Special repayment, saving or consumption?

2020-02-03 08:29:02

Special repayment. I have no time for consumption

And you don’t have a wife who has time for consumption either?

2020-02-03 08:37:19

Maybe one should first define consumption. Does everyone have the same understanding of it? For example, we really like traveling and taking long-distance trips, which cost around 5,000 per vacation. We could also use the money to make special repayments, but the experiences and memories are priceless. There is a number in the bank account, which doesn’t interest me. Pictures of the vacations hang on the wall and bring a smile to my face every day.

We have reduced consumption in the form of always having the newest iPhones and so on. That doesn’t bring happiness and is superfluous.

Only my sports car, I treat myself to it as a horsepower junkie

Consumption for us means everything non-essential or things not needed for daily life. In other words, car = doesn’t matter as long as it gets us to work, everything beyond that = luxury consumer good. I initially paid off the apartment way too conservatively (4.25%) and then went straight up to the maximum of 10%. Still, I was able to make the 5% annual special repayments. Simply completely misjudged or did not foresee salary development either for me or my wife correctly. Since no children are planned, we could put 5k aside every month. But I will reinvest it directly instead of consuming wastefully. Otherwise, at some point the apartment will be full of things that do not make us happier. However, we will definitely expand vacations, although honestly time is more the limiting factor here.

2020-02-03 09:54:54

Consumption for us means everything that is not essential to life or things that are not needed for daily life. In other words, car = doesn't matter as long as it gets us to work, everything beyond that = luxury consumption good
At the beginning, I paid off the apartment much too conservatively (4.25%) and then went straight up to the maximum of 10%. Still, I was able to make an additional repayment of 5% annually. Simply completely misjudged or did not foresee the salary development neither for me nor for my wife. Since no children are planned, we could set aside 5k every month. But I will reinvest it directly instead of consuming it senselessly. Otherwise, at some point, the apartment will be full of things that do not make us happier. However, we will definitely extend vacations, although honestly the limiting factor here is more the time.

Apart from the fact that you apparently move in financial spheres that exceed 90% of the population (otherwise I cannot explain a savings rate of €5k/month alongside the usual living expenses despite 10% repayment.)
I would much rather start to consider whether I could reduce my working hours a bit.
That way, a middle ground could be found between financial sacrifices and more time, which then should no longer be the limiting factor mentioned for vacations.

2020-02-03 10:03:08

Yes, we had already thought about it. Unfortunately, my wife cannot reduce her hours and I don't want to at the moment. And yes, we could also buy a house, but we don't want to at the moment. We are still young, so that could definitely change.

Edit: the apartment cost us a total of 195k, so 10% is just under 1400€.

2020-02-03 10:21:17

I feel the same as , I am currently still "working" on the aftermath of building a house, moving, kitchen renovation – in the final stretch quite a few things piled up and for the next 1-2 years I will have to make sure that the "everyday finances" stabilize properly again. That's why I try to avoid "unnecessary" expenses.

Consumption, or rather "luxury" in this context, would be anything beyond the necessary for me. If I have 10 sweaters in the closet and that's enough to wear, and I buy the eleventh... then that is dispensable and therefore luxury. Some consumption/luxury is still justified though, e.g. the winter holiday with the kids.

2020-02-03 11:09:16

You also have to be allowed to live. Otherwise, you have exactly achieved what we always warn against in the financing threads: working only for the house. Aside from that, the debt is scandalously cheap. I would most like to reduce the ongoing repayment, but our contract does not allow it.

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Special repayment, saving or consumption?

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