How are we doing? (2ppl, 3.3k monthly take home pay)

[frugalinberlin]

Life Situation: Me (30), my husband (31) and our dog have been living very frugally for the last year and a half. We saved down a nice chunk for a down payment and we will be moving into our own apartment in Berlin Germany within the next 8 month (it is still under construction). However, with the move our living costs will go up about 300 € a month. The numbers show our expected budget after the move. We are pretty frugal but far far away from a 60% savings rate.

We work ordinary jobs at an entry level (2-3 years of experience). We don’t have debt (except the mortgage), but we also don’t have any larger investments.

Monthly take home pay: 3.311€ (After taxes and federal retirement investments)

Expected monthly expenses:

Investing (ETF): 300
Saving for annual extra payment on the house: 700
   
Fixed costs: 1170
including:
755 mortgage (half of it amortization, the other half interest)
250 running costs
60 maintenance fee
40 Internet
20 Cell phones
20 Cable
18 Cable Taxes
7 Netflix

Groceries plus toiletries: 300
Transportation: 130 (2 tickets for public transportation)
Combined buffer (meds, unexpected expenses, house insurance) 141

Dog (taxes, insurance, vet, food): 50
Expenses for home renovations/furniture: 70
Sinking fund vacation: 50

Fun money (includes eating out, charitable donations, gifts, gym and clothing for the both of us): 200
Miscellaneous me (online courses, vitamins, train tickets to visit family, replace minor electronic devices): 100
Miscellaneous husband: 100

Usually we have about 100-200€ leftover (mostly money from the buffer or miscellaneous category) that will go straight into our savings fort he extra-payment on the house.


Assets:

10k emergency fund
6k money set aside for upcoming expenses related to the move (kitchen, some upgrades and the move itself)
2k saved up for annual extra-payment on the house (we can pay an extra 11k each year. We will pay the first 11k in May 2019)
-224k mortgage
5k in ETFs
Federal retirement savings


Specific Question(s): How are we doing? Is there any way we can up our savings rate any more? What should be our next steps on our path to FI?


Thank you for taking the time reading this and giving advice. It is highly appreciated.

[KBCB]

I am still learning the ropes myself so I am unable to help much. However, I think it might help to break down the fun money & Miscellaneous categories further. 400€ might be able to be improved upon.

300€ grocery bill is impressive - teach me :)

[frugalinberlin]

Thank you KBurns,

you are totally right. I don't know, how I couldn't see this. I will examine the last budgets to see, where this money exactly went.

Groceries are pretty cheap in germany and we developed a mealplan where each weekly meal costs not more than 2€. More elaborate meals are saved for the weekends. We shop all of our staples at Aldi. I also use half of my Sunday to prepare all the meals until Wednesday mostly from scratch. I'm vegan, my husband is vegetarian, so we also save money on meat.

[ItsALongStory]

What is the interest rate on your mortgage? It may not make sense to pay 11k extra each year on the mortgage vs putting it into investments. Rates are usually a lot lower in Europe so it makes it even more of a no-brainer.

[Vetinarywannabe]

Hi Frugal in Berlin

This is my first post here (or anywhere else) so I am hardly in a position to comment.  Just a few observations from me:   Are you tracking your miscellaneous spending  Just last weekend, I came across a German site where it is possible to download an expenses tracking spreadsheet for free.  This might help get a grip on your Miscellaneous spending if you haven't got an expenses app or something similar.   

What are the vitamins for?  I believe there is little evidence for the efficacy of food supplements (unless e.g. you're a vegan who needs to supplement with B12).   Probably not worth worrying  if you're buying multi vits from Aldi or Rossmann  at 1.99 but I know someone who used to source supplements from a "healer" (Heilpraktiker) at a cost 30 Euros  or so rather than buy the same ingredient from the chemist at 10% of the price...  I think that stopped when the expensive ones didn't work and the chemist ones did.

Have you set any target dates? Well done on stock marking investing - German friends usually liken this to "gambling" but the future state pension provision in Germany looks pretty bleak unless you really mean "Pension" rather than "Rente" when you speak of "federal pension"?  If so, you probably don't have much to worry about but if not, have you made provision and thought about how you will increase your ETF contributions? 

[Paul der Krake]

So you're saving about 30%, more if you count your normal mortgage payments.

Either way you're doing fine. Your take home is alread low, so I assume you won't be getting much in the way of your pension, especially if you retire early.

You can probably cut some expenses left and right and scavenge a hundred or two, but if you want to accelerate your path (you don't have to), the best thing to do is going to be earning more.

[frugalinberlin]

Thanks everybody for all the helpful tipps and taking the time to look at our situation.

We are tracking our miscellaneous spending and half of the time we don't even spend most of it. But there is definitely room for improvement. I checked this years spreadsheets and there were definitively some unnecessary expenses. Thank you for pointing that out.

Our mortgage rate is in fact super low. We are paying 2,04% interest. But I want to make a dent in the first years of our mortgage to pay fewer interest overall. So at least in the first 3 years I'd like to put as much as possible towards the apartment. Also because I would love to own it as soon as possible :)

The vitamins are b12 supplements, I'm a long time vegan.

With "federal pension" I was talking about "Rente" which we will hopefully not rely on, but it is a nice bonus.
One of the ways I plan to up our ETF contibutions is to apply for higher paying jobs. But that is a very slow process because salaries in Berlin are on the lower end of the scale and since I'm still in a junior position the impact will show rather slowly.

Again thank you all! This is a great community