Jean tracks his spendings

[Jean]

Updated 29/12/2018

 

So, I wanted to put this in my battlelog but finances is a tricky topic that I don't want to impose on people. The main reason for it is that we all have a different starting point and that thinking about it too much can be a very destructive thing when we're low and need to focus on action. Plus, other people's trouble can seem petty when one is struggling to pay rent and buy food for the kids so I thought of using this section.

 

I'm putting it here because I want to stick with my tracking, and this is working for my battlelog for now. I'm still using a spreadsheet on the side, though.

 

Disclaimer: since I'm not a native speaker, I may not use the correct words for the right concept. I'll be thankful if you correct me when I do.

 

With that said, on to the meat of the topic:

 

Objectives

I want to trim down my yearly fixed expenses.

I want to trim down my monthly fixed expenses.

There's a roughly 60 CHF (~60$) a day that I spend on things without tracking it. I want to know where it goes.

Relative to the previous objective, I want to find what my phone calls are really costing me and what the most effective way of handling my professional and personal use of it would be.

I want to separate my professional and personal fuel expenses.

I want to explore creative ways to make more money.

I want to explore ways to save more money.

 

ROE

It's important for me to be socially and environmentally responsible with my money.

I need to keep a detached look on money and not be the guy who spoils everybody's fun at parties because the glasses of water at Orlando's are cheaper than at the Crazy Horse so why go to the later?

Even though I have done some tracking during the last years, there are some numbers that I don't know exactly. This must not stop me. I'll use my best possible guess whenever needed and correct it as data becomes available.

 

Reading help

For simplicity's sake, I'll consider that 1 CHF ~ 1 USD so you can read this in either currency. I'll adapt if the rates change significantly.

At the time of this writing, 1 CHF ~ 0.87 EUR ~ 0.77 GBP ~ 1.31CAD ~ 1.43 AUD.

Keep in mind that Switzerland has high salaries and a high cost of life when trying to figure out the numbers.

 

============================================================

That being laid down, let's take a look at my starting point:

-----------------------------------------------------------------------------------------------------------------------

 

Assets

500 m2 (~0.12 acres) of vineyard.

> Taxation value: 10,980.-

> Market value: 4,880.-

> Some of it has been bought recently. I've yet to get the bill of 1,000.- for its acquisition

 

401K: 9,570.-

Additional retirement savings: 990.-

{both can be used for buying a house, starting a business or retirement. A fixed income of 2,500.-/month is granted automatically by the age of 65 (well, it depends on different factors but for the sake of simplicity, we will say this is it)}.

 

Rent guarantee accounts: 5,850.-

 

Other savings: 0.-

 

Stocks and the like:

1 social share in my bank: 200.-

 

Life insurances and the like:

In case of work disability:

 > from my employer: 39,157.- / year (3,263.- / month)

 > additional insurance: 6,000.- / year (500.- / month)

 > an additional annuity of 12,000-30,000.- (can't be easily calculated) is granted by the state insurance (1,000.- to 2,500.- / month)

In case of death: 100,000.-

 

Debts

Student debt: 18,980.- 17,320.05 CHF

 > interest rate: 3,25%

 > minimal installment: 700.- / month

 

Debts toward family: 5,276.-

 > interest rate: 0%

 > minimal installment: 0.-  /month

 

Unpaid taxes: 5,876.90 CHF

 

Car Lease: 22,035.20 CHF

 > installment: 500.80 CHF/month

 

Incomes

Net monthly salary, before taxes : 6,132.- 6,193.-, paid 13 times a year (13th during December) ;

Professional participation to phone bills : 20.-/month

Additional income: grapes harvest : ~1,000.- / year 800.-/year

401K savings: 5,726.- / year

 

Taxes

On income: roughly 13,000.- / year (1,080.- / month)

On wealth: 0.-

 

Yearly bills (total = 4'247.- or 354.- / month 6,333.95 or 527.83 CHF/month)

Insurances:

Mandatory:

 > Home liability: 252.- 307.90 CHF

 > CASCO and Car liability: 700.- 1361.60 CHF

 > Car assistance: 93.-

 > Car taxes: 211.50 CHF

 > Highway tax: 40 CHF

Optional:

 > Mountain evacuation by helicopter: 35.-

 > Life insurance: 902.-

 > Insurance advisor: 290.-

 > Charity : 365.-

 

Rental costs:

Waste fee: 34.-

Electricity/Tap water/Sewers: 1,393.- 1,466.-

 

Vineyard related:

Mandatory:

 > Chemical treatments: 123.- 122.75 CHF

 > Biological treatments: 10.- 9.50 CHF

 > Water: 30.15 CHF

Optional:

 > Informative newsletter subscription: 20.-

 

Cards:

Debit card: 40.-

Credit card: 100.-

 

Leisures:

Mandatory:

 > TV tax: 365.-

Optional:

 > Main internet site maintenance: 193.- 192.65 CHF

 > Secondary internet site maintenance: 12.- 11.90 CHF

 > Grade association subscription: 50.-

 > Tai chi subscription: 700.-

 > Home internet: 588.-

 

Monthly bills (total = 3,087.- 2,960.65)

Rent: 1,400.-

Lease: 500.- 500.80 CHF

Debt repayment: 700.-

Internet: 46.- 68. 49.-

Phone: 50.-

Gifts to charity: 90.- 60.-

Insurances:

Mandatory:

 > Health insurance: 254.- 202.20 CHF

Optional:

 > Additional health insurance: 21.-

 > Legal insurance: 27.- 26.65 CHF

 

Average additional expenses : 60.- / day

 

Recap

Monthly income: 6,132.- 6,213.-

- Monthly taxes provision: 1,080.-

- Provisions for yearly bills: 354.- 531.83 CHF

- Monthly bills: 3,087.- 3'059.- 2,960.65 CHF

- Average monthly expenses: 1,826.-

 

Monthly balance: -215.- -232.96 -181.48 CHF

{Edit : adding an indicator because the yearly bills can be paid with the 13th salary :

Montly balance without yearly bills : 139.- 187.- 346.35 CHF

This one must NOT become negative}

 

Additional incomes:

 > 6,132.- 6,193.- in December (13th salary)

 > 1,000.- 800.- in December (vineyard)

 

Yearly balance (without 401K) : 3,832.- 4,015.25

 

============================================================

And so we are set. There's fat to cut both in monthly and yearly expenses and some heavy tracking to do. Accounting Ranger ready to go, next time, we'll tackle that all!

[Jean]

One week later, where are we:

• Health insurance is being renegociated (no new number available yet, though) ;
• Car insurances will probably be quite higher (I had underevaluated them) ;
• Credit card subscription is being cancelled (got another credit card without flat costs and I'm not using it enough for the interest rates to really matter - they're comparable).

 

Spendings

Period: 10/06 - 10/12

Total: 387.05 CHF

Spendings/day: 55.29 CHF

 

Washing/cleaning products: 20.65 CHF

Food: 103.10 CHF

 > of which from restaurant/premade: 14.5 CHF

Beverages: 3.20 CHF

Phone: 100.-

Fuel: 75.60 CHF

Dating sites subscriptions: 77.50 CHF

Gifts: 7.-

 

Let's see what we can easily cut:

• Professional fuel: (can be recovered but I've been counting it as an expense so far): 74.27 CHF
• Useless expenditures: dating sites, 77.50 CHF (shall not be renewed)

So, 151.77 CHF total or 21.68 CHF/day

 

Phone expenses

Personal phone use: 12.60 CHF

Professional phone use: 22.38 CHF

Total phone use: 34.98 CHF

[Thom Sparrow]

Definitely an important topic, and to often ignored. I'll be following,  and cheering you on!

[Jean]

Thanks! I find it important to review the state of my finances once in a while, although it'd not be particularly healthy to do it too often, as I feel I'd miss the joy of simply living life without asking myself too many questions, as I too often do.

 

I'm just out of an appointment with my life insurance adviser and... I don't know what to think of it. I used to think that we had built a somewhat fair society with a decent social net aimed at giving everybody somewhat of a shot at life but... man, are there unbelievable tools! And tools that you can unlock with those tools that then unlock a whole new brand of tools on their own!

 

I mean, Switzerland is a capitalist society, I knew it, but the game is so much rigged toward people with money (which I happen to somewhat be so, both yay! and WTF!?) that I have a hard time believing it. It's plain to see now that the laws were made by a bunch of smart people with a pack of money and ninja level deceiving skills. You wouldn't know it without looking into it, though, and who in their right mind would even guess such things exist?

 

I feel like Neo in front of the pills, like taxes are an illusion and that assets fuel debt that fuels assets fueling debt fueling assets in the Matrix.

 

Gonna need some time to digest that.

[TimovieMan]

But now that you know the tools exist, and that they could help you financially, I say "use them!".

Do what you can. The law lets you.

[Arkania]

Use them and tell us about them

[Jean]

Allright, I'm not ready for tools and tracking has been reduced to its bare minimum but I just had to rejoice publicly: Internet-only subscriptions are a thing back again around here! (The providers had given in to the "Internet, TV, Landline phone" bundle-only scam.) So, more speed for less money and no participation to the dumbing of society through support to TV. Can you sign me in, please? (Of course you can, you beautiful you!)

[Arkania]

It's the same here in Germany.

I called the provider because we didn't want TV anymore, only internet and he was like "uhm, but it's cheaper if you get internet + phone...?" so we have internet + telephone with three numbers and no phone

But for the tv stuff, we have the "GEZ"....

Quote: Contemporary and based on transparent rules: Education, news, culture, entertainment  or sport: Public service broadcasting offers a diversity of high-quality programmes on  television, on the radio, online and in media libraries. In general: one residence – one fee. For €17.50 per month, the licence fee covers all public service programmes on all distributive channels.

 

Yeah. Sure. This is MANDATORY!

[Jean]

37 minutes ago, Arkania said:

But for the tv stuff, we have the "GEZ"....

Quote: Contemporary and based on transparent rules: Education, news, culture, entertainment  or sport: Public service broadcasting offers a diversity of high-quality programmes on  television, on the radio, online and in media libraries. In general: one residence – one fee. For €17.50 per month, the licence fee covers all public service programmes on all distributive channels.

 

Yeah. Sure. This is MANDATORY!

 

Same here, it'll be mandatory starting next year, but that covers the production of Swiss programs (some of which are pretty educative), not their broadcasting so, while you have to pay for their making, you can now choose not to pay for having them on a TV-screen (TV-screens are quickly becoming a thing of the past too, by the way. One of the arguments for the mandatory TV-fee was that people are watching it on the internet and have access to it even without a TV - I've never understood what was so complicated about requiring a password to access it but the Big Brains up there seem to think it's not even worth  considering... -).

 

So, now, I can (must) participate to the creation of educational shows (which I can get behind) but can still say "TV is shit and I want none of it" without paying twice the price for half the service. I call that a win.

[Jean]

Made a new count for next year. Yearly and Monthly bills are skyrocketing, yet, everything seems mandatory. I could cut fat in gifts to charities but I do not wish to get there.

 

Areas where I have some sort of control that I should take of are:

• Phone bills (professional bills are skyrocketting, I just need to use my unlimited subscription for them but it's on the smartphone which I seldom have with me. I'll work on it during the holidays);
• Gas: I need to register my expenses regularly so as to get repayment from my work (I use to consider it too much of a bother and not do it, which is stupid so none of that anymore).

Updating the first post. It's scary.

[muadib]

Hello Jean,

 

 I love your post. Many people fail to realize how important finances are.  If you need some advice or encouragement let me know.  

 

I went thru some financial hard time now I am ROCK`IN.  They announced layoffs at my work and it really did not affect me because I have CASH in the bank. 

 

Let me know if I can help!

 

Mike 

[Jean]

Thanks! I'm mostly set for now (though putting money aside is sloooooow!) but I'll ring in if I need anything.

 

My main problem nowadays is that I'd want to overpower my debt installments, my maximal tax-deductible retirement savings AND start investing in stocks right now but repaying the debt will take two years, maxing retirement savings seems achievable if I focus on it but makes it impossible to start investing in stocks before 4 years (2 for the debt repayment and 2 for putting aside enough money to make it worth investing). Of course, I could start some small monthly ETF installments right now (actually not right now because I've got to rebuild some sort of safety net first, I've dropped pretty low on that front) but it'd put reaching my maximal retirements savings at risk (I'll be far from reaching it this year since some tax repayments are later than I'd expected them).

 

So, in short: how do you put up with having to wait for this long (4 years) before actually working on your real target?

[muadib]

The key is taking baby steps.  If you concentrate all your efforts on one thing you can get it done.  Remember building wealth is a marathon and not a sprint.  

 

Also,  you have to build a strong financial foundation before you invest.  It took me years to get to when I am but NOW I am wiser with money plus if you have no payments you can invest HUGE chunks of money at a time.   My emergency fund is 10 of thousands of dollars!  That money protects my family and as Warren Buffett said.."large cash reserves is like a moat that protects the castle".

 

Jean, I used to be so broke I had to roll pennies for gas. Now I am doing very well!   Here is a link to the guy I listen to.  He changed my life!

 

Some people disagree with Dave Ramsey but we don't take financial advice from broke people. 

 

 

[Jean]

I like Dave Ramsey's approach though I'm disagreeing with him here: having it already figured out doesn't mean we'd already be there, it means we're on our way. On the slow and steady ways that build wealth one year at a time. If figuring out your strategy meant you'd be rich the morning after, there'd be no sense in compounding interest (because gain would be instant so there'd be no point in accruing it even further). Taking the best of other people's plans and then building our own is the core of the process: oftentimes, success relies on not acting like everybody else (so much more so in stocks than everywhere else). I don't know, he sounds very salesmanlike to me here (though I've read some of his writings and agreed more than once).

 

44 minutes ago, muadib said:

but we don't take financial advice from broke people. 

 

We shouldn't take too much financial advice from most rich people either. Who was it who said that we shouldn't take advice from someone who doesn't have skin in the game? The thing about evaluating people through their successes is that when you're in the game, luck happens and people with a sound strategy get taken down while people with a poor strategy may succeed (not counting inherited money, of course).

 

Baby steps and slow and steady are no different: it is a very good path to work toward a given objective and it limits the risks you are taking but you may very well never take off either. If you can't build enough momentum with the resources you can gather, you're doomed whatever the path you're taking and it may not be through faults of your own.

[Elastigirl]

2 hours ago, Jean said:

Thanks! I'm mostly set for now (though putting money aside is sloooooow!) but I'll ring in if I need anything.

 

My main problem nowadays is that I'd want to overpower my debt installments, my maximal tax-deductible retirement savings AND start investing in stocks right now but repaying the debt will take two years, maxing retirement savings seems achievable if I focus on it but makes it impossible to start investing in stocks before 4 years (2 for the debt repayment and 2 for putting aside enough money to make it worth investing). Of course, I could start some small monthly ETF installments right now (actually not right now because I've got to rebuild some sort of safety net first, I've dropped pretty low on that front) but it'd put reaching my maximal retirements savings at risk (I'll be far from reaching it this year since some tax repayments are later than I'd expected them).

 

So, in short: how do you put up with having to wait for this long (4 years) before actually working on your real target?

For me and my husband, having to wait was actually a big incentive. When we started the debt repayment hubby was almost 50, so not putting more into retirement seemed scary.  I think our original time line was 3 years, but we actually paid off all debt (except the house) in 2 years. Seeing that number go down was a big incentive, and the closer you get, the more incentive you have. Also, I was surprised at how much bonus money that we didn't count on came in. Anytime we got more extra money say from a work bonus, we shoved it right into the debt. Now we have more than made up for that slow time of retirement money, and have  a good amount in stocks. We are also going to pay off our house in under a year.

[Arkania]

Do you speak (or can read) german? There is "Madame Moneypenny" who blogs a lot about ETFs and that stuff (mostly for women because of feminism and women still don't have the "guts" to invest etc) but I think she explains it really good. If you can read german I can send you the ebook.

She says: 1. Debts, 2. safety net, after that investing and you can start with just 25€/month.

[Jean]

Ich kann mal probieren, Linguee wird aber mein Freund sein. Zehn Jahren Deutsch zu lernen zur Schule sind nicht als effektiv als man konnte es glauben (Welschen haben es in den Blut, Deutsch nicht erfolgreich lernen zu konnen).

 

I'm a big fan of Mr. Money Mustache, myself. I suspect he shares some views with Mrs Moneypenny though they're looking at it from the opposite side of the gender lens. I'd gladly take the ebook, provided it's not something she sells in which case, I'd rather read her blog, see if I like it and buy the e-book as a thanks a bit later.

 

I'm personally going for: 1. minimal safety net, 2. safe sturdy savings account with decent returns (it's not meant to serve as a safety net, though it could be used as such, but more as an opportunity fund with which I can weigh in when there's cheap good assets to get), 3. Stocks (balanced with bonds, on several markets, ...), 4. Debts whenever it gets repaid with the minimal installment.

 

The thing is the minimal installment is pretty hefty, so it will get the debt paid in time and the interests are not that high when taxes have been deducted (it's tax deductible) that I couldn't beat it with some good investment of my own. My problem with small monthly ETFs investments is that if it's meant to amount to something interesting in time, I want to trust the bank holding it for me and that makes going for those with cheap fees somewhat difficult in my mind. I mean, what's the point of building a fortune if it's going away whenever the people you've put it with go bankrupt ?

 

So, I'm more planning toward two seperate banks in separate lands with probably more fees than I could get elsewhere but which I'll trust with more conventional stock (and a buy and keep strategy). But the way things are going, I still have plenty of time to think about it.

[Arkania]

On 12/11/2018 at 10:16 PM, Jean said:

not something she sells

She does

Mr. Money Mustache is nice to. And maybe you know www.der-privatier.com

Oh and I suggest deepl.com for translations

Regarding ETFs you will ike Mdme Moneypenny,  she talks about passive ETFs and "scatter" your capital in World ETFs. E.g. MSCI World with your own depot and not a bank/a bankier etc holding it for you.

[Jean]

Wait! Wait! Wait...

 

6 minutes ago, Arkania said:

with your own depot

 

These things still exist? Don't you still need a courtier to access the field? I'm... I need a coffee and to jump on her writings.

[Arkania]

e.g. -> https://www.onvista-bank.de/top-konditionen.html

 

https://madamemoneypenny.de/passives-einkommen-podcast/

https://der-finanzfisch.de/kann-man-von-passivem-einkommen-aus-etfs-leben/

 

 

[Jean]

 

On 12/13/2018 at 5:55 PM, Arkania said:

e.g. -> https://www.onvista-bank.de/top-konditionen.html

 

 

Thanks! I'm still searching for good opportunities with a Swiss bank. Online banks have a big 100 CHF/year tax report fee which I'm still trying to figure if I need or not (and if I need it, it makes it useless to invest with too small a capital to beat it). Traditional banks have huge fees on transactions making it impractical to go with small monthly purchases unless you buy the funds specific to this bank which are mostly actively managed with hefty fees for little gain. So, I'm trying to build some starting capital to beat the base costs and it's going to take some time (I've got a good 5000 CHF/year model in mind but that'd mean renouncing to invest in tax deductible retirement specific vehicles, so I'm on the fence regarding it.

 

 

On 12/13/2018 at 5:55 PM, Arkania said:

https://madamemoneypenny.de/passives-einkommen-podcast/

https://der-finanzfisch.de/kann-man-von-passivem-einkommen-aus-etfs-leben/

 

Thanks, good listening and read, though I need to improve my german.

 

 

On the plus note, I now have a plan for 2019! It's not as agressive as I'd like (not having the money to be agressive is what I dislike the most in my situation, hence the opportunity fund I'm building) but it'll carry me through the year. The biggest negative point is that, since my 13th salary tends to come so late in the month, I don't think I'll be able to put it on a retirement account in full this year either, which makes me question the wisdom of not scraping the additional retirement account totally and just going for normal investment until I reach enough passive income to retire on that forever.

 

Updated 29.12.2018

 

Basic guidelines are:

I had to cut out on tax payments: I currently have a hefty tax debt (see first post), I'll repay some of it every year.

Charity: max 1% of total income, after correction for tax deductions (1.25% total) so I've reduced it to match these numbers. It'll grow up again as my income increases.

General spendings: mean of 40 CHF/day over a month so I'll have to bill my employer back for my business expenses and practice some frugality. There's room for more savings there so I'll check on it regularly to see how it goes.

Savings: 33.35 CHF/week (I went on 100 CHF/monthy and divided it by three weeks instead of four to make it weekly (more movement to track so more entertaining for me) and push it a little higher).

Life insurance: no, thanks!

Order of savings/debt repayments:

1. Savings until it reaches 1,000 CHF;
2. Retirement until it maxes out at 6,768 CHF/year;
3. Student loan repayment;
4. Car loan repayment;
5. Putting aside what's needed for the family debt + decent safety found;
6. Investments.

 

That being said, here we go (updated):

The student loan is to be read on the axis on the right, everything else on the left. Beware the different scales (to put more of a focus on the interesting part of the graph).

 

 

Let's see if I can make it happen.

[Jean]

Thinking about it, I think I'll be going Dave Ramsey on this debt, meaning I'll be throwing anything I can save at it once I'll have reached 1000 CHF in savings. There's 4 months to gain with the basic plan but I may be able to scrape some more things to make it a bit faster too.

[Jean]

Just a global view on the year:

 

Starting conditions

• Checking account: 7,309.85 CHF (necessary to allow the big taxes pay in August);
• Savings: 333.50 CHF;
• Provisions: 0.-;
• Student loan: 17,320.05 CHF;
• Lease:
  • Total: 24,038.40 CHF;
  • Paid: 2,003.20 CHF;
  • To go: 22,035.20 CHF;
• 2017-18 unpaid taxes: 5,876.90 CHF (that's the big August fall, it'll probably happen later, though, but better safe than sorry);
• Debt toward family: 5,276.-

 

Expected expenses (including savings and provisions)

• Januray: 8,440.95 CHF;
• February: 6,381.30 CHF;
• March: 6,345.35 CHF;
• April: 6,370 CHF;
• May: 6,345.35 CHF;
• June: 6,502.25 CHF;
• July: 6,312.05 CHF;
• August: 6.477.40 CHF;
• September: 5,570.75 CHF;
• October: 5,710.40 CHF;
• November: 4,621.25 CHF;
• December: 6,421.70 CHF;

Expected results

• Checking account: 5,799.10 CHF (will need to be adjusted to fit the 2020 financial plan) (-1,510.75 CHF);
• Savings: 1,000.00 CHF (with the new plan, I'll update it later this year) (+666.50 CHF);
• Provisions: 0.-;
• Student loan: 8,252.55 CHF (-9,067.50 CHF);
• Lease:
  • Total: 24,038.40 CHF;
  • Paid: 8,012.80 CHF;
  • To go: 16,025.60 CHF (-6,009.60 CHF);
• 2019 unpaid taxes: 1,021.75 CHF (-4855.15 CHF);
• Private retirement fund: +6,768.-
• Debt toward family: 5,276.-

Net worth: +25,572.40 CHF.

 

Potential adjustments

• +1,000 CHF starting provisions (vineyard payment if I don't get the bill this year);
• +2,100 CHF starting provisions (if a big bill that should come before the end of the year finally comes next year).

I'll be updating the first post in the coming days.

[Jean]

Raaaarh!

 

I hate this:

• I won't be able to reach my 2018 target meaning the 2019 plan must be rethought to account for the reduced means that I have starting it;

But most importantly:

• Swiss banks are becoming crazy. Mine was pretty good but it now wants to tax withdrawals on savings accounts, which means in case of emergency, when you really need this money, a good chunk of it is taken away as fees. Do you think this would mean they'd expect less volativity out of the assets on these accounts and that they'd reward it accordingly with decent interest rates? Think again, the interests are below inflation, meaning we're loosing money by putting it there...

So keeping a 1'000 CHF minimal safety fund on a savings account serves no purpose (basically, savings accounts have no more purpose but don't start me about it, I'd write a book). So this money will stay in my checking account, which will make harder to track it and be sure to have it on hand if needs be, which seems pretty not worth it for such a small amount meaning I'll probably skip the safety fund part and just throw money in repaying my debt until I can get rid of it, start real savings and weigh with other banks to show the lazy managers operating most of our banks that they can shove the free money they're after up their ass.

 

Sorry for this, but I really had to vent. I'm feeling so captive right now I think I'm gonna explode. And I don't know where to start to finally take off because not having flexibility means I'm stuck into more stupid deals that cost me more money that makes it unachievable to take off. Our society is such a trap designed to rip us off of our money without providing any meaningul service for it it's not even funny...

 

EDIT: Thinking helps. This is the perfect opportunity for me to build a little diversity and search for a bank with no fees on a checking account. No returns for no returns, I don't think there's that much to loose there.

[Dilnad]

I'll jump on and say Dave Ramsey is tha bomb.  We followed his teachings and they are spot on. We are debt free, investing, and giving!!