Where are we going wrong economically?

[Threebear]

Young family (35f + 37m + 1 child 4y), living in an expensive European country. Income is 4700€ net per month + any income from a newly formed business (many months of 300€, occasional months of 2000-3000€). Averaging at 5500€/month over a year although there is no guarantee, the only guarantee is our 4700€ income.

Living costs per month (many of these clearly go up and down by month ergo holidays / presents / expenses, but overall the averages over 12 month periods are as so :

HOUSING:
1600€ mortgage
300€ community fees (bloody expensive we’re aware but nothing to be done)
300€ heating, water, phone, electric, Netflix and Disney tv

FOOD:
700€ food supermarkets
150€ eating out
100€ alcohol, drinks in bars etc

CARS:
100€ petrol
250€ insurance and mechanic work etc for 3 vehicles (2 oldish cash bought cars + 1 old Campervan)

EXTRAS per month average:

100€ food and vet bills for 2 large dogs

150€ presents (Christmas and birthdays)

500€ holidays (1 big 3 week trip to tropics + 2-4 weeks camping in own camper)

150€ healthcare (this isn’t private, this is dental and therapy and medications)

300€ purchases (including everything and more : business fees, parking, clothes, local passes, parking or speeding fines etc.)

200€ kid expenditure including holiday clubs for 6 weeks a year approx.

TOTAL = 4900€

As I hope is clear I keep a very detailed excel of our expenses. We are living day to day and we cannot see where we can cut costs easily which may sound laughable but allow me to explain..

Our holiday expenditure seems high clearly, however it is our 1 desire, not wait until retirement to enjoy our life and see the world. We love to travel, we love our Campervan, and we absolutely love that we can take many weeks a year with our child while he’s young to show him the world whether camping in southern Europe cheaply or travelling further afield (trying to be cheap in places like India or Thailand but always ends up over budget as though we’ve been vacationing in the USA which we do not ).

Bar this I cannot actually see where and what we could cut. For that reason I wondered if it might be useful to hear from other people/families in similar salary ranges, to know their expenditure and where they have managed to cut corners during times of inflation.

In reality our home costs us a huge amount but it is a dream. It needs a full redo and we don’t have a penny to spare to do so but the purchase was necessary and never in a million years would we give it up. It’s only 120m2 with small outdoor space but as I mention it’s an expensive country. Moving countries isn’t an option at all although we have considered it time and time again. Finding this quality of life is hard to come by.

We have 3 vehicles. The camper is clearly not necessary but sadly the 2 cars are for business / work and hobby reasons. If we give up the camper we save maybe 1000€ a year but no doubt would quickly swallow that back in extra holiday expenses. The Campervan over time is cost friendly and so worth it. Our vehicles are all cash bought, but they’re all getting old and due to climate we live in get older quicker. We cannot afford to get newer vehicles.

We purchase the most basic of clothes for ourselves once holes appear in the used ones. We buy presents that are useful ergo to avoid expenditure over year (bike for birthday, skis for Christmas, winter jacket as main present for each other etc etc).

The reality is we need minimum 1000€ to save/invest at this point in our lives. If business goes well then great but if it doesn’t I am terrified to find myself mid forties with nothing but a lovely home to show for it.

Luckily retirement is settled for us as both come from families that did ok during the 80s and 90s meaning we will inherit more than enough to retire at 65 comfortably. Previous to this our existence is just month to month however and we do not trust the world economy or politics now to be ok without our own savings being built monthly.

Many thanks for any comments on how you would personally cut expenditure on this budget.

@Threebear im starting to get confused? Was it not advice and opinion you looked for? Everyone is telling where you are going wrong but you are defending? Why did you ask?

I live in an expensive EU country. We don't have anywhere near such high housing costs, even when we were renting here. For that size of place I guess you live in a highly desirable area.

You have many costs that you don't want to budge on, but that is the only way to make cuts.

As said above - the presents are really high. I don't get the bike thing as DC would have a decent bike to use everyday for school and I don't think we've ever spent more than 200€ on one - and those are adult-sized. But, he just cycle commutes everyday, no special clubs. If he got a 2nd or 3rd hand bike for 100€ at age 4 that would have been a Christmas present and he might have got a couple of books or something smaller to go with it.

That is one example of where I think you are living the lifestyle you want (and nothing wrong with that) but now you also want to secure a financial future. Those two are really trick to match up unless you have a higher income. And as that is your net monthly income, you are already raking it in compared to the average household income (assuming you are in a high tax country).

As said above, absolutely do not rely on any inheritance unless your parents are currently ill and likely to die soon. More likely they will live another 20+ years and need several years of expensive care. We're currently at the age where friends' parents are dying and not one has had any inheritance to speak of. Mostly, houses are sold to pay for care homes or daily carers, or the parents have spent a lot in their active retirement. You wouldn't want your parents to restrict their lifestyle for your financial future I'm sure.

Again, as said above, what do you want people to say? You can make cuts in your expenditure fairly easily, but if you are not willing to do that, then the only other option is to make more money (and be grateful you are both working, all healthy and can lead a very nice, comfortable life right now)

Easy! No EUR6000 holiday per year. We are similarly set up in Spain with a 4yr old and get by on a lot less. We try to visit family back home and stay for free with the bonus of letting our lo connect with family - much more valuable at this age than seeing elephants or waterfalls which will also be there when grandparents are long gone and the window to bond with cousins has passed due to universities etc. Especially with a camper van expense you should be using that for the 3 week trip if you don't want to see the ones who will provide your inheritance. Taking a 4yr old to India is not just pointless from a memories point of view but also a potential health hazard/medic bills.

Would also say 2 vehicles not 3. We have just one and if we need extra wheels we uber or bolt ad hoc although I do wfh most of the time. As someone said a smaller camper/daily commute van could be a good option in your situation. As for food shop I don't know if you could buy more alcohol in the supermarket and drink at home as seems a lot to spend in pubs in mainland Europe. The shopping bill can also be reduced by eating less meat and more plants. We spend bout eur 500 a month and eat a longevity diet. Also I think 300 eur for parking fines and speeding fines and a few other items should be something you can reduce by sticking to prevailing regulations. Perhaps you also don't need Disney AND Netflix? We cut one out after a review of both options.

Good luck!

OP has it been mentioned yet that could substitute? Have smaller treats more often is what I would recommend. Shorten your holidays by a couple of days each time, but have a treat at home or a nice drink. You'll still spend less. If going to a bar is important I suppose trying nice drinks at home won't cut it, but for me it would. Same for eating out. Instead of eating out, I try a dinner from M&S. I still do all these things, but less often. I mix in a lot of other stuff and I feel like I live well and am having lots of treats. But I end up saving so much money. I would really suggest to get your holidays down from the pedestal and have more, smaller, inexpensive treats throughout the year so you aren't so desperate for these breaks that you feel you can't compromise on them.

Keep doing the things you like, but less often. So, big holiday every other year rather than every year. Eat out half as much as you do now.

You might even enjoy the things more if you have had to wait for them. I hadn't been able to travel outside my home country for 10 years, due to a health condition. Now I'm on a package holiday and am unreasonably delighted by the novelty of it!

And to add a few more points, should have first said congrats on laying out your expenses in excel to get a handle on them. That's the first step.

Another approach could be to add all the totally non discretionary items (mortgage, service charge etc) and then see what % you need to cut from the other items to get to your desired savings per month. Fwiw I think it should be more like a eur500 target per month to start and then you can increase the amt when you feel ready. Also worth shopping around for better deals on current expenses. Eg we are rolling off a 1y Internet offer and will now threaten to change providers. Same in a few months when electricity deal expires, etc. Some of these include Netflix or Disney for 1yr so you can save like that. Maybe you can get a better deal on insurance?

All the best!

As many are asking what’s the point I’ll try and explain.

I am fully aware clearly we have high extra expenditure especially on holidays which seems to be the bulk of advice. I think part of me wondered if it really was a lot vs our income and wanted to confirm this on a public board, clearly it is and I now have clear no holiday for 2026 bar van travel. furthermore, holiday budget will now be cut in 2 and for 2-3 years.

Thanks to all the great advice I’ve now got a clear vision of what to do in other areas which will begin with a 3 month trial starting with food and drink budgeting. Meaning eating out (which in reality is only takeaways), from once a week to once every 2 weeks. Food I will go to a hyper market 40 min drive away and trial that for a month to see if we can bring down the budget to say 500 instead of 700. If not we simply buy in cash from now on and make it last to keep in budget.

Presents I doubt we’ll change as I didn’t realize it was a non negotiable for me until reading all this and realizing in the process my own feelings towards it. I do love a nice Christmas I’ll admit.

Asking for advice not because I am an incompetent person economically, rather I just don’t know how our expenditure compared to other families on similar budgets.

To make clear, the miscellaneous expenditure includes 1 fine over 3 years, and all our adult clothes, and bits bought that aren’t presented to each other over festivities. The bulk of this is clearly just random bills that aren’t household, maybe a toy for my dog and a pair of jeans for winter. The bulk is NOt in fines for speeding 😅.

For the person who insinuates and insults me by suggesting for asking for public advice of where and what others would do in my shoes, that I am incompetent to run a business. This is not the truth, this is a free insult and therefore trolling me for no apartment reason so I keep with my comment made.

The poster didn't say anything that isn't true.

@Threebear - a very mature response to some horrible comments on here. Try not to respond to the ones who are berating you and take the good bits from those who are actually making useful suggestions. For example you are clearly not economically incompetent as you are going through this budgeting exercise. It's very tempting to go on an expensive holiday that was fine before kids, but we have ourselves concluded Thailand, Bali, South America etc are off the menu until DC is at least 8 in favour of spending time with elderly parents and cousins with children. It's also nice you've realised presents are really important to you. Sounds a sweet family tradition around Xmas. Good luck with everything and I hope you can find ways to save from all the advice on here!

It’s the travel. I also have children that i want to show the world too, but we genuinely prefer not living day to day. We generally do a European city break once a year (from the uk) and a uk holiday, plus some shorter camping/youth hostelling trips.

Travel is costing you €6000/year; it’s a luxury you can’t really afford.

Sorry, I see that you’ve worked through this now.

Do you really need 3 vehicles though?

I understand you came here for advice, but these kinds of threads rarely end well. The thing is, your spending feels essential to you, so when people start suggesting what to cut, it naturally feels a bit personal. For example, my family has a completely different setup of needs and wants, and I could probably squeeze that extra £1,000 out of your budget easily
but I’m not going to tell you to do this or that, you silly person, because a) I don’t want to offend you and b) it’s not actually helpful.
Someone recently mentioned the Rebel Finance School on one of the pension threads. It’s a free 10-week course on YouTube, run by a couple who reached financial independence and talk a lot about saving and building wealth. In their words, the key is to increase the “gap” between what you earn and how you spend and they share plenty of practical advice on how to do so.
I’ve been binge-watching their videos and I’m halfway through. Found it genuinely useful and quite an eye-opener, actually.
Wishing you all the best and that you find that £1,000 a month you need to save!

This is good advice. I have a small, economic van for everything- work (often need to carry ladders, sheets of plywood etc), child taxi and camper. I converted it myself, which saves an astounding amount of money. It's not big enough for a family (when we go camping I make the DC sleep in tents mwahaha), but a slightly larger van would be. I see a lot of tanks VW Transporters doing the school run.

I have a similar household income to you OP and you live a heck of a lot more extravagantly than I do - that’s not to say I feel hard done by because I don’t …. In fact I grew up poor so my income makes me feel very rich now !

But you do seem to be living a champagne lifestyle on a Prosecco income - so to speak.

My mortgage is approx 10% of household income , then food is 30% , bills 20% savings 15% the other 25% is disposable/hols/xmas etc.

It’s good you are looking at budgets now and planning adjustments accordingly. You won’t be any worse off but planning your budget ahead will help you feel more in control

Also, if and when you do need a new vehicle could you swap to electric? Much cheaper to run. Do you have access to a charger?

And have either Netflix or Disney Plus (swap over from time to time).

No we don’t, but the car that needs dumping is my partners and he refuses 😅, he didn’t learn to drive until 30 years old so he very attached to the sensation of freedom it gives him. Sadly can’t do a lot. The camper could go and be switched with a van and his car sold, but we live in a place that does not have a normal second hand car market so a switch over would cost us 20.000€ extra with big loss made on sale of camper, and obviously don’t have the funds. It’s hard to explain without saying where we live but I would rather not make public.

Wow amazingly done, congrats! I think our backgrounds have a huge affect on how we end of expenditure wise as adults. I grew up very privileged (business owner father, STAH mum, private schools, beautiful homes, holidays to the states yearly) and I imagine most of my habits are just a continuation of this / for lack of ever having economic worries in family. I am living like I’m middle class in the 90s and it’s that that I need to settle in my head. As many have said either earn more or stop kidding myself 🥲

I imagine most of my habits are just a continuation of this / for lack of ever having economic worries in family. I am living like I’m middle class in the 90s and it’s that that I need to settle in my head

I think that is exactly it - nail on head ! Good luck OP, you’ve got this !

Quite honestly your income is low for your mortgage and bills, and you’re living a very expensive lifestyle. Our income is higher and we don’t spend nearly as much on everything that you’re spending on. There’s probably not much you can do about your mortgage, but the amount you spend on presents, holidays, alcohol/bars and extras like expensive bikes for your DC are all very high and luxuries that you could cut down on. It definitely ends how much you want to save and invest really.

Where we live 1600€ will get you a nice 1 bedroom 45m2 to rent. I bought at a good time and so came with a big cash deposit for purchase of this home, so that’s with a 50% down payment. You can imagine the cost with 10-20% down so a regular family apartment… nothing can be done on that front no 🥲