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Finance Check: “I work to live – not the other way around”

Published April 11th, 2023

How much money she has at her disposal each month, how she organizes her finances and how her relationship and salary increase have changed her approach to money: Laura reveals all of that and more in this instalment of our Finance Check format.

What’s your (net) monthly budget?

I changed jobs in November 2022 and now earn €3,050 (net) a month. As my employer pays tariff-bound salaries, I am profiting from the last IG Metall (Germany’s largest trade union) collective wage agreement and over the next one and a half years I’ll be entitled to further permanent wage increases.

Are you renting or buying your home? 

I live with my boyfriend in a rented apartment near Freiburg. We have around 80 m² of living space, as well as a balcony, a glass-covered veranda, and a small garden. I lived and worked in Frankfurt am Main for the last five years, which was great because there was so much going on and plenty of variety. But at some point, we felt the need to move (back) to the mountains and lakes – all in the name of a good work-life balance! But I can get the tram to work every day, as well as working from home now and again. That means it’s really easy for my boyfriend and I to share a car.

What’s the breakdown of your monthly outgoings in fixed costs and variable costs?

My fixed costs add up to €1,776 a month: €1,143 for my share of the rent (including heating), around €74 for insurances, the €15 account fees for my Tomorrow Zero account, €69 for my monthly public transport ticket, and €25 for my gym membership. My boyfriend and I share the costs for subscriptions like Spotify, Netflix etc. 50/50. And I also transfer a set amount of €150 for groceries and other costs to our joint account every month. On top of that, I’m also paying off my dental splint in instalments of €100 and putting aside €200 every month to go towards paying back the family members who lent us money for our new kitchen, as well as the deposit for our apartment.

In the past, I would probably spend up to €250 to €350 on eating out at restaurants and going to bars, the cinema, events etc. Since we moved, our social life has suffered a little. But I’m hoping things will pick up again once the weather improves and the days start getting longer. I make an effort to buy as little clothing as possible and to shop mindfully, but I can’t help making the odd impulse buy every now and again.

Before we moved house at the end of 2022, I managed to save just under €7,000, but that was for the move itself, furniture, electrical appliances, apartment deposit etc. and it’s all gone now. At the moment I’m trying to save €400 a month. I’ve invested in Tomorrow’s crowdinvesting campaigns twice, with €100 each time. At the end of the month, I put aside the money that’s left over after paying my outgoings and my fixed savings rate in a Pocket to save up for bigger purchases, vacations etc.

When you see the breakdown of your finances, does it surprise you or do you check your spending and income regularly?

It doesn’t really shock or surprise me. Despite my Swabian roots (if you pardon the frugal stereotype!), I’ve never been shy about spending my money. But that doesn’t mean I waste it, or that I’m not good with it, because I do try to make conscious and informed purchasing decisions. If I want to buy something for myself or someone close to me, I don’t always look at the price – which I see as being a real luxury.

How do you organize your finances to keep track of everything?

I have two accounts: one for myself, and a joint account with my boyfriend. My salary is paid into my own account and all the costs I’m responsible for myself are deducted from it too. I have a standing order to transfer my share of the rent and groceries to our joint account at the end of every month. I don’t have fixed saving amounts – I try to save €400 a month, but if there are months when it’s just €300, then that’s okay too, and whenever I have a bit more money than usual left in my account at the end of the month, I will transfer that to my Pocket sub-account as well.

In my notes, I have a list of things that I want to keep a close eye on. I’m sure there are better solutions but so far, I’ve been lacking the drive (and probably also the urgency) to take a closer look at it all.

How are you making provisions for your old age or saving up for bigger dreams for the future? 

Since changing jobs, I’ve been paying into a company pension scheme, which is topped up by my employer on a percentage basis. If you aren’t making private retirement provisions, you won’t have much to fall back on in the future. For the last few years, I’ve had a bit of a ‘laissez-faire’ attitude to it all, along the lines of: “It’ll all work out okay in the end.” That attitude probably has a lot to do with the fact that I’ve only really been earning a decent wage for just under three and a half years. Before that, when I was working as a trainee and an intern, I didn’t have very much in my account at all, which is why, once I started earning a good salary I made up for the times when money was scarce by spending without worrying too much.

I’ve really only started thinking about making provisions for the future or bigger purchases that I (or we) would like to make since I met my boyfriend and moved in with him.

What is particularly important to you when it comes to money?

Money, or talking about how much you earn in particular, is still taboo in many families, groups or sectors. I can understand that to a certain extent, but personally I think it’s a shame when I want to talk openly to my friends or family members about my finances and only get evasive answers back from them. There are entire studies on why money, especially in Germany, is still a taboo subject.

If I want to buy something for myself or someone close to me, I don’t always look at the price – which I see as being a real luxury.

I come from a working-class background and I’m the first one in my family to complete school-leaving exams and to study. My parents started working when they were 16 and were able to start thinking about starting a family and building a house when they were in their mid-20s. Unlike them, I only finished my degree when I was 26 and got my first proper job when I was 28. I’m not saying that that’s no longer possible today, but it just didn’t fit into my career path. I work to live – not the other way around, or not anymore at least! I’ve made a point of living by this principle, and I am getting by pretty well as things stand now. But we’ll have to wait and see what the future brings.

What do you wish you’d known sooner about money and finances? 

Due to recent experiences, I wish I’d known sooner how important it is to stick to deadlines when dealing with the job center. Stupidly, last year I missed the three-day deadline to register with my local job center as seeking employment once I’d resigned from my job (after seeking medical advice), which meant that I missed out on a week’s worth of unemployment benefits. Fortunately, I was only unemployed for a month before starting my new position and financially, I wasn’t dependent on the money for that one week. But even for me – as someone who has access to the internet, the ability to google, and fluency in German – it still wasn’t really clear when I had to submit which documents in order to receive the money. That’s typical German bureaucracy for you!

Apart from that, I’d have liked to have had more transparent insights into how I can make my money grow in the long term. The best thing would be a simple three-step guide to success, something like “Investing for Dummies”. Or it would have been good to have had someone who encouraged me to take better control of my finances. At the end of the day, I’m happy that my boyfriend and I can talk openly, honestly, and transparently about money and everything related to it. We always try to find the best solution and make the right decisions together.

Find out more 

Budget Calculator: Better understand monthly spendings

Sub-accounts: What are they and what are they for?

Sustainable investing: What you need to know