Income and Expenses for June 2016

I have been following my income and expenses for couple years now. It started for as a way to see how I actually was spending my money and for the first few months I was spending a lot more than I was making. I did some corrections to my spending to make sure I did not spend more than I make.

I hope that by following actively my spending, it will keep me for spending too much. Also I want to spend my money on the right things and pay off my debts.

Other thing is that I want to show that even if I do not earn the most. I still can save and invest and hopefully reach financial independence.


Paycheck: 2,922.00€



maintenance fee: 198.50€
Mortgage interest: 225.00€


Food and others budget: 500.00€
Clothes: 167.00€
Gym: 66.00€
Fuel: 60.00€
Daycare: 40.95€
Internet: 19.90€

Debt payments

Mortgage: 750.00€
Student loan: 225.00€
Credit card: 200.00€
Spending loan: 100.00€

Total: 2,452.85€

In June I made more than I spend wich is good. My Income was higher because of overtime, but with finnish taxation system, I also paid a lot if taxes on that overtime.

Expenses where also higher than I would like them to be, though, most of my expenses comes from debt payments. In Finland we have the sales this time a year and spend some money in those. This was the first time in the last 2 years that I have bought something for myself, mainly underwear, socks and clean clothes to wear at work.

One expenses that went up was the maintenance fee that we have to pay monthly. I pay half of it and my wife pays the other. That sum is the amount I have to pay it every month. It’s quite a lot and every year it seems to go up. Next time we buy a home we need to look in that so we find place where it’s not so big. Our building has some features that cost a lot to maintain, that I could live without.


Net worth June 2016

To reach financial freedom someday it important for me to follow how my finances are improving. Idea is that I should be able to grow my assets and pay off my liabilities and thus growing my net worth.


Home: 279,200.00€
Portfolio: 4,037.00€
Debt handling account: 416.00€
Cash: 400.00€

Total: 284,053.00€


Mortgage: 225,111.00€
Student loans: 13,793.00€
Spending loan: 3,686.00€
Credit card: 850.00€

Total: 243,440.00€

Net worth 40,613.00€

This is how my net worth has developed after I started to track it. It was in the negative and I have slowly been growing it up. That big jump happen when I valued our home, it had grown in value over the time we had been living there. My net worth grew from last month, so that is good.

This is my portfolio, it has grown a lot by itself over the past two years. And from last month it grew again, but mainly from me adding new money to it.

This is the bad debts that I have since I started to track them. I have really struggle with these. Somehow I manage find more of these when I should be getting rid of them. But on the positive side, last months direction is down so that’s good.

Stages of financial independence

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I was talking with my co-worker about financial independence and I notices we have different ideas about it. He thought that if he was financial independent he could drive sports with pretty women in some paradise island and that he would have millions on top millons cash in some safe. In my idea it’s much smaller, just to have enough that it will generate income that I can get by. Mine is million on top of millions smaller in the amount money it will take to be financial independent.

But this got my thinking is there actually different levels or stages of financial independence and I do think there is. So I went on the search for what these might be and I found this really good video on YouTube about them. So, there is six stages of financial independence, or seven, depends how you calculate them.

Stage 0 – Dependence

This is actually the starting point when thinking about stages of financial independence. At this stage you depend on others or taking on debt for surviving your financial obligations. You are spending more than you make and if you don’t find a way out of here you will never be able to be financial free. When you start earning more that you spend or you start spending less than you make, you take the first step to becoming financially free.

Stage 1 – Solvency

This is the stage where you can meet your financial obligations without help from others or from needing to take on more debt. You are spending less then you make. You might have some big debt payments still, but you can manage them. Also, I think that not all debt is bad to have, those comsumer debts, like credit cards and such are bad but your mortgage is not. I myself are struggling to be in this stage, I spend less then I make, sometimes there is problems but my buffer can handle those, and most of my money goes in to paying off debt. With hard work on saving and being frugal I hope to reach next stage soon.

Stage 2 – Stability

This is the stage where you have paid off all your comsumer debt, or bad debt. You have buffers so when you have suprises, your buffer can handle those without needing to take on more debt. This is stage at the moment I’m working towards. There is some distance before I will reach it but with hard work and frugal habits I should reach it.

Stage 3 – Agency

This is the financial independence stage where you can live and work as you choose. You have paid off all the debts or you could do that if you wanted to. There is actually reason why you should not pay off all your debts.

Stage 4 – Security

This is stage you reach when your investments can cover your basic expenses, like housing, food, clothing. It’s not finest life style, but you could stop working and live like this for rest of your life. This is the stage that I was thinking about when I was talking with my co-worker. People dream of different things.

Stage 5 – Independence

This is stage where your investments can cover your current lifestyle, I presumed that your living a lifestyle now that’s over the basic, like most of us are. At this stage you would not need to change anything but the working part, you would not go there anymore.

Stage 6 – Abundance

This is now stage that my co-worker where thinking about, being so rich that you can do anything you want, when you want it, for as long as you want it with whoever you want it with. This is something I did not even dream for myself, I’n not interested being the richest man in the world. I think I would just try to good with the money that goes over what I would need to be financially independent on. Like start a charity or something.

Comment on where are you at the moment and what stage are you hoping to reach, I would like see what others are driving for.


Income and Expenses for May 2016

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I have been following my income and expenses for couple years now. It started for as a way to see how I actually was spending my money and for the first few months I was spending a lot more than I was making. I did some corrections to my spending to make sure I did not spend more than I make.

I hope that by following actively my spending, it will keep me for spending too much. Also I want to spend my money on the right things and pay off my debts.

Other thing is that I want to show that even if I do not earn the most. I still can save and invest and hopefully reach financial independence.


Paycheck: 2,343.00€



maintenance fee: 171.95€
Mortgage interest: 225.00€


Food and others budget: 500.00€
Washing machine: 410.00€
Gym: 66.00€
Fuel: 60.00€
Daycare: 46.00€
Internet: 19.90€

Debt payments

Mortgage: 750.00€
Student loan: 125.00€
Credit card: 100.00€
Spending loan: 100.00€

Total: 2,483.85€

Income in May was higher than normally because of overtime, but expenses where still even higher. Our washing machine broke and we needed a new one. In a 3 person family washing machine is something that we really do need. I managed to find one on discount and it washes and dries our laundry. It was also 19 years younger model then the previous one, so it saves on water and electric compared to the old one, and takes less space because it’s only one machine when we used to have separate washer and dryer.

Other than that, this was usual month with spending. I paid off over 1,000€ of my debts, that’s a good thing. Without this washing machine thing I could have paid off more and save some also. But no such luck this month.

I need to talk with the gym for them sending my bills. I have card thing I get from work and I paid with that already, so there should not be any bills coming to me, but for some reason they keep sending me those, I paid those but next couple should be free, and they I get more money on the card from work.

I also changed to the weekend shift this month, so, next salary should be higher because of the extras, those sunday compensations. I don’t know to they pay extra in everywhere for working on Sundays, but in Finland they to so it makes sense to work on Sunday for me.



How much is needed for financial independence


How much I need for financial independence

I hope to reach financial independence at some point. That point would be for me when I make about 2,000€ a month in passive income. At that point I would not need to work but passive income would cover all my expenses.

To reach that point I would need about 24,000€ of income after taxes a year. So, before taxes that would be something like 35,000€. Finland and taxes, we sure know how to tax. If I can get 10% return on my investment I would need 350,000€ of capital to gain it. To play it safe, I would say 500,000€ would be enough to reach that income.

How long would it take to save that

If I could save 10,000€ a year it would take me 50 years to reach that. So, I need to get my savings to work for itself so that I could reach that sooner. I really hope that I could retire when I’m 50 years old at the latest and that is 18 years away. So, I really need up my savings and make them work for me faster.

I got about 40,000€ at the moment, so I need 460,000€ more to reach my goal. I did some calculations and if I save 725€ a month and I can get 8% return on my investment, I could reach my goal of having 500,000€ by the time I reach 50. That is the target that I’m aiming.

Playing it safe

To make sure I reach that target I will try to safe more then 725€ a month and try to gain more then 8% return on my investment. Maybe If I double my investment to 1450€ a month I could reach my target 6 years earlier, just play it save that I really could retire at 50. Maybe if could get double the return on my investment I could retire 6 and half years earlier. Maybe I could be able to do both, I would be be able to retire 9 years earlier to my target.

And retiring at 50, it’s actually 20 and half years earlier then my retirement age is at the moment to get full pension from goverment in Finland. The pension systems are different in every country, but in Finland it works this way. You go to work, you get paid, goverment takes taxes and something for the pension fund. You work for a while, in my case till I’m 70 and half years old, and then goverment starts paying me my pension. Amount of the pension depends on the amount you have earned during you’re working carreer. But what I know about the system, it’s less then you made working, and it doesn’t rise with inflation, so every year you will need get by with less and less.

So to play it safe, I think it’s important for me to save something to the side that actually rises every year, like passive income streams for stock that keep raising their dividends.



Rules for money


I have made some rules for handling my money. Purpose of these rules is to make sure that I spend money on the right things and that I save money so that I can start really making it someday.

1. Spend less than you make.

This is the first and most important rule for handling money. To stop living from paycheck to paycheck you must stop spending more than you make. So every month you should start to have more and more in your buffer. You will need that buffer, there will be surprises and sometimes you will spend more than you make but you should try to spend less than you make. With time you will start to have big enough buffer so you will be able to not stress about money so much and start to make it work for you.

2. Get out of bad debt.

Any debt that you have that is not for something that makes you money or is not your home that you live in is bad debt. These kind of debt’s are mostly used for thing that lose value right after purchase like cars, electronics or something that has actually no value at all like junk that some people call food. When you don’t have bad debt and you have positive cashflow, check Rule 1 that’s above, you can get to the thing that can make you free and all you dreams of living in the sun true.

3. Make money work for you.

This is the interesting and most exciting part of reaching financial freedom. You must invest your money and make that money work for you. You can work hard, but your money can work harder. You will need to rest but your money won’t. You can sleep and wake up in the morning with more money than you had when you went to sleep with. That is amazing. There are many ways you can make your money work for you. You just need to find a way that works for you.

Net worth May 2016


To reach financial freedom someday it’s important to follow my finances. So that I know I’m spending my money in the right places and that my net worth is improving. My idea is to grow my assets and pay off my liabilities. Also, I need to change my assets in to assets that make cashflow for me.


Home: 279,200.00€
Portfolio: 3,879.00€
Debt handling account: 364.00€
Cash: 132.00€

Total: 283,575.00€


Mortgage: 225,873.00€
Student loans: 13,980.00€
Spending loan: 3,438.00€
Credit card: 1,150.00€

Total: 244,441.00€

Net worth 39,134.00€

That my net worth at the moment. Quite good when 2 years ago I was 12,000€ in the negative. I started to use my money better and not to spend it on useless stuff. Also, I have been really lucky, my assets like my home has grown in value and portfolio has also gained something in these last 2 years.