May 2020 – The revenge of the taxes!

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May 2020 - The revenge of the taxes!

May 2020 is over! One more month that we spent at home. Restrictions have started to get eased in Switzerland. But we still spent most of the time in our apartment.

We managed to spend very little money this month. However, we now have to pay the taxes for 2019! Given my significant increase in income last year, I did not pay enough taxes in 2019! So now, it is time for the taxes to take their revenge!

So, while our pre-tax expenses are quite good this month, our savings rate is down to zero! It has been almost three years now since the last time it happened. A zero savings rate is never great news. But we knew it would happen.

So, for the first time in almost three years, we are back to a month with zero savings. Our net worth went down this month.

May 2020

May 2020 was pretty much uneventful. We had a few meals with friends but only with five people or less (the current maximum in Switzerland). We went for walks in the forest and to the river. But aside from this, we only went to groceries.

This situation is fine by me, but I wish we could start again having parties with more friends and families than five at a time. And Mrs. The Poor Swiss would be glad to get out of the house and out of our village.

Regarding our financial situation, this month was okay for the pre-tax expenses. We managed to spend little money once again. Our level of expenses is reasonable. I feel like we are going to keep our goal of having our expenses below 4000 CHF on average per month.

But when we include taxes, May 2020 is a terrible month for our finances. We had to pay a ton of extra taxes this month. I knew it was coming. But it still sucks to have to pay such amounts of money.

After taxes, our savings is a beautiful little zero. We have not saved any money this month. And we had to use our savings to pay out the taxes. It will happen again next year but in a much smaller proportion.

On top of that, paying an extra 600 CHF for my knees is starting to piss me off. I still have no clue as to what is wrong, and I have already paid a significant amount of money. If doing physiotherapy does not help, I do not want to go back to doctors and continue paying for nothing.

Except that, this was a very simple month. The weather was good most of the time. So we have enjoyed our backyard a lot.

Still working at home

I have spent this entire month working at home. And I am still enjoying it.

I have built myself a nice routine for my day, with a walk in the early morning and a coffee pot pause later on in the backyard. I feel this routine is more healthy than when I was working in the office.

I hope that the COVID situation gets resolved quite soon. But I hope that the work-from-home situation keeps longer. Hopefully, my company will relax its rules for working from home in the future. But I am not very hopeful about that.

Now that I am always at home, I realize that I need to invest in a good ergonomic chair. The one I am having now is not made for working all day on it. It is quickly becoming uncomfortable. For now, I am waiting to see if my company makes the remote work option longer or not. Then, I will see if I buy a new one or not.

Unfortunately, work has been crappy these last few months. We have not been doing anything interesting recently. It is starting to wear on me. I used to love my job. But I now realize that I do not enjoy it that much anymore.

Still searching for a house

Regarding our search for a house, not much has happened here. We are starting to realize that my income is simply not high enough for us to buy the house we want. We will need to reduce our requirements otherwise we will never get a loan for the house we want.

On top of that, there is also the fact that banks do not want to take my bonus into account since I have not worked for three years at the same company. I feel like this system is pretty dumb. Financially responsible people cannot get a mortgage. And at the same time, financially irresponsible people can get all the consumer loans and leasing they want.

It is a bit disappointing that Switzerland is a country where you cannot afford a nice house with a gross income of almost 160’000 CHF per year and a savings rate of 50%. I have to say that this sucks. I was not expecting that. Maybe, we are Poor Swiss in the end!

All the houses we are seriously interested in cost between 950K and 1M. But we cannot properly afford anything higher than 850K without bringing in more than 20% in cash. But doing so does not make any sense financially.

We will continue looking, of course. But we may have to settle for something less than what we want.

Expenses

Let’s see the details of our expenses in May 2020:

  • Insurances: 1235 CHF: Health insurance and home insurance.
  • Transportation: 89 CHF: Parking place and one half gas refill.
  • Communications: 82 CHF. Internet and bill for my phone plan.
  • Personal: 1045 CHF. Mostly bills for my knees and a service fee for the blog.
  • Food: 251 CHF. Normal grocery bills.
  • Apartment: 1247 CHF. Only the rent bill.
  • Taxes: 11062 CHF. I have already talked enough about these bills!

Looking back in the past, I have never spent that much money in a month in my life. Let’s hope this is a record we are not going to beat any time soon.

Not taking the taxes into account, we are meeting our goals of spending less than 4’000 CHF per month. Now, we are very close to this limit. So we spent a bit more than I thought. And the main issue is the large bills for my knees (still without any solution). I paid more than 600 CHF this month again.

Aside from this, we had to pay the house insurance bill, which is once a year. Our gas budget for the entire month is 29 CHF. And last month, we spent 0 CHF  on gas!. Low transportation fees are one of the significant advantages of working from home and social isolation.

So, I am not too unhappy about these expenses. There is not much we could have done better this month.

2020 Goals

Let’s take a look at how our goals are doing at the end of May 2020:

Goals as of May 2020
Goals as of May 2020

Overall, our goals are still doing great. We did not make much progress this month on some of our goals since our net worth went down. But there is nothing terrible either about them.

I even managed to lose weight during isolation. I am still not sure how this happens. Maybe that my morning walks help a little here. But I am not sure this is the case. I am pretty sure that some of the lost weight must be muscles, unfortunately.

As for the gym, this goal has been destroyed by COVID. Gyms are slowly restarting now. But I do not think I will do 15 minutes in the car just to go to the gym if it is not on my way to work. So until I am working at home, I will not go to the gym.

I realize that I have to start exercising at home. I am now trying to find a gym bench to do my exercises. I do not need much. And I already have a few dumbbells at home that will be more than enough for that. The problem is that we do not know where to put it since we have little free space.

One goal is going backward. The page views on the blog are decreasing month after month. I am still on track for this month. But if this continues decreasing, I will not reach this goal. And I am running out of ideas to make it work.

Net Worth

Let’s see how net worth evolved during May 2020:

Net Worth as of May 2020
Net Worth as of May 2020

We can see that this month our net worth almost did not move. Fortunately, even though we spent a ton of money this month, our net worth only decreased by less than 2000 CHF. And we did not have any special income this month.

The reason is not the stock market growth since almost all our assets are out of the market for a house. But my second pillar is not counted in our income and continues to grow. Also, the dollar appreciated slightly compared to the last time I checked it. So, it is not so bad. It should go back to growing next month.

Overall, our net worth is still going nicely. We are still on track to reach 300’000 CHF by the end of the year. But of course, this will highly depend on whether or not we find a house.

The Blog

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Once again, the blog did not do well in terms of traffic. It went down again for the third month in a row. I do not see what to do to get out of this plateau.

I am keeping up with my routine of publishing two posts a week. Going back to three could improve my traffic. But I feel like two articles a week is a reasonable rate for me and the blog. And I am continuing to update some older content. But this seems to no avail.

I have a few ongoing things to improve the blog that will come next month. But no dramatic changes. I will not make any more changes to make the blog faster. All my effort on this side did not affect traffic. But hopefully, visitors can see that the blog is fast.

I have a few ideas that could improve the traffic, but they require a lot of time. For instance, I am sure that translating some of the posts to French could bring in a significant amount of traffic. But I do not have the time or the motivation to do that now, to be honest.

And I think that adding videos to some of the articles would also help. But again, I do not have to continue producing content and doing videos at the same time. But this could be something I do once I am done with the ongoing improvements to the blog.

Do you have an idea of what I should do to increase traffic?

Hopefully, some of the posts I have planned for next month will bring a little more traffic. But I have been wrong before on that. So, we will just wait and see.

On the other hand, I still get many comments and emails from readers. And many people are expressing their thanks for the blog. So it seems that the blog is doing a good job of being helpful. I should work on being content with that.

As usual, here are the top three posts in terms of traffic for May 2020:

  1. TransferWise vs Revolut
  2. DEGIRO vs Interactive Brokers
  3. Online shopping in Switzerland

Unfortunately, the new articles of May 2020 did pretty poorly this month. So, fortunately, some of my older articles are still bringing in some traffic.

What about you? What was your favorite article this month?

Next Month – June 2020

I do not expect much will change in June 2020. Normally, the next restrictions of isolation should be removed. It means we will be able to organize small parties with friends again. It is honestly the only thing that I missed in isolation.

Normally, I will still be working from home the entire month of June. But this could change. Hopefully, I will not have to go back to the office for a while.

There may still be some extra taxes coming in next month. I have not yet received the report for the county taxes. And I know I did not pay enough last year. It should be lower than this month. But it could still be bad. Except that, I do not see anything unusual. But as usual, I could have overlooked something.

What about you? How was May 2020 for you?

Mr. The Poor Swiss

Mr. The Poor Swiss is the author behind thepoorswiss.com. In 2017, he realized that he was falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.