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Last month, I started my new interview series: Frugal Living in Switzerland. The first interview with Janet was very well received by my readers. In this series, I am interviewing people that manage to live frugally in Switzerland, one of the most expensive countries in the world.
Today, I am going to interview another frugal person living in Switzerland, Mr. Road To Fire. He is a young manager, saving more than 55% of his income! It is another great example of how you can live very frugally in Switzerland.
Without further ado, here are the answers of Mr. Road To Fire to my questions!
1. Tell us about yourself?
Hi, dear reader of The Poor Swiss! I’m Mr.Road To Fire (RTF), a 27 y/o manager living in the french part of Switzerland. I just moved in with my wonderful girlfriend, and we do not have any kiddos. My main hobbies are spending time with my friends and family, working out, and my blog.
2. How much of your income do you save each month?
My monthly expenses amount on average to CHF 3.3k, and my net income is currently CHF 6.9k. My best month this year was April with a whopping 87.60% saving rate, and my worst one was October with a disappointing 24.19%. Both of the time, non-recurring income/expenses were at play.
So far this year, I managed to keep my savings rate at a sane 57.68%.
3. How do you compute your savings rate?
My saving rate = (net income – total expenses)/net income
My definition of the net income = gross salary – social deductions (incl. AVS, Pillar 2,etc…). It reflects the amount I receive on my bank account every month (=take home pay).
My total expenses include taxes, health insurance, and all other expenses. I do believe that by including all expenses in my calculations except the social deductions, I do incentivize myself to optimize every expense.
Keep in mind that taxes are in no way an un-optimizable expense, even if you are subject to the source tax.
4. Do you consider yourself a frugal person?
Well, even though I am saving a large portion of my income, I do not consider myself an extremely frugal person, rather as a moderately frugal one. I do not aim to be frugal. I just cultivated the habit of buying things that add value to my daily life. This attitude toward spending drastically decreased my level of consumption without decreasing my perceived level of happiness.
I do believe that each cent we spend should buy us at least a tiny bit of happiness :)
5. Can you give us the breakdown of your expenses?
I hope you like graphs as much as I do! Please find below my year-to-date number for 2019 as well as a visual recap:
|Total effective expenses
|Activities with friends
|YTD variable expenses
|YTD fixed expenses
[Mr. The Poor Swiss: Keep in mind that he is only paying for half of the rent and food]
6. Which expense category are you the proudest of?
I’m particularly happy with the amounts I spend on mobility and housing so far. Basically, I do not over-optimize my spending. My motto is to focus on the big three:
Keep these three expenses at a reasonable level, and you will be fine!
7. What is the main difficulty for living frugally in Switzerland?
I think that an obstacle for living frugally, in general, is the social component. If your friends live a decadent lifestyle, it will be hard for you to live very frugally as you will mainly spend your free time with them.
In Switzerland, lifestyle inflation is vastly prevalent, so that a very large portion of the people that you will encounter will be big spenders. You either have to reduce the amount of time you will spend with them, show them the path to more meaningful spending or find new frugal friends.
I am convinced that the basis for a sane and long-lasting friendship is to accept the other person as she/is. Time is a scarce resource, and I don’t have time to try to change the mindset of my friends completely, or maybe I am just too lazy!.
My friends know that I won’t come to a splurging party (e.g., going to a *****restaurant) with them, so they don’t ask me to come. I accept them the way they are and expect them to do the same about my weirdness :D
8. What is your best tip for frugal living in Switzerland?
The most impactful change I experienced was to switch from a “price” perspective to a “value” perspective. I really think about the potential added value of stuff I wish to buy. Cheap ultimately does not encapsulate value. As Warren says: “price is what you pay, value is what you get”.
As a result, I buy less stuff, and sometimes I choose the more expensive alternative because it is a good value for me. I think that cultivating this spirit will yield far greater results than saving CHF 5 on your next phone plan.
9. Why are you saving so much money?
I definitely save to invest the maximum amount I can and thus generate more wealth. I want, in a first step, to achieve financial serenity, and in a later stage, to reach financial independence. My ultimate goal is being able to organize my life as I wish to, without financial constraints.
10. If you had more income, would you spend more?
If I get a raise at work, I mentally allow myself to increase my spending by 20% of the amount of the said raise and save the remaining 80%. That’s the simple rule I set for myself.
Notwithstanding the above, it would currently be pretty hard to increase my spending, since I consider I already have/possess everything that could bring me long-lasting happiness. Therefore, an increase in my spending wouldn’t translate into an increase in my quality of life.
11. Do you ever feel you are sacrificing something by living like that?
Never, ever. I think I reached the frugal zenitude :D
12. Do you splurge on anything?
I have to admit that I could spend a rather unreasonable amount of money on wine, but so far Mrs. RTF is doing a great job keeping me away from wine tasting and vineyards ;)
13. Do you have a budget?
Yes, I find budgeting to be very useful for optimizing my spending. I budget my spending categories for the whole year, and then at the end of the year, I undertake an “effective versus budgeted” analysis. This allows me to reflect on my spending habits and try to find further ways to reduce my spending.
I created my own spreadsheet, feel free to give it a look, and to copy it. Any feedback is welcome. I am working toward a new version.
14. Are you setting aside some “fun money” each month?
No, not really.
Thanks a lot to Mr. RTF for answering my questions. He is saving more than 55% of his income! It is great! I need to improve my savings if I want to compete with the persons I am interviewing.
If you want to learn more about Mr. RTF, he is blogging at Road To FIRE (in French). He has some really good articles I would encourage to check out!
If you want to learn about frugal living in Switzerland, you can read the interview with Janet, a Ph.D. student saving more than 60% of her income. Or, you can read the interview of Thomas, saving more than 80% of her income.
If you are living a frugal life in Switzerland, I would love to interview you! Let me know in the comments below or via the Contact page. It is not only for bloggers!
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