So lets begin with Y2017 results as 1Q is already passed trough. In general this was winter season. Night were long and days were short. This adds up to not so great mood, but never the less spring is already here and 3 cheers to that! 🙂 Let us run trough our 1Q Budgets:
This quarter my wage income was at record high – almost 5 kEUR! It is due to full bonus that was paid to me with last 3y deferring half of it. In Total I received ~1,5 kEUR of bonus or x1.4 of my regular wage. Very good result, thank you my employer 🙂 Next my wife wage was little bit up as well totaling to 1,5 kEUR. All of it totaled to 6,5 kEUR Income. If compared to 2016 Q1 – 4,4 kEUR our income has increased by +2,1 kEUR or Δ+48%. Impressive growth, but going forward our income should remain the same as year before. Dividend income was minimal – 20 EUR.
As expected due to record high income expenses were also not so low – 4,6 kEUR and it was up by 0,6 kEUR or by Δ+15% from 4 kEUR year before. Let us run quickly trough main expenses lines:
- Mortgage loan: These expenses actually has declined to 0,6 kEUR (!) due to recalculation of my interest rates after 10y it was fixed to 3%. Now I pay 1,65% until LIBOR rate is bellow zero. As it is not expected that ECB will increase rates until Y2019 we can enjoy low mortgage payments, which decreased from 252 EUR/mo to 210 EUR/mo. This will decrease my quarterly Mortgage loan expenses from 760 EUR to 630 EUR or by -130 EUR/Q. These freed up funds will support our saving a lot 🙂
- Consumer loans: Yes we have few, but payments are not that high 0,12 kEUR. My wife bought new phone with 10mo repayment schedule. As the price was same if you pay it at once of you pay in 10 months we took the monthly payment. It is sellers choice how to build discounts 🙂 This has added 30 EUR/mo. expenses for 10 months 6 out of which has already passed. In addition we took student consumer loan. It is quite rational loan as interest is very low 1,9% due to negative LIBOR as it does not have zero floor. We paid only interest for last few years ~10 EUR/mo. and starting from now 10y repayment schedule is on with repayments increased to 20 EUR/mo. This will slightly increase my consumer loan expenses at 2017 Q2 to 150 EUR, but afterward it will be 60 EUR/Q or -60 EUR/Q compared to present situation. I do not intend to cover the loan as it have these very low interest, with my portfolio generating 4-5% dividend return it is not rational to cover the loan and not invest the saved funds. If and when LIBOR will increase we will think about speeding up the repayment of ~1.5 kEUR student consumer loan.
- Utilities: Not much to add roughly 0,6 kEUR or 171 EUR/mo. Slightly less then year before 0,8 kEUR due to declined central heating cost, which is common in whole country due to decline in natural gas price and bigger usage of bio-fuel for central heating.
- Food: These expenses remained flat on 1 kEUR level. This is ok if taking into consideration inflation and increased cost for eating at work. I have few ideas for the future on these cost, but lets save it for the future.
- Transport: here we had some higher expenses of 0,7 kEUR due to car repairs that cost me 0,35 kEUR. Remaining 0,3 kEUR was spend on fuel and 74 EUR on quarter public bus ticket. I think that our average annualized spending on transportation ~2 kEUR that makes up 1/10 of our income is quite good.
This adds up to out fixed costs, which amounts to 3 kEUR. Thats around 60% from average 5 kEUR quarterly income. Fixed income should be ~1/2 to have comfort, so its ~0,5 kEUR higher then needed, but its ok as utility bill is higher in winter, car repair also increased it. With decreased mortgage loan and consumer loan expenses we should fit to 2,5 kEUR fixed expenses that we can follow in the future.
- Clothes: we spend quite normal amount of 0,16 kEUR. This is normal as we need new shoes, coats ect. Nothing unusual here.
- Hollidays: small 0,1 kEUR expenses for airplane tickets to visit my sister in Belgium on May. For two persons, for both ways, that not really big spending.
- Other cost: it was 1 kEUR and included some expenses for visits to the doctors, stuff that my wife bought on the internet, some weekend expenses like movies, skying ect. If we look at history other expenses were always on 0,6-1 kEUR level. Lets dig a little bit more into these expenses as they take ~1/4 of our expenses:
- 158 EUR wife online purchases – This is comparably low cost to what she bought for thouse funds 🙂
- 119 EUR weekend at resort – Valentines day + birthday gift from my wife.
- 118 EUR cosmetics – girls want to be beautiful, inevitable as well 🙂
- 89 EUR presents – Birthdays is inevitable.
- 81 EUR Indore bike – bad purchase, not usable and to small.
- 70 EUR healthcare – that not high expenses.
- 61 EUR drugs – health is important
- 38 EUR contact lenses
- 35 EUR accessories
- 30 EUR birthday at work
- 21 EUR cinemas
- 12 EUR meditation app – I will talk about that a bit more later.
- 183 EUR other
- Home repair: we have spend 0,4 EUR on that. It is normal when you receive a bonus and have ~10y old apartment. From these spending we fully renewed one of 4 rooms. I have done most of the job my self, so saved a lot here actualy. No we have fully renewed 4 rooms: Bedroom, Corridor, living-room and one more room. More spending on this line for spring as we need to change windows in our kitchen. Actually we will change kitchen balcony windows and will remove old windows that separated kitchen and balcony to have almost x2 larger kitchen. I expect that this will cost us around 1 kEUR, which we have in our account after annual bonus. We agreed on balanced spending/saving with my wife, that I invest ~200 EUR/mo but also we spend some on home repair, holidays ect. Yes, this will not be a extreme cost cutting blog 🙂
None fixed expenses 1,6 kEUR or 32% from our regular 5 kEUR income. I can say that we are perfectly in line here. Again we can draw the line of 1,5 kEUR none fixed expenses.
All in all tour quarterly total expenses should be bellow 4 kEUR. At the moment average is 4,2 kEUR. Not so distance 🙂
And the end results what is left after we deduct expenses from our income. The result is impressive +1,9 kEUR. This was one of the best results in past few years. Saving rate was impressive 30%. Totally in line with Goal #1 – Save 15% of income. Hope that next quarter with heavy repair works in kitchen will not destroy this achievement.