Spinne
2019-01-02 15:38:19
- #1
Hello everyone,
first of all, I am creating my thread here in this subforum because I couldn’t find a more suitable subforum.
I keep reading along in the forum, especially during the time when we ourselves were about to build or were building (~2.5 years ago). I would now like to address a topic and make a suggestion for this forum here, because in my eyes this topic is the be-all and end-all for every house construction and subsequently also for every healthy financial household.
Introduction
The topics I encounter most here are: Will it work out? Can we afford it? Are we overextending ourselves with the loan installment? Feasible/Realistic?,...
Many of these keywords concern the construction project itself but also the monthly loan burden. And this is exactly where I want to start with my topic.
Monthly loan burden, how much can we afford?
I fully understand that many people here in the forum seek the opinion of others in this question (that’s what a forum is for), but above all this one specific question can only be answered 100% by the person who asks it.
About me/us
She is 26 and he is 27. We have a small daughter and expect our next child in spring.
We have been together for over 11 years now and moved into our first shared apartment when we were 17 and 19, respectively. A few years later, after she had finished her training as a nurse, we moved into a rented townhouse. At that time I was still studying business administration at a university of economics. Our daughter was born right on time for my bachelor’s degree. Only one year later we started building our house (at that time we were 23 and 25).
Now, ~2 years after we moved into the house, we expect our second child.
(One thing aside, please do not start a fundamental discussion about whether one should have a child or even two or build a house at such a young age. For us it always fit. Everyone has to honestly answer this question for themselves.)
Main part
However, these steps were always preceded by a fundamental question: What can we afford, how do we manage the years when she is on parental leave, etc.?
And this question can only be answered individually. One tool that helped us and still helps is keeping a household budget book.
We believe that a household budget book is essential to approach projects such as housebuilding with the best knowledge and conscience.
Of course, one can also print out a bank statement at the end of each month and see how much is left. However, in some professions there is also "money" that does not run through the bank account, e.g., tips, meal vouchers. Or those that are transferred to the bank account but are not a fixed part of the income: bonus payments.
Therefore, it is all the more important to keep a household budget book and keep every receipt, no matter how small (chewing gum purchased), and then enter it into a classic household book or an Excel file. (there are also apps for this). This way you have the exact income and expenses at the end of the month.
This already provides a very good overview of the monthly financial situation, enabling further planning.
Fixed net household income (excluding 13th and 14th month salary in Austria, in Germany as far as I know only the 13th exists)
- fixed costs
- variable costs
= monthly available money
- reserves for other incurred costs (% rate or 1-2€ per m² depending on the building condition)
= monthly savings rate
Now one has a basis to calculate with. Let’s look at an example:
4000 (net household income) (no children)
- 1400 fixed costs (including 800€ cold rent)
- 1300 variable costs
= 1300
- reserves 200 (5% of net household income)
= 1100€ monthly savings rate
Theoretically, simplified, one could now pay back a loan of 1900€ monthly, assuming the life situation does not change, i.e., no children, etc.
However, there is a gross error in this thinking, because of these 1100€ you also have to pay for gifts, holidays, investments (e.g., a new car, etc.). The 13th or 13th and 14th monthly salary help here, but alone that is usually not enough.
Therefore, we expand our cost breakdown by additional items:
Fixed net household income (excluding 13th and 14th monthly salary in Austria, in Germany to my knowledge only the 13th)
- fixed costs
- variable costs
= monthly available money
- reserves for other incurred costs (% rate or 1-2€ per m² depending on the building condition)
= monthly savings rate
+ 13th + 14th monthly salary
- reserves for gifts
- reserves for holidays
- reserves for investments
- reserves for xy
= actually available money
It should be noted again to always calculate without bonus payments, tips, etc., as these are not fixed and usually can disappear overnight.
I could go into more detail, especially about the household book topic (e.g., further advantages, dividing costs into categories like groceries, clothing, mobility, etc.) but that would go beyond the scope here.
What do I want to get at?
What one can clearly see from the example above in my opinion is that it is not so easy to determine what one (if one still wants to live, i.e., treat oneself sometimes, go on 2 vacations per year, etc.) actually has available monthly to accurately answer the question "How much loan can I afford?".
Besides the household book, there are many other topic areas such as
For all these points I have not yet found a suitable subforum here in the housebuilding forum.
Therefore, my approach would be to create a subforum which revolves around "Finance/Wealth". But it should not only deal with the main topic here in the forum, i.e., housebuilding.
It should be much more about general finances: How do I maintain a certain standard of living without losing much quality of life but having more money in my pocket? How do I get through difficult times? How do I build wealth on the side? How do I sensibly invest the money I received, for example, from bonus payments, without spending it entirely on consumer goods? How do I plan the household budget for the year 2019? etc.
The more aware you are and the more you deal with it, the better you can in my opinion plan a house build, or even more importantly, live the dream house long term!
If this topic interests many and receives support, it could be created as a subforum as I suggested. A suitable title for it would still have to be found. My first suggestion would be "Finance/Wealth". But there are more creative people here in the forum who could capture the topic much better in 1-2 words ;)
If you can't get anything out of it at all, or think it’s completely nonsense, then please also provide a brief explanation of why you see it that way.
Thanks and best regards
Spinne
first of all, I am creating my thread here in this subforum because I couldn’t find a more suitable subforum.
I keep reading along in the forum, especially during the time when we ourselves were about to build or were building (~2.5 years ago). I would now like to address a topic and make a suggestion for this forum here, because in my eyes this topic is the be-all and end-all for every house construction and subsequently also for every healthy financial household.
Introduction
The topics I encounter most here are: Will it work out? Can we afford it? Are we overextending ourselves with the loan installment? Feasible/Realistic?,...
Many of these keywords concern the construction project itself but also the monthly loan burden. And this is exactly where I want to start with my topic.
Monthly loan burden, how much can we afford?
I fully understand that many people here in the forum seek the opinion of others in this question (that’s what a forum is for), but above all this one specific question can only be answered 100% by the person who asks it.
About me/us
She is 26 and he is 27. We have a small daughter and expect our next child in spring.
We have been together for over 11 years now and moved into our first shared apartment when we were 17 and 19, respectively. A few years later, after she had finished her training as a nurse, we moved into a rented townhouse. At that time I was still studying business administration at a university of economics. Our daughter was born right on time for my bachelor’s degree. Only one year later we started building our house (at that time we were 23 and 25).
Now, ~2 years after we moved into the house, we expect our second child.
(One thing aside, please do not start a fundamental discussion about whether one should have a child or even two or build a house at such a young age. For us it always fit. Everyone has to honestly answer this question for themselves.)
Main part
However, these steps were always preceded by a fundamental question: What can we afford, how do we manage the years when she is on parental leave, etc.?
And this question can only be answered individually. One tool that helped us and still helps is keeping a household budget book.
We believe that a household budget book is essential to approach projects such as housebuilding with the best knowledge and conscience.
Of course, one can also print out a bank statement at the end of each month and see how much is left. However, in some professions there is also "money" that does not run through the bank account, e.g., tips, meal vouchers. Or those that are transferred to the bank account but are not a fixed part of the income: bonus payments.
Therefore, it is all the more important to keep a household budget book and keep every receipt, no matter how small (chewing gum purchased), and then enter it into a classic household book or an Excel file. (there are also apps for this). This way you have the exact income and expenses at the end of the month.
This already provides a very good overview of the monthly financial situation, enabling further planning.
Fixed net household income (excluding 13th and 14th month salary in Austria, in Germany as far as I know only the 13th exists)
- fixed costs
- variable costs
= monthly available money
- reserves for other incurred costs (% rate or 1-2€ per m² depending on the building condition)
= monthly savings rate
Now one has a basis to calculate with. Let’s look at an example:
4000 (net household income) (no children)
- 1400 fixed costs (including 800€ cold rent)
- 1300 variable costs
= 1300
- reserves 200 (5% of net household income)
= 1100€ monthly savings rate
Theoretically, simplified, one could now pay back a loan of 1900€ monthly, assuming the life situation does not change, i.e., no children, etc.
However, there is a gross error in this thinking, because of these 1100€ you also have to pay for gifts, holidays, investments (e.g., a new car, etc.). The 13th or 13th and 14th monthly salary help here, but alone that is usually not enough.
Therefore, we expand our cost breakdown by additional items:
Fixed net household income (excluding 13th and 14th monthly salary in Austria, in Germany to my knowledge only the 13th)
- fixed costs
- variable costs
= monthly available money
- reserves for other incurred costs (% rate or 1-2€ per m² depending on the building condition)
= monthly savings rate
+ 13th + 14th monthly salary
- reserves for gifts
- reserves for holidays
- reserves for investments
- reserves for xy
= actually available money
It should be noted again to always calculate without bonus payments, tips, etc., as these are not fixed and usually can disappear overnight.
I could go into more detail, especially about the household book topic (e.g., further advantages, dividing costs into categories like groceries, clothing, mobility, etc.) but that would go beyond the scope here.
What do I want to get at?
What one can clearly see from the example above in my opinion is that it is not so easy to determine what one (if one still wants to live, i.e., treat oneself sometimes, go on 2 vacations per year, etc.) actually has available monthly to accurately answer the question "How much loan can I afford?".
Besides the household book, there are many other topic areas such as
[*]Being financially more independent
[*]Building wealth
[*]Investing saved money
[*]Managing well during certain life situations (e.g., parental leave)
[*]Insurances
[*]etc.
For all these points I have not yet found a suitable subforum here in the housebuilding forum.
Therefore, my approach would be to create a subforum which revolves around "Finance/Wealth". But it should not only deal with the main topic here in the forum, i.e., housebuilding.
It should be much more about general finances: How do I maintain a certain standard of living without losing much quality of life but having more money in my pocket? How do I get through difficult times? How do I build wealth on the side? How do I sensibly invest the money I received, for example, from bonus payments, without spending it entirely on consumer goods? How do I plan the household budget for the year 2019? etc.
The more aware you are and the more you deal with it, the better you can in my opinion plan a house build, or even more importantly, live the dream house long term!
If this topic interests many and receives support, it could be created as a subforum as I suggested. A suitable title for it would still have to be found. My first suggestion would be "Finance/Wealth". But there are more creative people here in the forum who could capture the topic much better in 1-2 words ;)
If you can't get anything out of it at all, or think it’s completely nonsense, then please also provide a brief explanation of why you see it that way.
Thanks and best regards
Spinne