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The budget breakdown of a 26-year-old Sr. Frontend SWE in Germany on $13K a monthFeatured

Posted in:Advice Compensation Lifestyle Money

The Budget Breakdown aims to broaden the conversation on money and offer insights into various approaches to spending, saving, and investing.

✨ Want to share your monthly budget breakdown with us? Please fill out this form here and we will get back to you (can be posted anonymously like this one 😉).

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💰 Income

Monthly Net Income: $13,620 (joint household income with partner)

🏡 Monthly Fixed Expenses (shared with partner)

Mortgage: $2,719

Utilities (Electricity, Water, Gas): $427

Internet: $65

Car payment and gas: $937

Home and car insurance: $308

Student Loans: $131

App subscriptions, Prime, credit card fees, and budgeting software: $77

🛒 Monthly Variable Expenses (shared with partner)

Groceries: $515

Eating Out (Restaurants, Bars): $110

Entertainment (Movies, Events, Hobbies): $300

Clothing: $150

Personal Care: $125

Travel: $2,200 (we do lots of traveling around Europe)

Other: $120 partner’s work expenses

💸 Monthly Savings and Investments (shared with partner)

Emergency Fund Contributions: $620

Retirement Savings (401(k)/Pension, IRA/Roth IRA): $1,770 (comes out before my partner gets his paycheck, so not coming from net income)

Investments (Stocks, Bonds, Mutual Funds, Real Estate): $3,220

🎁 Monthly miscellaneous (shared with partner)

Pet Care: $200 for our two cats

Therapy & gym membership: $350

Home (furniture, etc.): $1,700

⚖️ Final balance (shared with partner)

Total income: $13,620

Total expenses: $12,074

Final balance: $1,546

We do zero-based budgeting, so all extra money either flexes to categories we spent more on that month, towards sinking funds like saving for a new car, or to build up the emergency fund, which we’re still working on.

💭 Money Reflections

1. How much does tracking your personal finances influence your spending, saving, and investing habits?

I grew up pretty poor, so my natural tendency is to hoard all the money I make (not even investing for retirement) and not spend money on anything fun since it isn’t a “need”. Tracking my personal finances has actually helped me spend more because I know that we have our bases covered with emergency funds, investing for retirement, and saving for all expenses so nothing ever catches us by surprise.

2. Is there anything you wish you would spend less money on?

Classic new homeowner expenses - I wish we didn’t spend so much on furniture and home items.

3. What do you consider important to spend money on?

While I’m living in Europe, it’s really important for me to spend money on travel and vacations. I won’t be here for long, and when I’m back in the US it will be much more expensive to travel to Europe.

4. Do you have any short-term or long-term financial goals?

Short-term goal is to increase my retirement savings to 25% of my gross income. I’m at ~20% right now. I also want to have my car paid off in the next two years (or else I can’t send it back to the US!). My only long-term goal is to feel comfortable. I want to have enough in investments that I can take breaks from working if I want, and travel without worrying about costs.

5. What was your relationship with money like growing up? Did you talk about it with your parents/caregivers?

Money was a big issue growing up. My parents were under a lot of stress trying to make things work, and they would always tell me and my siblings that we couldn’t afford things, so we were very aware of the financial issues we were facing. This made my relationship with money insecure, which is something that I’m still working on.

6. Did you receive any formal or informal financial education growing up? If yes, where did you learn to manage your personal finances?

No, I didn’t get any financial education. I learned everything I know about budgeting and saving for retirement about a year after starting my first full-time job. I’m the kind of person who watches a lot of YouTube, so I found a couple of channels that talk about saving for retirement and I just watched a bunch of videos. I also read a couple of books. Some of my suggestions if you’re curious:

The Money Guys - a couple of financial advisors with a YouTube channel/podcast
I Will Teach You To Be Rich - book by Ramit Sethi
The Little Book of Common Sense Investing - book by John C. Bogel
personalfinanceclub - Instagram account with interesting posts
YNAB (you need a budget) - budgeting app, also has a great YouTube channel. Of course, I’m no financial expert so vet these folks on your own (you really have to be careful with “financial influencers”), but I found these ones super helpful.

💡 Ask the community

I’m at the stage where I have very specific questions about my situation, and I don’t know where to go. Namely, I’m a US citizen living and working outside the US, which brings its own complicated tax situation. I also work at a startup and get stock options, and quite honestly I don’t know what to do with them. I’d love to learn more about how other folks seek financial advice, especially without getting a financial advisor or something to manage their money. I’m definitely not at that stage, I just need a little help managing my own situation.

DrKingaMnich·Jul 13

Thank you for sharing this. I think this series is so very helpful. How much do you guys have already in your 401k if I may ask? I am always curious about how at what age people have. My sense is that especially for people that haven’t had much growing up (same boat here) that we need less later on than what we are being made believe.

Nickie34·Jul 13

I have around 90k and my partner has around 110k in his 401k + IRA (which considering for our entire working career I've made almost double what he does, is very impressive). I had to roll mine over to an IRA after moving out of the US and can no longer contribute, which was one of the worst parts of no longer working for a US employer 😭 losing those tax-advantaged retirement accounts hurts!I can see what you're saying with us maybe needing less than what we think! Growing up without much definitely made it so that I highly value financial stability. I think that's why after I started budgeting, I started both saving more (for retirement) and spending more on the things I care about! Having a system where I knew for sure that I was financial stable, but also I can afford to go on trips and buy stuff like nicer furniture, has helped me get out of the "hoard all your money in savings" mindset that I grew up with. My ultimate financial goal is to keep saving and when I have enough, absolutely ball out in retirement.

Filomena21·Jul 14

If you can no longer contribution to a traditional 401k, then isn't the maximum annual contribution between the two of you only $14,000? So if you're putting in $1,800 a month you'd hit the maximum each year about 8 months into the year? Maybe I misunderstood something.

Nickie34·Jul 15

Yeah I can explain the situation a bit more - my partner works for the US government, so he gets a 401k and all those benefits. I work for a Germany employer so I personally can no longer contribute. For my own saving for retirement, I do hit the maximum I can contribute to an IRA just like you said, so the rest goes into a regular old brokerage account.

DrKingaMnich·Jul 15

Thank you for responding. That is very impressive for your age. I moved from Germany to South Africa and I am now in the US. it’s every time almost like starting over.

Nickie34·Jul 16

Thank you! Learning all new systems for everything definitely does feel like starting over. I've been here for a year and I'm still learning new things!

Filomena21·Jul 14

Can you share more about your car loan — what is the interest rate on the unpaid loan? And when you say you are trying to save for a new car, would that be a second car, or would that replace the current one?

Nickie34·Jul 15

The interest rate is ~5.5% on my car, which I bought last year, so we're about 1/3 of the way to paying it off. We're slowing saving for a new car for my partner, who has an older car that's fully paid off. It's still chugging along just fine so there's no rush to build up that sinking fund, but eventually he will need a new one.

Filomena21·Jul 15

Interesting, thanks for sharing! I've always lived in US cities with good public transportation, so I don't know any couples where they both have their own car (and I know plenty of people who don't have a car at all). I guess the post just says Germany and doesn't specify — are you in suburbs or the countryside? Do you feel like driving a car and the cost of parking is worthwhile vs. using public transport? And do you also use your cars for road trips within Europe?

Nickie34·Jul 16

Great questions (some I should've asked before moving here!). I assumed that I wouldn't have to get a car at all and could rely on public transportation, especially because I work from home, so having to buy a car for the first time when I moved here was definitely an unplanned expense. We live in a smaller town and there are ways to get around with the bus and the train, but not in a timely manner. For example, the drive to the gym is ~20 minutes, but taking a bus and then a train would take me about an hour and a half. And fun fact about Germany - the trains are NOT reliable here 😭 we've been burned several times by the trains, so we do use our cars for road trips sometimes. Other times if we're willing to risk the cancellations, we'll drive to the nearest train station and then take the train. Parking at the train station for a couple days is pretty cheap and a good happy medium because we get the convenience of not having to figure out parking wherever we're traveling, but cut out the longest leg of the trip, which would be getting from our small town to the nearest large train station.

Ester211·Jul 15

Wow, you're doing great! So much saved and investing well at 26 years old! And I think you should be spending that extra amount when you're in Europe to really travel and enjoy the time there.

Nickie34·Jul 16

Thank you very much! I'm a homebody at heart but we're doing our best to travel around every chance we get.