Thank you for the assessment regarding the home savings contracts. That’s what I feared.
So, in the end, only the balance minus the payout fee counts as equity – and until it’s needed, as an investment. Not only because of the interest but especially for me because of the employer’s contribution.
and you pay her employer’s contribution for the home savings contracts?
I have a mix-up regarding the home savings contracts.
The frozen one with a balance of €5,600 belongs to my wife. We froze it back then because her employer no longer contributed anything.
Mine is still running including the employer’s contribution.
And with €760 warm rent for four rooms and 110 sqm, I wouldn’t even think about wanting to build.
Well, the desire for a second child is there.
But rather not in the current apartment.
Since I work from home on average 4 days a week, I absolutely need one of the (children’s) rooms as an office. That might only be possible in the first few months with child 2.
And 5-room apartments are hard to get. Or rather, we have already checked, and both for 5-room apartments or houses (with 5 or more rooms) to rent, it would be significantly more expensive for us.
Hence the idea of building a house.
my tip: save save save and wait for the parental house, which you already partially own according to the land registry. if the time comes in a few years, move in and use the saved money to fix up the house or buy out the other half (whoever the second heir is). spending €350,000 now alone would be crazy.
Moving into the parental house (when the time comes) has always been my favorite option. I’d rather invest the money (equity + small loan) in converting the attic for offices and a nice kitchen/bathroom.
However, the fact is that we neither know when that will be nor do we want to wish for our grandfather not to be with us anymore. You don’t want to base your financial planning and living situation with two kids on living in the parental house in x years, and then the dear gentleman lives to a ripe old age.
And the time horizon for the second child is more like in the next 2-4 years.
On the one hand, first a career restart between the children, and on the other hand with 35-37 gradually completing the family.
why does she not earn anything, even though the child generates childcare costs? if you want a house, she has to contribute too. your salary alone is way too tight and risky. what if you fall ill?! as an office employee you are completely out after just a few years and never find anything again...
My wife was home for 2 years and 5 months.
Childcare costs only start from Nov 2015. Half-day care.
From then on, she will start looking for a job and aims to work part-time for 2 years.
Then another 2 years break for child 2 and start again at the dormant job (parental leave).
She can no longer take the job from the first parental leave because we moved back from Bavaria to our home region of North Hesse during parental leave.
I was able to transfer within the company and now commute once a week 170 km round trip and, as mentioned, work from home 4 times.
you always have to save up for a car and not save for 2 years after 9 years. what if you become unemployed after 9 years but need a new car?! you also have to factor in the maintenance costs of the vehicle immediately. in your case with insurance, gasoline, etc., you end up with fixed car costs of €500/month. anything else is wishful thinking.
The costs for the 2 cars are indeed as stated under the standard expenses. I reconstructed this from our records at spritmonitor.de as well as bank statements.
Only if my wife drives more than before because of a job did I forget to factor in a bit more.
[*]€180 Gas --> each of us refueled on average €85 per month over the last 12 months
[*]€105 Insurance --> We paid €1010 for 2015 for both fully comprehensive insurances. So there is even a buffer.
[*]€21 Tax --> €135 for the TT, €116 for the Touran
[*]€60 Reserves for maintenance --> €360 per vehicle per year. Inspection every 2 years for about €360 and in the long run maybe a little too little buffer for further repairs (€180 per year). We will then use the buffer from insurance
And I am aware of the point about reserves for new vehicles.
I mentioned that this should be saved away monthly when thinking about building a house.
As of today, that was not necessary because there is always €10-15k available on daily and savings accounts.
Together with the (quite low) estimated €100 reserve, I would already be at €466 car costs per month for 2 vehicles together with the above standard costs.
Not so far from your €500 after all.
I am aware that with €100 reserve per month, the TT can no longer be maintained. Once I drive only once a week, a small car will definitely suffice once the TT is “gone.”
At 9,000 km per year, that will take a bit longer. Consumption also remains moderate with moderate driving (average of the last 30 refuelings = 8L/100km), so it hardly makes sense to swap it for a small car now. Repairs are also limited so far.
cutting down your standard of living? how should that work with €500 for 3 people?!
We don’t intend to do that either. The €500 is to remain as it is and it fits. I plan our finances about 1 year in advance in Excel. And as you say, there is always a nice surplus at the end of the month, or due to forward-looking financial planning, I transfer everything not needed at the beginning of each month to the daily money account, better 1.2% interest than none at all.
By “cutting down,” I only meant things like vacation, consumption, car, or if you mean that in the section about risk provision: In case I can no longer work or should die.
pulling together your equity, someone who earns €3,000 net has to manage something like this
for a home loan, you are living beyond your means with your income situation,
if almost €800 per month is blown on vacations from the €3,000, then probably not.
I am aware that we "live large." It has worked wonderfully so far.
Otherwise, we wouldn’t always have €15k available short-term on daily/savings accounts, have over €10k per year left for vacation, and afford 2 vehicles costing about €30k each. The TT was 1 year old and financed over 4 years, the Touran was new and paid in cash.
In the calculation, I initially assumed that the luxury life would remain the same.
If it can’t work that way, which you confirm and I already knew, we obviously have to make a decision, that is clear to us.
We would have to save up more equity (especially through renouncing vacations and new car purchases…), save more permanently, or forego building a house.
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Your comments have already helped me a lot. There’s no point in sugar-coating things.
In the end, I was confirmed that the best idea is to wait for a possible move into the parental house and then rather invest quite some money there.
However, that still has to be reconciled with the child planning and my wife.
Possibly another move in between and, of course, stay in the current apartment for the next few years first. Child 2 will be earliest in 3 years.
However, I would still be interested in how it would behave with the aforementioned "inheritance" property including my wife’s mortgages if we were to build. What influence would that have on a loan?