Today, it’s Melanie’s turn (a blog reader) to come and talk to us about her story related to the FIRE (Financial Independence, Retire Early) movement and personal finance in Switzerland. She is 27 years old and comes from the canton of Neuchâtel. Enjoy reading!
It didn’t start by chance with the FIRE topic, it took an event.
My partner and I own a house and we have been talking for some time about building a garage for our cars. And frankly, it is not a luxury, because we live in the mountains and given the snow that falls…
So we asked the bank for a loan, and you know how it goes…
Between the summer vacations of our advisor, the vacations of the municipal administration…
The authorizations were long in coming.
But we had to make the decisions, because the raw materials for our construction were taking 12% every week. So we confirmed the order, and we had to advance large amounts of money.
We had some money saved, almost enough to pay for the entire garage without a loan. But we wouldn’t have had any francs left over, and we wanted to avoid this situation in case we had to deal with an unforeseen situation.
But we had to advance so much money, that we actually ended up at zero… well, almost.
CHF 70 left on our bank account…
Last September, at the very beginning of the month, each of us had only CHF 70.00 left in our account…
Of course, it was only for a little while, because we knew that our salaries would fall at the end of the month. But we both work almost an hour away from home, so we have to pay for gas.
By “luck”, I was sick that month.
A flu.
And given the symptoms, my employer would not allow me to return to the office, so I was able to work from home for 2 weeks (and hey, some savings).
We then thought about how to use all this money that is “sleeping”, Reka checks for gas, Coop and Cumulus points, gift vouchers, the credit limit of our joint account, and as a last resort the credit card.
That’s when I started doing research on the internet, on how to save money, the usual stupid stuff.
I came across a lot of really interesting blogs, including yours 😉. The more I read, the more I wanted to know!
I have started to apply a lot of tips, the first of which is the weekly menus, established in advance. This has allowed us to keep our food purchases to a minimum, as well as other expenses.
Not that we were big spenders, on the contrary, who can brag about having become a homeowner at 23 years old!… 😉
But we knew how to cut back even more. We’ve always lived simply, both of us coming from families that taught us the value of money. My parents never gave me pocket money, and I found side jobs from the age of 14.
Frugality as a new way of life
I had lost the habit of cooking our lunches, but now, it has become a real pleasure, and it is especially motivating knowing the savings we make. I challenge myself to find recipes with ingredients from the cupboard, it’s almost like a game! Even if I’m for sharing tasks, I rarely leave my place in the kitchen during the week!
After receiving our September salaries and our loan from the bank, we continued to apply our little frugal tricks in order to save a lot of money, and still do today.
My spouse is not very involved in the financial management of our accounts, not for lack of interest, let’s just say that he knows that I take care of everything, I’ve been managing everything for a few years now, (you know, my little side as an “employée de comm’”).
Switch to part-time? At 27 years old?!
While reading your blog, this little seed germinated in my head, I also wanted to get out of this infernal routine metro-work-sleep.
Being able to decrease my work rate would be great, although it seems weird to talk about it so early. At 27 years old!
So I looked into the stock market, and I opened my DEGIRO account 😄.
And I love it!
I continued on my way by opening a third pillar at Finpension!
Well, the period is not very favourable, and I immediately put my nerves to the test by going from drop to drop. But on all the good advice I read, I don’t sell anything, and on the contrary, I take advantage of the lower stock prices!
I also created my little excel spreadsheets to calculate my expenses, my income and thus calculate my monthly savings percentage (42.5% in May, a record!).
Managing money as a couple…
I also manage the joint account this way. We always had a tendency to go negative, and then have to compensate.
But now, with this way of managing, we manage to save each month to anticipate the big bills for the house expenses.
Concretely, we each pay a fixed sum (identical each month), according to our salaries. The goal is of course not to have to re-add money each month.
But for example, we will soon have to pay a large bill for the maintenance of a vehicle, and the money initially put in will not be enough to pay. So I divide the amount of the bill in two and each of us pays the determined amount in addition.
This is a way we use for extra-ordinary bills. For the routine maintenance of the house, there will be no need to proceed like that since we are slowly saving money in this account.
I also figured out how to get a few extra bucks, by taking online surveys, via Rabattcorner, myHelsana (that rewards me for the sport I do), my employer who reimburses me for part of my sports membership, etc. All means are good!
Some unused things were sleeping in our closets, I offered them a second life by selling them. Hop, in the common pot.
Well, it’s true, my partner often calls me a boho, and certainly finds me too radical at times, but I see that my way of reducing my expenses encourages him to do the same.
Besides, wasn’t he happy when I got him a 2nd hand T-shirt of his favorite brand for 1.40 CHF?
I know I have to learn to loosen up and understand that he manages his money as he sees fit, but still? What’s with all these little expenses on the joint account? haha!
Let’s be clear, I’m not touching my partner’s account, he doesn’t want to go down the same path as me (for the moment maybe), and that’s his choice.
Reflections on our next stage of life
Lately, I’ve been thinking more and more.
My job sometimes gets boring, even though I love what I do.
But the fact that I work for someone other than myself bothers me, and I can’t stand this routine anymore.
We often spend our evenings thinking about a business project, and I think this will be our next step.
By the end of the year, I should be at ~100k CHF net worth, unless more renovation work on the house comes up.
It’s going up slowly, but I’m glad when I factor in the house mortgage that I’m at that amount.
In detail, my net worth (only mine) is distributed like this at the end of May 2022:
- House ½: CHF 66'000 (Bank Cler)
- Private account: CHF 9'700 (Raiffeisen)
- Savings account: CHF 5'900 (Raiffeisen)
- Joint account ½: CHF 700 (Post, point to change quickly, given the costs…)
- 2nd pillar: CHF 16'000
- Pillar 3a: CHF 6'800 (Allianz and Finpension)
- Stock exchange: CHF 4'800 (réparti sur Raiffeisen Rio et Degiro, now that I’ve played around with Degiro and understood the concept, I’ll migrate everything there)
- Total: CHF 109'900
Going back to my calculations, I see that the calculation for the house was wrong, so I’m already over 100k CHF!
Let’s talk in 2-3 years to see if I will have exceeded the half million CHF! :D
My notes about Melanie’s story
Need a financial leader in the couple?
Melanie follows the same model as in the MP family: a leader, and a co-pilot.
From what I’ve seen since 2014, it’s often one of the two people in a couple that takes the issue by the horns when it comes to personal finance. And rarely both.
Considering the complementarities necessary for a couple to last in the long term, I think that it is perhaps totally normal from a psychological point of view.
In any case, if this is your case, I reassure you that you are not the only one in this case!
And if on the contrary in your couple you are both pilots of the subject, then I’m interested to have your feedback.
Psychologically strong!
I had the following thought while reading Melanie’s story:
Wow, that’s impressive! 27 years old, newly arrived in the stock market in the middle of a crash, and she buys without selling anything. No panic.
Frankly, I say hats off. Because when you invest 4% of all your savings in the stock market, and they melt like snow in the sun, I can tell you that there are more than one who would have stopped everything.
Anyway, she’s got the right mindset. It’s a sale during a stock market crash, so we buy as much as we can. And we don’t sell anything!
Successful couple finances: show, don’t tell
Melanie also makes perfect use of exemplification with her partner.
She says: “but I can see that the way I cut back on my expenses is encouraging him to do the same”
It reminded me of one of the human psychological traits that can make you rich or poor: “You are the average of the 5 people that surround you”.
Because humans are mimicking machines. So if your partner sees you doing something regularly, he will tend to imitate you in the long run.
Leading by example (rather than saying “do this or do that”) is the best strategy for getting your spouse on the path to financial independence and wealth.
Mustachianism and entrepreneurship
Finally, I made the connection with my last article when Melanie explained to me that she was no longer comfortable working for a boss. And that she would like to be her own boss.
One more story that confirms the adage that every self-respecting Mustachian is often a fearful and repressed entrepreneur ;)
And you, how does Melanie’s story inspire you?
