Finance Check: “We should all be more open about money”

How much she earns, how she organizes her finances and how she deals with irregular expenses: Meike reveals all of that and more in our Finance Check format.

There are many ways to organize your finances. For this instalment of our Finance Check, Meike tells us how she does it. She reveals her monthly budget, how she splits her various accounts and how her parents influenced her attitude to saving.

What’s your (net) monthly budget?

I’m currently working as an administrative assistant and earn €1,600 a month. But I’ll be starting a new job at an engineer’s office soon. On top of that, I also earn around €200 by tutoring students, taking part in studies or from other odd jobs. 

Are you renting or buying your home?  

I live with my boyfriend in a rented 50 m² apartment in the beautiful city of Lübeck and I really feel at home here. My boyfriend is still studying here, which is why we won’t be moving anywhere else for the time being.

What’s the breakdown of your monthly outgoings in fixed costs and variable costs?

My fixed costs add up to €640. Our rent (including the heating bill) is €390, but that’s before the cost of heating increases. We share these costs 50/50. I also spend €175 on various insurances (private pension insurance, liability insurance etc.) and €75 on other fixed costs (club membership, mobile phone, donations etc.). 

My variable costs are between €500 and €650. The majority is spent on food and leisure activities. I don’t spend much money on material items, but when I do, I try to only buy things I really like or need. If I do buy something, then it’s usually second hand.

At the beginning of each month, I invest €280 in ETFs. Any money that I earn beyond that and whatever is left over is put aside as savings for larger purchases or vacations.  

When you see the breakdown of your finances, does it surprise you or do you check your spending and income regularly?

I check my account regularly. Sometimes I tend to justify my irregular expenses because they don’t crop up every month. But I’ve realized that there is always something new to splurge on each month: it might be a more expensive visit to the hairdresser’s, a concert or a new pair of glasses. So I need to take this spending into account as part of my variable costs, which I haven’t done in a long time.

How do you organize your finances to keep track of everything?

I have multiple accounts: two current accounts, one instant access savings account and a securities account. One current account is for my fixed costs and all income. The money I invest is transferred from here to my securities account. Every month I transfer €500 from this account to my second current account, which I also have a card for. That’s my ‘pocket money’, which I use to pay all my variable costs. If I need more, then I’ll transfer more money over to that account. The savings for my rainy-day fund are transferred to my instant access savings account. I keep track of my finances using a budget book in an app. The way I’ve structured my accounts gives me a good overview of my finances. I’d like to switch to Tomorrow, but if I do that I’ll have to come up with a different tactic.

How are you making provisions for your old age or saving up for bigger dreams for the future? 

For most people, the state pension won’t be enough to live off. That’s why I also have private pension insurance. The money I invest will also go towards my pension. And I will inherit some money too. My plan is to retire when I’m 60.

What is particularly important to you when it comes to money?

I think we should all be more open about money. Phrases like “You shouldn’t talk about money” are still firmly embedded in a lot of people’s heads. And when it comes to salaries, a lot of companies make a real mystery out of the whole topic. That can be really baffling, especially for young professionals who are just getting started in their careers. As I’m currently in this phase myself, I think about it a lot. And I also put a lot of thought into whether I’d like to own my own home one day or not.

What do you wish you’d known sooner about money and finances? 

My parents are quite conservative and see real estate as the only sensible way to invest money. They think that investing in the stock exchange is too risky. Up until around two or three years ago, I didn’t really look into it. I wish I’d known a lot sooner what ETFs are and that buying property isn’t the only way to invest money in the long term. It’s worth getting started early. I wish I’d started investing small amounts when I first began earning money during my traineeship.

Find out more 

Money mindset: what is my relationship with money – and why?

Tomorrow study: 27 fascinating findings about finances in relationships

Sharing is caring: 8 important tips to start investing