Twenty Something and Starting

Ever since I starting working an office job at age 22, I have been piling on the pounds. So I recently took the decision to start getting more exercise. Now the cheapest option would be for me to either exercise outside or going to my company's gym. However as both entitle my very self concious self having to exercise infront of other people I have not been able to get up the courage to go to the gym and outside exercise works but I also sometimes talk myself out of doing it for various reasons. So I have decided to rent a treadmill. I know this sounds like an expensive waste of money and I'm not even going to try and justify it here as in all honesty I know I cannot. I feel as though I need to start getting more exercise and getting healthier and hopefully this will lead to me being less self concious. My aim is to eventually stop renting the treadmill and to go to my companies'gym.

In the meantime I have decided that I will rent the treadmill as long as I use it enough to justify it's costs. It will cost us 50 EURs a month to rent ( the treadmill would have cost 1200 EURs if I had brought outright, which means I would have paid the full price for it if I rent it for 24 months). I will attribute 5 EURs value to everytime I use the treadmill for 20 minutes and 10 EURs value for a 30 minute session. At the end of each month I will calculate if I used the treadmill for a value more than 50 EURs, based on the values allocated above. The first month I do not get 50 EURs worth of value from the treadmill, I will cancel my rental and return it. I this way I can be assured of not paying for something that I am not using.

I received the treadmill yesterday and have not used it yet. I plan on trying it out tonight and will let you know how long I am able to use it for. Wish me luck!

I have made an appointment with our garbage collection company to come and pick up several larger items which we can no longer use and which have been sitting around our appartment collecting dust. I've noticed a wave of blogs about de-cluttering and simplifying your life in order to be more effective on this website and have received some inspiration from them. I am now going to start accessing how I can de-clutter my life at work and at home.

First steps will be:

- List some of the important things that need to be done.
- Prioritise the line items.
- Then brain storm on how to achieve these things.
- Take action on each in turn.
- Re-assess progress.

I have no times lines for the above yet. I guess I'll start off by making a list of the things I need to get done.

Thank-you to those you have voted on my contest entry "10 things I wish I had known before I moved out of my parents house"! I am trying to work on my written communication as I have had to start doing quite a lot of it in my new job. I never used to have to worry so much about what I wrote before. It's difficult for me to constantly think of the audience I am communicating to, how they will understand my message, will they understand my message, whether I am making it interesting/serious enough and am I including all the necessary information. So I've decided to practise my written communication by writing more in my blog here. :-)

I moved out of my parents house to live with my boyfriend with only 1800 EURs to both our names. We both had fulltime jobs but that did not prevent us from getting off to a very rocky start. We lived in a one bedroom hole in the wall with a matress on the floor to sleep on and our clothes in suitcases. I'd like to share some of the things I learnt during that time and since:

1) You will survive.
No matter how tought it gets, the love you have for each other will get you both through it. No need to lay awake at night stressing. No need to over eat and gain weight. No need to lose your hair. You will be fine if you watch your pennies and work hard.
2) Know who you will owe.
One of the biggest stresses for me was the occassional large bills which came up, that we had no idea about and had to pay in less than a month's time. I have since found out about all the taxes, health insurance policies and other miscellaneous money suckers that are part of the grown up world. I now know exactly when large chunks of our hard earned money will be due for payment. I would recomend any freshly independant adult to ensure they know exactly what bills they will have to pay, how much they might be and when they should be expected to pay them.
3) Keep an emergency fund (in other words, that fancy furniture can wait).
We always kept an emergency fund avaliable, starting off with 500 EUR. Whenever we had to dig into this fund we would then spend the next few months building it back up to our minimum of 500 EUR.
4) Keep your monthly costs as low as possible.
The less money going out each month the more you will have to save/spend.
5) No matter how little start saving.
I did not start automatic monthly saving until recently and am still kicking myself for not starting this good habit earlier. This lead us to rely on the CC more than we should have.
6) Start a pension fund ASAP
Again, I waited until the age of 25 to start my pension savings, as that was the year it becomes compulsory in my company. I realise now that you should never trust other's with your savings decisions as they do not have the same passion for your own finances that you do. And 25 is not better than 22,23 or 24 to start your savings.
7)Don't rush moving out, you'll be giving up the cheapest rent you'll ever know.
Boy do I regret giving up that cheap rent, even if I could no longer bare being under the same roof as my parents. Sometimes you just need to swallow your pride and take the cheap rent ;-)
8)Accept offers of help from friends.
We received many offers from friends to have old furniture that they no longer used. We turned most of these offers down because we were disillusioned enough to believe that we would be able to afford some beautiful, imported, solid wood furniture within 6 months. OH sweet ignorance! 2 years down the road we were still sleeping on the matress on the floor.
9) Share your costs.
Try and split your bills with as many people as possible. Can you rent with someone else? Can you share the cable? Do you go grocery shopping with your neighbour?
10) Enjoy the time.
I wish I had relaxed alot more and just enjoyed the time, rather than freaking out about keeping my job and saving to buy that 600 EUR microwave oven, which lasted us just over 3 years before it broke down when we replaced it with one that cost less than one third of the price. I prefer our new ,icrowave too because I did not have any sleepless nights over buying it.

I worked during a bank holiday this week and am still debating whether to take the money or the days off. I've already handed in quite a few holidays days in the last year and feel I could do with the days off instead.
I'll need to think about this one.

Having posted 2 rants on this issue in the last few days, I am already feeling better about this issue and writing it out has also started help me understand that the problem does not lie with me but with Emma. One of the things that has become very important to me in the last few years, is being honest and consistent in the way I communicate to other people. As I feel I had a problem with this in the past as I tend to be a much more internal person and therefore have troubles trying to convey who I really am and what I really think to people. Because of this I tend to accept what people say to me and show a non-commital form of agreement, rather than show my true opinion. This can lead to confusion and people feel as though I keep things from them. So I have been trying to work on being able to communicate and connect with people in a more honest and consistent manner. It's hard sometimes to find words to convey what you truely mean if your not used to being verbal about your true feelings.
Anyhow, I feel writing this stuff will also help me in my quest of improving my communication skills.

Well the next episode in this saga continues:

After the episodes I described in my previous posts, we stopped talking in a social way and started only communicating when necessary. I thought it would end there, especially as I was already looking for another job, within the company and had decided it was my time to move on. I had been in the job almost 2 years and knew a substantial amount. I had obtained several skills and taught myself some others, I'd also received a glowing performance review and knew that I was in a good place to apply for a new job within the company. Luckily for me 2 positions became avaliable within my department around that time, one for a manager role and the other for a business analyst role. I knew people were discussing which one I would apply for, but I kept my decision quiet and played the whole thing down as I did not want to have to have the extra stress of being watched through the whole application and interviewing process.

However, these sort of things never remain secret for long and of course the rumour went round that I applied for the business analyst role, as did 5 other people from our department. We under went an initial test, during which 2 people were eliminated from the interview round. Then we had our interviews and for 2 weeks after we were told nothing. There were 2 positions avaliable for which 3 of us were interviewed. Finally one Friday afternoon I was chatting with 2 people from my team and my manager walks up and calls me to an office for an impromptu meeting. The 2 people I was speaking to did indeed realise what the meeting was about. I was told that I got the job, however neither of the other 2 candidates were accepted, however they were not going to be told yet so I needed to keep quiet about it. I agreed full heartedly that they should not hear from me that I had the job and definately not that they did not get the job.

So when I returned to the team I acted as though I was let down to the 2 people who realised I had been called to discuss the job. Emma overheard the conversation and spent the next few days boasting to some of our team members that someone had been turned down for the business analyst job.

A month later we announced to the team/department that I had accepted the position and was going to be moving to the role.

During that month I kept my distance and did not speak to Emma, as I just wanted to move on and forget about our differences. I felt then as I feel now that we have nothing to compete against each other as she is a very beautiful, slim, intelligent women whos dresses in expensive, fashionable clothes. Whereas I'm quite plump, hate shopping and hence wear the same clothes frequently and am not very social. I do however treat myself to the occasional extravangant item, which leads to the next event.

I own the gold Dolce Gabbana Motorola phone, which is very guady. When you switch this thing on or off it calls out Dolce Gabbana very loudly. The one evening after six o'clock, after most people had gone home, I switch on my phone. It called out it's annoucement and I hear one of my colleagues ask who's phone was that. Emma replies It's not mine, I would not have such a hooker phone.

I could have got up and pulled her weave off of her head, but instead I held my tongue and let it go, but I regret it now. That night she let open the doors for me to find out more about her life from the collegue she made this comment to as that collegue also found it an uncalled for comment.

I knew this information before, but the way the colleague explained it to me I could never have suspected just how far someone would go for their hunger for money. Emma, who is a recently divorced 27 year old women is now living with a 60 something rich jewish man. He has 2 children nearly her age and she is living the high life off of his money. She has taken up an assortment of different hobbies just so she can hobnob with the rich crowd ( sailing, flying lessons, tennis, golf etc). Somehow she has also managed to have this guy write her into his will so that if he dies, she will inhieret a holiday house he own in Switzerland.

At work, she spends her days trying to network with anyone who she meets. Her thing is offering to buy them lunch and she will never go to lunch without her note pad. She signs up for any event/organisation that she feels might help her meet the people she needs to meet to get where she needs to get in life. She is determined to move on up and she has stepped all over people in order to try and do so.

So here I will leave this entry, as I have strayed from the path a little. I question myself if this is how people get to the top? Is this how people make lots of money? Is Emma going to succeed in life and the rest of us going to fail because we're not willing to go that extra mile? Do people admire people like this? Should I admire her, or pity her?
I guess this is what I am trying to figure out in my own head.

I came across this documentary explaining the lead up to the current financial down turn. It is a UK documentary but it may be interesting to people in America as well as it talks about the crisis on a Global level.

http://bestdocumentaries.blogspot.com/2008/04/super-rich-gre...

This post is a follow on in my personal rant series in which I am trying to understand and let go of the frustration of dealing with a colleague so hungry for sucess that it seems she will do anything for it.

So last time I left off with the first incident that occured between me and Emma, that started me doubting how genuine she was trying to make friends with me. We eventually discussed what the issue was that caused her to stop talking to me and I apologised fully letting her know that I did not realise that my actions would have hurt her, but also asking that she would speak to me straight away if there was osmething bugging her instead of not talking to me for some time. I am the type of person that once burnt I am very cautious with people so I kept my eye on her. She started coming up to me and being overly nice, in a way that grated against my nerves as it was an act. I mirrored her behaviour.

This went on until our manager went away again, now I missed this out on my first post but realise now that it was a key factor in what caused the next run in. The first time our manager went away Emma called in sick the first day. I did not think much of it at the time and as it was my first time backing up our manager did not know how the sick day would be organised with human resources. I assumed that she would call HR and HR would record it in the calendar then I would just need to know to communicate it to the team. When our manager came back to work I let her know who had been sick and for how long so that she could check that it had been recorded in the system. However, our human resources insist that sick days are recorded the same day that they occur, so there needs to be a check on whether people do call in sick or not.

So the next time our manager went on sick leave, Emma called in sick the first day aswell. I did not quite know how to go about ensuring she called in sick so I checked with the manager of another team to see if they would check. They insisted that I have the person send me their reporting better email when they return to the office. Now this email is an automatic email sent to anyone who has reported sick with our HR just asking them to reply with the day they are better and the amount of hours they will be working (which may be reduced if you are not fully recovered). No personal information whatsoever and you would normally copy in your manager. So not foreseeing any problems, when Emma came back in to the office, I asked her just to copy me in instead of the manager. She said that she did not want to and she would call HR to complain. She did call HR who did not quite know what to say. I spoke to the other manager again and he advised that if she was not willing to copy me in on the email she should copy him in. I advised her if she did not feel comfortable copying me in to the email she should copy in the other manager. She then went off to have a discussion with him about this "injustice". From that point on anyone who called sick, I advised should copy in the other manager when they report better.

This incident resulted in my outright dislike of this person. I still communicated to her, but only in professional situations and with no personal information. Surely I know that this was not the correct action to take but I realised that there was something much bigger behind these issues we were having and I did not want them to escalate as we still had to work together as colleagues.

However, a little while later we received our annual bonus and raise information, which is based on a performance rating. The information is reported on one sheet of paper, where your annual salary, bonus and new annual salary after your raise is noted. As I am very good at calculating out and explaining these figures, she came to me and placed the paper on my desk and asked me to explain everything to her in detail. *SHOCK HORROR* She refused to copy me in on her reporting better email, which contained NO personal ifnormation, yet she wants me to explain to her just how much money she will be earning for the next year based on her performance as rated by our manager????? Does this make sense to anyone else, because if it does please explain this to me?

So this covers the second major incident in this saga. After this our communication shuts down and we stop speaking to each other all together. However, due to gossip the next part become much more interesting and is when I start building up a better picture of Emma and how determined she is to suceed, it also brings me to question how I see life. I'll cover some more in my next entry.

Yesterday I received my annual pension overview from my employee's pension and I was shocked at the difference in the estimated end value from last year's estimate.

2006 estimated value: 297,636.91
2007 esitmated value: 195,572.63

Over 100 thousand difference. Then I read on to find out that they changed a few things in the calculations.

1) They did not include any predicted pay raises.
2) They used 4% standard interest rate instead of 5%.
3) The company has changed their percentages for contributions for the age ranges, favouring the older participants in the pension scheme. This is to try and combat the low amount of savings in that age group.

However, I think this really shocked me into realising we are not saving any where near as much as we should be for retirement. Something new to work on once we have built up our emergency fund.

The title of this post refers to the hunger for success, and alludes to a situation I have been dealing with at work and am having a hard time letting go. I feel that I need to understand the situation before I can let it go and therefore I will start recording this issue in this blog and in that way I hope to it out of my system. These rants relate to personal finance in that it affects my attitude to earning more money.

I would to set the scene: I work for a international company at their headquaters and in my work I have to work with people for all sorts of different backgrounds and cultures. Now since I've been exposed to an international environment from a very young age this does not bother me, and I do consider myself very flexible when it comes to other people. Well just over a year and a half ago I was working in a team of about 10 people when a lady from Jamaica joined us. Let's call her Emma. She appeared to be a very beautiful, intelligent, well spoken, quiet and serious lady. Emma appeared to pick up the job very quickly and did not readily involve herself in the frivolous antics of them team. She would take every opportuntiy to ask questions about the job and would ensure she wrote down the answer. we were all very pleased to have her as part of the team, despite her reticience to join in our attempts to lighten the spirit in the office. Then slowly after time she started joining in the conversations and bulding relationships with the other team members. At the time I was one of the longer serving team members and everyone in the team would come to check their question with me, including the new manager. I was the team mentor and the manager's back up, however it is important to know I did not mentor Emma.

Then as she began to realise that I would alsways give her a full answer to her questions, whereas the other team members did not always know how to answer her questions, she started coming to me and adopting me as her mentor. She did this by flattering me and she tried very hard to become friends with me, even offering to walk with me on my way home, which meant she would need to walk 20 minutes instead of 10 to get to the strain station. We seemed to be bulding a freiendship, albeit rather quickly. During these walks she would tell me about her personal situation and as she eventually filed for divorce from her husband, these conversations were quiet personal. More personal than I wanted them to be, however I got the sense she needed someone to talk to.

Then one day, while our manager was away on holiday and I was back them up, this girl started being awkward towards me and eventually stopped talking to me. I only found out why many weeks later and will now share both her version and my own version of this story below so that you may make your own conclusions:

Emma - During the few days that I was backing up the manager, it was announced by our director that one of our team members would be leaving us (he had been fired). That day Emma told me that she was worried about her contract as it seemed as though alot of people had been leaving lately and I told her not to worry as each case was different, there was no general trend. It was more a co-incidence that alot of people left the department that month. However, after that the director and I were discussing how the team had received the information and he asked me if anyone had any particular worries and if I thought he should maybe go and reassure them. I mentioned the conversation that I had with Emma, so the director spoke with her to reassure her that she needn't worry about her contract.

According to Emma, the fact that I spoke to the director about her worries was what annoyed her. She saw at as me dimishing her in the eyes of the director. She took my actions as a betrayal and told me that everyone is ambitious but not everyone has to step over other's bodies in order to grow.

Please would you share you opinions about Emma's opinion to me, as I'm not sure if I'm being obtuse or not, but I found it strange.

My version - Up until that day before the incident described above, Emma had received praise from all angles on how good she was as an employee. How happy we were with her, that she was the best our her training group etc. Several months after she started we hired an American guy, who was also very serious about his job, so much so that he would come in early, do nothing but work until lunch, take his lunch and then leave late at night. The few days before my manager went on holiday and the several days before this evident, he was handling the work that would normally require 3 people to handle. So the incident I believe caused the issue with Emma is, I asked this guy if he was okay or if he needed any help from anyone else in the team. He said no, so I told him I thought he was doing an excellent job, thanked him and asked him to let me know if he needed any help. When I sat down at my desk Emma stood up for a chat and I made a comment on how well I thought this new guy was doing and she quickly returned to her own desk.

I believe I stood on some toes with Emma, by reaconizing someone else's work to her.

Again, I'd appreciate your comments on this situation.

I will break the rant here as I feel you have enough spelling mistakes and rambling sentences to deal with.

I'm doing a little celebratory dance right now as our net worth has finally reach the golden positive numbers. WOOHOO!!!

We still have my student loan debt, however, we now have more assets than liabilities and can really start aiming to build on our current financial foundation.

It feels good to reach these goals.

Last month I started tracking my progress against my financial goals for this year against a monthly scale. As I have set several goals in different areas of saving and am aiming to achieve these goals in order of priority, I find this a much easier way to measure my progress. How I am trying to do this is that I am noting down what my individual goals are and the value amounts of what I expect to achieve by the end of the year. Then I noted what my actual starting amounts were then minused these two amounts, which gave me the actual amounts I would require to reach my goals. I then divided these amounts by 12, which gave me the monthly amount required to reach the goals. I can then compare my actual amounts saved or paid off each month to the monthly amounts provided by the above calculation. This way I can see which goals I am on target to reach after 12 months and which ones I am still behind on.

I have also carried out this calculation on my goal net worth, which includes all the individual golas I set. This gives me a clear indication of how I am tracking overall for the month.

So for example, I may be behind on paying off my student loan by 2 months, but I may been ahead of paying off my CC by 2 months and therefore still be on track to reach my financial goals by the end of the year as my net worth may be right on target.

I hope my explaination is understandable. This system of goal tracking is very much a work in progess for me and I'm open to any feedback or suggestions you may have that might help me keep a better overview.

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Well after all the explaination lets have a look at my progress to date. I managed to pay off our CC this month (woohooo go us! - I'm still celebrating this one and will be for a long time) which means I have accomplished my total target for the next 12 months on that one. The only debt we still have is my student loan, but due to the very low interest rate (3.5%) on that loan we have decided not to pre-pay it just yet. Instead we are going to build up our savings, which has already started and hopefully should pick up some momentum in the next few months. We are currently not behind on any of our goals and are ahead on some, which puts our net worth at our 5 months expected goal. Woohoo!



This is the first year that we have ever set actual financial goals for ourselves and it is also the first year that we've had so much extra cash. Mainly due to both of us changing our jobs in the second half of last year, which increased our take home income by 1000 EUR each month. So there were alot of uncertainties when I set the goals for this year. I do not feel as though we will keep up this great progress for the whole year so I don't think I need to adjust my goals to be more agressive. If we can reach them I'll be happy. Then we'll see what the next step will be.

We have finally paid off our CC in full WOOHOO. Below is the beautiful sight that I saw when I checked out CC balance online today, with all personal information removed.



I was aiming to have this baby paid off in March'08, however due to life happening the pay off date was delayed. However I am so happy we have finally paid off this 17.5% interest rate financial shackle.

I also want to celebrate the fact that our net worth is only -251. We're almost at our goal of having a positive net worth. I'm so proud of the amount of progress we have made since January and am determined to keep up the momentum as much as possible. I do not expect that we will keep to the great rate of progress for the rest of the year, but I do feel as though we have managed to adjust our way of thinking from a mindset of spending to one of saving. I think it helps that we have discussed both our longer term desires and that we are both focused on saving in order to make them possible.

Woohoo go us!

This week I only had to pay for my own lunch at work 1 day as I was treated to lunch by the company for the other 3 days. The company was closed Friday so I was at home today for lunch.

We seem to have cut back our spending unintentionally this month as after all the bills are paid and our monthly extra expenses are covered I have been left with a large amount than I thought, so I'll be putting that money towards paying down the CC. We had several unexpected expenses added to the CC this month, so I'm pleased to be able to pay some extra towards it. We will not have it paid off by the end of March, which was my original goal at the beginning of the year. However I hope to have reduced it to just over 1000 EUR by the end of the month. It's still better than it was at the beginning of the year and on top of that we have made bigger strides in both our retirement and long term savings already this year, so I guess that I should not feel too bad about not reaching that goal.

While reading someone else's blog today I came across the below documentary which I would like to share with you all.

http://www.youtube.com/watch?v=b-dib6hSlcU

I am wondering if we ever did reach the 15%?

So far 2008 has been throwing sh*t at us and most of it is sticking(excuse my language).

If I read around the blogs I get the general feeling this year hasn't started out very good for many people. Please feel free to leave your comment at the bottom of this post to let me know how your 2008 is going so far, because misery loves company...

Today I came across a blog of a couple that were both in their late twenties which caught my interest as there are relatively few young people who blog about their personal finances. However, the similaritites between my situation and this couple ended there, as they seemed to be so much further with their savings and in particular their retirement savings seemed to be the most important part of their current financial situation. They were saving a little over 20K a year towards their retirement to reach a goal of 3M at retirement. Even then they seemed to be seriously doubting whether or not that would be enough for them to retire on comfortably at 65.

This extreme difference between their view on their savings and my own, lead me to realise that everyone is different when it comes to their personal finances. My BH and I want to save a decent amount for retirement, but are not willing to go without everything in order to save for it. Whereas some of the happiest people on this site did just that and have succeeded in retiring at a very young age. However, if I was to aim for the same goals that this couple were, I'd be in a constant state of panic as the goals are literally unobtainable for us. So rather than slide into a downward spiral into depression about the state of our finances and inparticular our retirement savings when compared to these supersavers, I am going to take responsibility for our choices and aim for an attainable goal given our circumstances. That is the only way that I can ensure we both maintain a healthy state of mind.

In this case, I choose not to keep up with the Joneses, but I do wish them the best of luck!

It is only 2 days into the month of March and all my financial plans for this month have already gone up in smoke. Mostly because I always count my financial month starting from the day I am paid which is the 25th of February, rather than the start of the calendar month. Also because the money we expected to be deducted from BH's salary this month to go towards his pension, was not deducted, which just means we'll have to pay an additional month's contribution if the money is deducted next month. I am doubtful whether the month will deducted next month as it seems the company who is handling BH's pension is very unreliable. This makes it very difficult for me to put a plan into place. Also this month we helped BH's parent financially, which was an unexpected expense and one that may become a regular on our monthly budget depending on how a few things play out.

So the CC will not be paid off by the end of March. In fact we also had our microwave oven break down the last month, so the debt open on the CC has gone up to 1156 EUR after a 100EUR payment made in March (On my sidebar I register the current total paid off since the beginning of the year). Due to the unexpected expenses that have come up, I'm not sure when we will have the money to pay off the CC now. I just hope it is not too far in the future.

On the upside, there has been an additional 794 EUR added to the pensions this month as we found out that BH's company was actually contributing to his pensions plan for the last 6 months, so at least there has been the compulsory contribtuions going in.

Also for this month I participated for the first time in my company's saving plan, which meant I sent 56 EUR pre-tax to a savings account. About 18 EURs of this is money would otherwise have been paid to tax. We also received 155 EUR refund from last year's gas and electricity bills. This money has been transferred to our high yeild savings account(4.5% interest rate) as a start on our long terms savings.

We have also received an unexpected tax bill, which I should have been aware of but had forgotten about. So that's an additional 410 EUR. We can pay this one off in 2 installments, the first is due before 30th March and the second is due by 31st May. We are currently discussing how we should pay this particular bill.

In the meant time, my plan for March is to try and keep control of our spending as much as possible. Prepare our savings for when the pension contribtuions are deducted from BH's pay and use any extra money to pay off the CC.

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Despite all the uncertainties, I wanted to take a look at how we are tracking against the goals I set for us at the beginning of the year as no matter how badly we seem to be doing right now, we need to keep our focus on the goal, as you never know when your luck may turn.

I am going to track these goals pro rata or based on the fact that we are 2 months into the year so should be 2/12 (two twelfths) of the way to the total goals.

- Goal was to pay off CC in full.
Starting amount was 2140.14 EUR
Current amount is 1156 EUR
This would require 178,35 EUR paid per month.
Expected for Feb 356.70 EUR.
45.98 % paid off or 5.5/12.

- Goal was to contribute 4800 EUR to pensions.
Current amount is 981 EUR.
This would require 400 EUR per month
Expected for Feb 800 EUR.
20.44 % contributed or 2.5/12.

- Goal was to save 3000 EUR for long term savings.
Current amount is 210 EUR.
This would require 250 EUR per month.
Expected for Feb 500 EUR.
7% saved or 0.84/12.

- Goal was to save 2000 EUR for EF.
Current amount is 0 EUR.
This would require 167 EUR per month.
Expected for Feb 334 EUR.
0% saved or 0/12.

- Goal was to pay off 480 EUR for student loan.
Current amount is 89 EUR.
This would require 40 EUR per month.
Expected for Feb 80 EUR.
18.54% saved or 2.23/12.

- Goal was to earn 40.09 EUR interest.
Current amount is 4.55 EUR.
This would require 3.34 EUR per month.
Expected for Feb 6.68 EUR.
11.35% saved or 1.36/12.

- Goal was to increase net worth to +6,739.14 EUR.
Current amount is -2,532 EUR.
This would require 1032.43 EUR per month.
Expected for Feb -3,585.14 EUR.
25.17% saved or 3/12.

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These totals have actually made me feel better, because although I am very behind on some of my goals, my overall net worth goal is 1 month ahead of where I expect to be. This is mainly due to my concentrating on paying off my CC card. Once that baby is paid off I'll snowball the money to my savings goals and should be able to catch up quite quickly. So despite the current misfortunes we are on track in the bigger picture. woohoo go us!

************WARNING*********************
*************There is a frustrated rant below, read at own risk************

So this is the second part of our financial regrets. The first one covered the bad financial decisions we made ourselves; this part covers the bad financial decisions made by our parents which are affecting our current financial situation.

Hopefully, if this issue affects anyone out there then I hope it is only one side of the family. In our case we have both his parent and my parent’s bad financial decisions affecting our current situation. Both of our parents have not been very good with their finances through out their lives, despite being giving plenty of opportunities to secure their financial futures. His father always made a good income with whatever he turned his hand to, and he also won a lottery once, which if he had invested the money wisely, would have set his parents up for the rest of their lives. My father always had a good paying job to, both he and my mother received some inheritance money.

Despite their good fortunes, both sets of parents have unstable financial situations now that they are verging on retirement. Now I am aware that times have changed in the last few decades, whereas their parents before them did not have to worry so much about their pensions, as most pensions were provided by employers or the governments ( depending on where you live). However, this knowledge does not make me any less annoyed with their bad financial decisions and that because of them my BH and I may need to step in and help out.

What makes me probably even angrier is when they were younger and having financial issues, who did they turn to? They turned to their parents of course. However, now that they are grown and are parents themselves instead of turning to their parents, they will turn to their children. Which leaves the question for me of who do we turn to for help?

As you may see this is a sensitive topic for me right now....I'll return to it in a later blog.

Recently I have been posting about all the good steps that have been taken to secure our financial future. However, there have also been some bad steps taken in the past which are affecting our currently financial situation, which I'd like to record as a reminder and warning.

I will divide this topic into 2 parts. The first covering the decisions made by me and my BH with direct affects our financial situation and the second part will cover choices made by our parents which are directly affecting our current financial situation. I have decided on this split as I feel the first part is much more straight forward to explain while the second conjures up powerful emotions.

When BH and I first moved in together we both were very naive when it came to anything to do with money. We started off with about 3000 EUR. 1100 EUR went to pay the deposit and first's month's rent on our apartment. So we had very little left over and every penny was important. We were lucky that the apartment came with a washing machine and tumble dryer, fridge, stove and curtains. However, we still needed to buy a few household items like a mattress (we did not have a bed, we just slept on a mattress on the floor for about 3 years) and a microwave combi oven. In our very unrealistic view of the situation, I thought we'd only live in the apartment 6 months because by the time we'd have enough money to put down a deposit and buy a house. Little did I know it would take us 2 and half years just to have enough money together to place a deposit down on a bigger apartment and still just be sleeping on a mattress on the floor. So when we purchased the first few household items, we decided we needed to have the same sort of things we'd been accustomed to while living with our parents. This meant instead of buying a microwave for 150EUR, we brought the most expensive microwave in the store for 499 EUR.

We were so proud ourselves when we got that microwave oven home to our hole in the wall apartment. We made a fuss about setting it up in our tiny little kitchen ( it took up half the counter space available in the kitchen). It was so wonderful because we had brought our first grown up household appliance, one of many fancy ones to come. The first few weeks we kept admiring our new purchase and congratulating each other on what great taste we both had. We were like a right bunch of peacocks, pruning our feathers in front of each other!

Fast forward to last week, 4 years and a few months after our initial purchase and I am using the microwave to heat up milk, when it finishes it beeps, I take out my milk and close the door. As I'm preparing my milk I hear the microwave beep again. I've never heard it beep like that before, so I check this screen and see the screen has gone blank. So I check to see if I can change it back to normal. It does not work. So I try to reset it. No, that doesn't work. Eventually I unplug it then plug in the power cable again and no it still does not work! I checked the user manual but still it does not work!

So here we are, with no warranty and the decision to pay to have this expensive microwave fixed or to buy another one that is cheaper and more reliable. At this stage we are kicking ourselves; normally we would expect a cheap microwave to lat at least 5 to 6 years, at the very least! So an expensive should last longer, or at least you would hope. In the end we decided to buy another one, cheaper and more practical with a 5 year warranty. One very expensive lesson learnt by me and my BH.

Buy according to your budget. So all purchases we make now are carefully considered with a cost versus benefits calculation built in.

I wish I had realised this sooner, but I recently discovered two ways of benefiting from tax exemption, which will result in an additional 1020 EUR saved instead of paid to the taxman. So in effect, I found a way to give myself a raise curtesy of the government. I've done this by:

1) Enrolling into my employer's savings plan, which allows me to save up to a maximum of 600 EUR a year, pre-tax. The only catch is I cannot touch the money for 4 years, as if I do I will need to pay tax over the amount. At a tax rate of 34%, this means I earn an additional 204 EUR.

2) Maxing out our employer's pension plan contributions. This year I have increased our contributions by 2400 EUR, which means I will have an additional 816 EUR instead of ginving it to the tax man.


I love this tax exempt saving, as where else would I receive an annual return on investments of 34%?

Since I have found this site and several other personal finance websites, I have become more and more excited about creating a financially secure future for me and my BH.

When I first turned to the web for some help with our finances, I was very insecure and stressed about our financial situation. We always seemed to be so many steps behind everyone else we knew. I was faced with some pretty big anxieties about not only our financial future, but those of our families'. However, since being able to read about other people being in the same situation and how they are coping with it, I have managed to calm myself down from being worried and stressed all the time.

After reading so much about personal finance I have come to realise that I have managed to equip myself with some pretty hefty tools to use against even my worst money fears. This is itself is comforting. However, I have even gotten to the point where I can be so excited about new opportunities and goals that I find myself thinking about them over and over again. Budgetting, calculating, setting, re-setting and finally taking actions to make and achieve these goals. This excitement is a wonderful feeling and I hope that I never forget just how empowering it is to take charge of my finances and build something with them.

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As an exercise to keep myself on track and also for records sake, I am going to list the steps I have already taken this year to achieve some of the goals I set for us at the beginning of the year.

- We have paid off 1200 EUR of CC debt.
- I have signed up for my company's saving plan. This should result in a saving of 600 EUR this year, tax exempt.
- My BH will start maxing out his contributions to his employer's pension plan, which should hopefully kick in this coming month. I already do max out my contributions.
- I have opened up a free internet savings account with a 4.5% annual interest rate.
- I have set up automated transfers for monthly savings and several bills. This means I have less stress each month when it comes to ensuring all bills are paid on time. Only 3 line items on our monthly bugdet are not automatically deducted from our account( groceries, travel and extras).
- We upgraded our internet and downgraded the monthly costs from 30 EUR to 23 EUR.
- Gas/electricity bill has been reduced from 148.01 EUR to 137.01 EUR per month.

Wow, even I did not realise how much has already been done until I just listed the items. Can you tell how excited I am?

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One last note, I have found another goal I would like to track for 2008. Last year we earned 40.09 EUR interest on our savings. I am going to track what we earn this year and hopefully this number will start going up. Ultimate goal will be when we earn enough interest on savings that we can retire. Interim goal, try to beat the previous year's interest. Very optimistic goal, double last year's interest earned amount. We'll see what happens, but all in all I am quite happy about the progress we have already made. I feel we are on the right path.

I have been doing some research into the second question I had about pension savings, as discussed in my last post. I have found that it is better to contribute the maximum voluntary contributions to our employers'pension plans as the full contributions are tax exempt. WOOHOO!


I also need to make a correction, in the last post I mentioned we are taxed 38%, but if I take a look at BH's pay slip it looks more like 34%. I'll find out more from his next pay slip.

Even with just a 30% tax rate, that means we will be saving 420 EUR from his back paid contributions of 1400 EUR this month. Who does not like free money from the government, especially if it means you can save it?

The last couple of months BH and I have been focused on paying off our CC, with a goal of having it paid off by March. However just as that goal was within arms reach something came up. My BH's pension plan for his new job (new since August last year) has finally kicked in. This means that we need to back pay the monthly contributions for the last 7 months. As our pension savings are not very good for our age, we decided to pay the maximum voluntary contributions to play catch-up. This means we expect to pay a total of 1400 EUR this month to his pension. This is much more than we can afford to miss from his salary if we stick to the plan of paying off the CC by the end of March.

We have weighed out the budget and if we use the money we have stashed away in savings to pay off the CC to help pay the bills this month, we will be able to make it through to the next pay check. Hopefully we will also be able to keep our 1000 EUR emergency fund intact. The long term benefits of having that additional amount in his pension savings far out way the additional interest that we will have to pay on the CC ( about 20 Euros for the additional month).

Combined with his employer's contribution, that means his pension plan should receive a 2100 EUR boost in March. This will also mean that we would have already contributed a combined total of 2314 EUR to our pensions already in 2008. This will leave only 2486 EUR short of the goal for 2008.

This leads me to 2 questions that I have been trying to answer lately. The first is that due to my BH and mine's situation, should we save for our retirements based on the Dutch pension system or on the American pension system? This question is relevant for us as we both intend to move to the US to live eventually and because we will not be entitled to all the same benefits as Dutch people if we retire in the US. This question came up as I only realized we would not receive the same benefits recently.

As the Dutch pension’s savings schemes are calculated based on the Dutch retirement benefits model, much less personal savings are required for retirement income. However, if we do not receive the benefits, then we need to have saved ALOT more by now than we have actually saved for retirement (mini-freak out session). So I am currently adjusting my thinking to start saving as recommended by an American based retirement model.

Then the second question that has come up is whether I should be putting the additional retirement savings into a pension savings plan, or whether it would be better to save the money in a different way? I could open a trading account and have my bank invest the money saved up for retirement for us. I guess what might help us make the decision of whether we should be contributing more to the current employer pension plan or invest on our own would be what benefits the employer pension plan offers.

The plan is set up so that both the employee and the employer contributes a mandatory amount, then the employee is entitled to voluntarily contribute more up to a certain percentage of your gross salary. I am not sure yet if there is any tax relief on the voluntary contributions. I need to find this out as if there is tax relief, then the choice is already made for us. Considering we are currently taxed 38% of our earnings. However, if there is no tax relief, I ask myself whether it would be better to spread the risk and invest more of the voluntary contributions in a separate investing account with my bank.

As you can see I do not have the second question worked out yet, I still am lacking enough information to make an informed decision.

My BH and I were both paid on Friday, which means I have been able to transfer the amount I budgetted to pay off CC debt to our CC. 1200 EUR in total for this month ( roughly 350 of which was reflected in January's net worth update as that money was saved from January's budget and the rest shows on Feb's net worth report). This payment has meant we have surpassed 2 important (mini) goals that I had set for us.

1) Our total debt is now below 10,000 EUR

2) Our net worth is higher now that it has been since I started calculating it.

Both of these mini goals are not very spectacular in the grand scheme of things, but it makes me happy because I feel like we are definately moving in the right direction. It also makes me have hope that soon we would have a positive net worth.

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On another note, I found out today that the gas/electric company had already been by to read our meters. One of our neighbours must have let the meter person in to read our meters. I expect to hear from the company in mid-Feb, when they will send me the final bill for 2007-2008. I am hoping for some good news and that our monthly bills go down *fingers crossed*.

This year was the first year BH and I had to pay for gas and electricity, as in our previous apartment those costs were calculated as part of the rent. When we gave our initial readings through to the company, they carried out some calculations to estimate our annual usage and then based the monthly bills on those calculations. I know that we have used about half of the gas that they predicted (this is the most expensive part) and 3 times the amount of electricity (ouch, we definately need to re-assess this.), so I am really not sure which way the bills will go. It be nice to get some money back and have our monthly bills reduced, but I'm not sure. I'll just have to wait and see, at least I know now that the wait will not be for much longer.

BH was told today at work that he should expect a modest bonus in this month's pay package......but that was not the best thing about this news. The best thing was that as soon as he had mentioned how much he might expect, he added that it would all go to paying down our CC!!! That made me feel so good as I really feel we're starting to work from the same page.

We should both be paid this week (we both earn monthly salaries), and 5 days of vacation exchanged for pay from last year should be included in my pay check. So we should be waving goodbye to a sizeable chunk of our CC debt this month *fingers crossed*.

For the last year and a half I have been recording all our monthly bills at the beginning of each month in order to ensure that we put aside enough money to pay them. This year I am aiming to try and reduce our monthly bills. I have decided to list them on my blog for records sake and so that I may review any progress I make with them over this coming year.

Rent: 977.45 EUR
Gas and Electric: 148.08 EUR
Health insurance: 203.00 EUR
Telephone: 15.00 EUR
My cellphone: 19.50 EUR
BH's cellphone: 22.50 EUR
Personal property insurance: 13.00 EUR
Groceries: 200 EUR
Student loan payment: 63.11 EUR
Internet: 30 EUR
Train card for BH: 163.00 EUR
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Total monthly bills: 1854.64 EUR
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Rent should go up as of July 2008 due to an annual increment in line with inflation ( last year the rent went up an additional 13 EURs). As we pay an extremely good rent for our appartment, especially considering the area where we live, I do not see this changing much until we decide to buy.

Gas and electricity will start including water this year as well, however the water part will only be paid once a year and should be about 200 EUR. ( I will need to set up a monthly savings fund for this one). The gas and electricity bill I expect to go down by about 40 - 50 EURS this year, once we send in our actual meter readings for last year(finger's crossed).

Health insurance is going down in 2008 to 196.00 EUR per month. This includes both me and my BH. I have not adjusted the bill yet, as it is automatically deducted from my pay check every month and I will only know for certain how much it is then.

This year both of our cell phone contracts are finished. I want to keep my current phone, which I brought under the contract, and just start using pre-paid cards, as I barely use the phone except in emergencies. However, my BH does use his phone ALOT to call his family back home, so I expect we will either re-new his contract of if we find a better one deal, go for that.

I intend to upgrade my internet and I have not done this in 3 years!!! My BH recently found out that we could upgrade our account free of charge to a faster connection, but pay less per month. 23 EURs instead of 30 EURs. So once I have some time this week I am going in to upgrade our contract as it is in my name.

Well that's all the things I have thought of so far. Let's see how we're doing in a couple of months with these babies!

As I have emphasized in my previous posts, I am determined to pay off our CC debt by March. However, like most couples my BH and I have differing points of view when it comes down to how we spend or save our money.

When we first started living together, we could hardly ever discuss financial issues, as it would always end up in us fighting over mis-communications. Once we realised that BH was very nervous about discussing finances, as he had experienced various problems with them in the past and because of trust issues that existed between us, we were then able to build up a healthier manner of communicating about finance. We keep our finances in seperates accounts, however, I basically do all the bugeting and ensure that the right bills are paid at the right time etc. Any money that we do not need for bills is then up for discussion between the both of us.

Now, he likes to have nice things ( nice things = expensive, big brand name products), whereas I have always been a functional person who occasionally will splurge on nice things if there is the money for it. However, as we have been very strapped for money since we've been living together I have increasingly more brutal with my commitment to purchasing only functional items and reducing our monthly bills. However, I have been unable to say no to his wants and as I mentioned earlier, his wants can be quiet extravagant.

So finally, after months of talking to him about frugality, net worth, saving, investing and my financial goals, I have slowly started winning him over to the idea that we should be doing more with our money than spending it on immediate wants. However, there is still alot of work to be done, in the meantime I am trying to siphon the extra I can off of the top of our budget in order to achieve my financial goals for us.

This month, I have found that we have some money left over after all our bills, not as much as I was hoping as we have brought several items which were not budgeted for. As I have kept this extra money in my account, and he never looks at my account, he does not know. Infact I have lead him to believe that we are strapped for cash and even managed to say no to one of his wants this week, without caving and telling him about the money.

This puts me in the moral dilemma, as I would love to keep this extra money to pay off the CC, however I do not like to lie to my BH, nor deny him his wants if we can afford it.

I am absolutely determined to pay off our credit card debt as soon as possible and to maintain a zero balance on a month to month basis( in other words use the CC for purchases but pay it off in full each month). I have discussed this with my better half (BH) and we have agreed that we both want to be in a situation where we are ahead of our purchases, rather than constantly running behind them trying to catch them up, and never quite getting there.

I did a rough calculation of how much playing this silly game cost us last year and I am still reeling from the result. We carried a balance on our CC through out the entire year, which peaked at about 5,500 EUR and never fell below 1,800 EUR. Our CC has an interest rate of 17.5%. So we paid about 600 EUR in CC interest alone last year!!!!!

To put this amount in perspective, BH and I live in a one bedroom appartment and we pay about 688 EUR a month rent, so almost an entire's months rent for nothing. We have a scrubby second hand couch and I would love to buy new couches, which if I got a very cheap new 2 seater and 3 seater set, I would be looking at about 650-700 EUR. Instead we paid 600 EUR to Mr. Visa for nothing.

Oh, I do beg your pardon, the 600 EURs was not paid for nothing, it brought us the comfort of not having to be patient as we got some things we wanted quicker because we could buy them on credit, BUT it has delayed the purchase of my couches! It has cost us the peace of mind we would have if we had an extra month's rent sitting in the bank, plus interest!

So this year, I refuse to be impatient. Ths year I am going to pay off Mr. Visa and when I can afford it, we are going to get my couches and build our savings and laugh in the face of Mr. Visa and the oxymoron which is CREDIT card DEBT.

Although I have coming to this site religiously and hungrily gulping down all your posts, I have been avoiding posting as I have been ashamed.

In my original posts I was pretty certain that I would have managed to pay off my credit card by now, however due to life happening I was not able to do so and I did not want to mention it to all you people who are doing so well. It just puts me so much to shame. But as it is a new year and I am truely optimistic about this coming year I thought I'd start a fresh and write down the things I have been planning in my head for months.

My goals for 2008 are:

- Pay off my credit card once and for all (currently at 2109.14 EUR @ 17.5% --ouch!). I have a payment plan in place which should have this debt paid off by March'08, but I keep aiming for February. However. I know that this is a very optimistic goal and we are very unlikely to reach it.

- Add another 4800 EUR to our pensions and max out any additional contributions. In Holland pensions are set up differently to the states and we do have a much lower cap on how much we can contribute.

- Save at least 3000 EUR for long term savings.

- Add at least 2000 EUR to the current EF which is currently at 1000 EUR

- Keeping paying down my student loan with minimum payments as the rate is very lower (just above 3%). 8716 EUR currently and although this will keep me in debt for the next 14 years, I believe I will start paying it off quicker later, once I have managed to pay off my credit card and save up a bit for investing.

- Our net worth is currently at -5,650 EUR. My goals concerning this this year is to aim to increase it by at least 10,000 EUR.
My two step plan to do this is by decreasing our debt and increasing our savings. This co-incides with all the goals mentioned above and when calculated out would look like this:

Current Total Debt: 10,825 EUR
Minus
Credit card: 2109.14 EUR
Amount of paid off student loan excluding interest paid: 480 EUR
EOY Total Debt: 8235.86 EUR

Current Total Assets: 5,175 EUR
Minus
Pensions: 4800 EUR
Long term savings: 3000 EUR
EF: 2000 EUR
EOY Total Assets: 14,975 EUR

Assets - debt = net worth
Current: 5,175 EUR - 10,825 EUR = - 5,650 EUR
EOY: 14,975 EUR - 8235.86 EUR = 6,739.14 EUR

Diff. in net worth = 12,389.14 EUR

I believe with our current budget and annual income that this goal is attainable. We just both need to try and control our impulse spending. We managed to do this over Xmas. I think this last Xmas it the frugalist I've ever had, and we both enjoyed it tremendously. So we'll see how this goes. I still need to work out the fine details, but I do have some plans in mind to help reach this goal, which I'll detail in a later entry.

Well good luck to everyone in reaching your goals in 2008!