I find the attitude towards financing very healthy and well thought out. The 1/3 rule is more something you need when you lack such an overview and require very simple rules to structure yourself. It can often be the right course of action, but here I don't see it as mandatory.
My gut says that 2.5k should be the maximum one allows themselves. Gut, mind you, not a calculation.
Thanks for the assessment. I also think the 1/3 rule is okay as an initial rule of thumb, but it depends on the concrete situation then.
- Very nicely and detailedly presented.
- Have you somehow considered that your wife might stay home for several years? Mine also wanted to work again soon but just couldn’t bring herself to leave the kids in daycare.
- With your net salary of just under €5,000, a rate of €2,500 is too much; if it is only for a temporary period then you can do it once in a while. But that assumes the job can be continued after parental leave and that you get a childcare spot. That is not always guaranteed even in rural areas.
- Why are you building up >€1,000 in reserves? It’s certainly good to have something like that but maybe a bit much right after building. Or are you saving for something specific?
- EVERYONE I know has underestimated long commutes (starting from 30-40 minutes one way) and quickly found it to be torturous and a waste of time, especially if there is the risk of traffic jams and delays. Plus the fuel money which runs through your fingers like water. Is there any way for you not to have to do that until retirement?
- I don’t want to paint every horror scenario, but: You want to build in the countryside to start a family there and accept some cutbacks for that. Unfortunately, I know some couples who have been trying to have a child for over 3 years. Some of them with poor prospects. Building a house with a child is more difficult but at least you have the “foundation” why you are building in the first place. You should at least clarify that internally.
In summary, though, it doesn’t look bad. There is always some risk. The proximity to family including childcare by relatives is a huge plus that also drew us from the big city to the countryside.
Thanks first of all!
- My fiancée had a period without a job after university and found it terrible. Since she would also like to switch to a remote job, she firmly assumes that she will not be without a job for several years. Of course, it would be better if only I had to pay the rate...
- Childcare spots in the local community are no problem at all.
- We are not saving for anything specific. The assumed reserve was set more out of pure caution so that you have something to fall back on.
- Commuting is annoying, true. However, with home office and weekly meeting duty I will only have to commute 30 km 2-3 days a week. In addition, I’m eyeing a position in the city 10 km away. You just have to wait until something becomes available.
- We definitely don’t want to build the house because of “starting a family.” For a long time, we didn’t even know if we really want children. If it doesn’t happen, it would be a pity, but... how shall I say it pleasantly... okay for us. But we definitely want to build.
- The proximity to family is what draws us back home so much. We have been “not very much at home” for over 10 years now and are increasingly noticing that we want more connections again.
I find a rate of €2,500 completely okay with that income.
The 1/3 rule is just a guideline that cannot simply be applied to every income.
A family with an income of €5,000 can spend €1,650 per month on the rate according to the rule. That leaves €3,350 for additional costs and living expenses. With an income of €6,000 and a rate of €2,500, €3,500 remain.
Assuming we are talking about the same house and the same additional costs, the family with €6,000 income has despite a rate of almost 42% of the household income a living standard higher by €150 than the family with €5,000 income which follows the 1/3 rule.
The only thing that in my opinion must be taken into account with such a rate is the income distribution. At 50:50 it becomes critical with parental leave, etc. Since the distribution here is clearly one-sided, parental leave can also be well bridged by parental allowance and child benefit.
Thanks to you, too, for the assessment! I also think with the uneven distribution we are less vulnerable.