. But thanks to the system of mortgage deduction, the effective tax rate is about 1% so there is no incentive to pay it off. We did some of the investments in making our house more energy efficient with a government-energy saving loan but paid it off completely this month.
Saving a big nest-egg however is a little bit problematic, as we'd need to pay a relative high amount of tax on it (1.2%).
For holidays, we spend 5,000 EUR per year on average. But in 2021 we will go on holiday by bicycle ;-).
Goal: we want to be FIREd at age 45 (end of 2029). The 'stash needs to be about 687,500 EUR to be relatively save to do it, as there are a lot of costs to be cut (day care for example, but also the groceries which can and will be halved next year). With our current savings, we'd end up at 37,888 per year of increased wealth, which partially (5k/yr) flows into the property.
We actually don't need to consider any income past 67, we live in The Netherlands. Our state-pension will be (assuming it keeps up with inflation) 20,296 EUR nett per year and our own pension fund will raise it to 80,000 per year or so (if we would continu to work until age 67 which we won't).
It's going to be a tough challenge...Anybody else in high-tax area's been able to do it? And sorry my friendly American friends: your taxes are close to 0, even in the highst tax brackets...