September 2024 – Got a new car
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(Disclosure: Some of the links below may be affiliate links)
September 2024 was a relatively nice month. We got some fresh weather again, which is really enjoyable. We had enjoyable events with friends and family, and we celebrated our son’s third birthday.
Financially, we spent too much this month. We spent more than our average expenses and had an average income this month. Overall, we could save a third of our income this month.
September 2024
Overall, September 2024 was a pleasant month. We had a few things with friends and family, but not too many, a good balance. I even managed to go back to Europa Park with my siblings, which is something we had not done in a while. It was really fun. We had a wonderful game meat lunch with our friends.
And, we celebrated our son’s third birthday this month. We had a really good time. We did a smaller event this year and decided we would do a larger one for his fourth birthday.
As hinted last monthly update, we changed our car. Our car was getting too old. And Mrs. The Poor Swiss really wanted something more modern and more comfortable. After some research, we opted for a Cupra New Formentor, new. We know it is not a frugal car, but it was a compromise between me and my wife. After driving for a month, we are both happy with the model, even though we are talking about a car worth more than 50’000 CHF with the options.
We hesitated a lot between different options for financing the car. The first thing we decided was that the car would be bought by the blog company and not by us. This allows us to save more money because it means we can deduct these expenses, and we can also then deduct the fuel. On the other hand, we must add some virtual salary since the company now gives us the use of the car. Ideally, the best way to finance the car would have been a margin loan. However, at this point, we do not yet have enough in our company broker account to get a margin loan. So, we opted for a leasing. We did not look a lot, but the few car loans we could find had higher interest rates than a leasing. Since this is a company, we can deduct the leasing (contrary to personal taxes).
Other than that, it was a nice standard month, with significantly colder weather. We have prepared our chimney to start some fires again to heat our living room. And we will soon have to turn on the heating system. The transition between the warm and the cold was rapid this year. It almost feels like we did not have any autumn.
Financially, we could save a third of our income this month. Ideally, we want to save more per month. But in a month when we spend too much and our income is average, this is really not so bad either.
Expenses
Here are the details of our expenses in September 2024:
| Category | Total | Status | Details |
|---|---|---|---|
| Insurances | 776 | Expected | Health insurance for three people |
| Transportation | 196 | Higher than expected | More buses and trains than usual |
| Communications | 20 | Expected | Phone for Mrs. The Poor Swiss |
| Personal | 2679 | Higher than expected | Kindergarten and many various |
| Food | 828 | Higher than expected | Usual groceries and more eating out |
| Housing | 990 | Expected | Mortgage, heating, power and chimney cleaning |
| Taxes | 6542 | Expected | Usual taxes |
In total, we spent 12’033 CHF this month. Without taxes, this amounts to 5490 CHF. Our target is to spend less than 5200 CHF per month on average.
I was thinking we would be below our goal this month. But ultimately, we are actually significantly higher than I expected. Again, we have many small things adding up. And of course, the new 920 CHF per month for the two days of daycare are weighing a lot. We also paid for the first semester of kindergarten, another 200 CHF.
We had a few exceptional expenses. Our chimney was cleaned, as is the rule every year. We also paid for the power for the house. And we had the usual yearly dentist checkup for my wife. But most of the expenses are smaller and simply pile up. The list is too long to detail, but for instance, I bought a new wallet and my wife started a German course. I also had a day in Europa Park.
Our goal was to spend less per month than last year. But I do not think we can do that anymore. Obviously, the new daycare fees are not helping. However, this is mostly because we are less careful than before. If we want to spend less, we will have to be thinking more about each expense.
Overall, I am a bit disappointed by how much we spent in September. I was thinking we could do better this month.
2024 Goals
Here is the status of our goals by the end of September 2024:
Overall, progress on our goal is all over the place this month.
As explained in the previous section, we are not close to meeting our goals to spending less than last year. In fact, we are very likely to miss that goal. Thinking about next year already, some expenses will not be duplicated. However, I am sure some new expenses will come to replace them.
We are also extremely unlikely to increase our income by 5% this year. We will likely end closer to 1%. But this is already a great result. I did not account really well for the lower returns of the blog. Indeed, we are now getting a salary for the blog, and this salary is lower than the average returns of the blog.
And our savings rate goal is likely to fall short as well. So, our financial goals are not doing terribly well. However, our finances themselves are good, so this is all fine.
This month, I missed two workouts, but I have kept up with their intensity. I am thrilled with the results. I should really not have let myself slack off with these workouts over the years. Next month, I plan one extra improvement, so this goal is definitely in a good place.
On average, I managed to walk more this month than the previous month. This is great because I even went to the office twice so I could not use my treadmill. I still wish to use it more. My goal is to be able to walk all day, but this may take a while, and it is not always to deal with meetings at work. With the poorer weather, we have walked less outside than the previous months, so this is compensated by the treadmill.
Finally, our energy consumption went back down again this month. We used almost 20% less power than last month. This makes sense since we do not need our A/C anymore.
Overall, our financial goals are not doing too well. But our personal goals are doing well.
FI Ratio
Here is the progress of our FI Ratio as of September 2024:
Our FI Ratio went up this month to 31.24%. This is a nice increase of 1% since last year.
Our FI ratio is driven by three different factors:
- The value of our investments.
- The USD/CHF exchange rate, since we compute our net worth in CHF.
- Our average expenses since our target is based on average expenses of the last 12 months.
We spent almost the same as we did last year. Therefore, our target did not move.
Our portfolio went up significantly during this month with a very nice return. Only our Swiss domestic bias ETF did not perform as well.
The USD was very volatile this month. It started going up, but it went down when the Swiss National Bank announced lowering the interest rate again.
Overall, I am happy about the progress towards Financial Independence.
The Blog
Continuing on the direction of the last few months, I did a few extra refinements to the blog.
I hired a designer on Fiverr to get new covers for my two e-books (the free one and the paid one). I should have done that a long time ago because it makes a huge difference. And I can use nice-looking images on the blog for these two e-books.
The second thing I did was to redo entirely my free e-book. The design of the e-book was a bit stale, and the content needed refreshing as well. So, I redid it from scratch and added more information into it. One side effect is that I did not yet translate the e-book into French and German. But it should come at some point.
In the second half of the month, I had very little time for the blog and was barely able to keep up with the daily tasks. As a result, I am now very low on articles, and it may be a struggle next month.
Next Month – October 2024
So far, we have a few events planned for next month, like the traditional Bénichon from our canton. Other than that, it should be a quiet month, I think. I have nothing planned for the blog. And financially, it should be an entirely standard month.
What about you? How was September 2024?
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In June 2023, we planned our summer holiday and spent way too much money. We also slept very little again.
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Thank you so much for being open with your life and family. The advise helps. As a new Swiss citizen I struggled with German and asking the right questions, finding and understanding the answers. I made poor choices with my finances ( a little less now), and with 3 kids, was so overwhelmed.
I look forward to learning more about investmenting in CH and Europe and being a real blessing and help to my husband. One hears about doing investments, getting educational aid, and other secrets on living in the States but hardly anything about Switzerland and Europe.
Thanks for the advice, I now have transferred my little pension to finpension. You have helped me a lot as I recently got to hear about when doing some searches on the internet. God bless.
Hi Joye,
Thanks, I am glad you appreciate my updates!
Good luck with adapting to life in Switzerland. Don’t hesitate to ask questions on the forum.
Hi – this is financial blog. Please share some more CHF details- what’s the interest rate for the leasing? What’s the rate, Insuensce costs etc. And TCO- Swiss leasing is usually the most overpriced in Europe. On a personal level – you have become a certified owner of monthly instalments , certainly you did not purchase an auto, the semantics is clear.
Hi,
That’s a fair point, we do not own a new car, but rather rent it out from the bank.
Since the LLC is new, we got a worse deal than we could if the company was older or if we took the deal ourselves. We had to put down 7500 CHF, insurance is about 1600 CHF per year and 2.99% interest rate. Keep also in mind that this is my blog and I can share what I want.
So what are all in all your expected yearly ownership costs for the leased Formentor?
I.e including interests, insurance, maintenance and the various tax deductions.
How do you manage to only pay 776 for health insurance for 3 people?? I thought basic was around 400 for one person?
Here is the breakdown:
* Mandatory health insurance for me and my wife: 305.95 CHF each
* Mandatory health insurance for my son: 68.55
* Various complementary insurance (for three): 96.35 CHF
I do not think we are doing anything special except for using the highest deductible.
Congrats Baptiste and the family for the new car.
Sometimes it’s good to follow our emotions too.
Enjoy.
Thanks, Dror!
Yes, emotions should not always be avoided (even though they cannot always be trusted) :)
👍🏽 Well said!
Hi Baptiste,
Thanks for sharing the details on car financing approach. Some questions though.
1. As you deduct the car expenses as being part of running the blog business, don’t you have to prove to the tax authorities that indeed you need this car to run the blog, so the deductions is justified? Just asking out of curiosity, because I understand if you were an insurance broker driving from client to client. Then the car is the main tool to get your work done. But with home office job?
2. Slightly personal related question, but in the same manner. My wife has started her own gig, although still in the trial-and-error phase without proper income and not established business position, therefore not registered company yet. When can one start deducting business expenses? Just after registering the company or should there me a minimum income threshold satisfied?
Thank you in advance for your thoughts!
Hi Maciej,
1) Yes, you do. In this case, I have to go to multiple cities to see partners and sometimes readers. But it’s definitely not driving-heavy business.
2) As soon as you declare the income, you can also deduct the expenses, so the taxable income is the net income of the company. Starting from 2300 CHF per year, you have to declare this income and create a sole proprietorship at least. How to side hustle legally in Switzerland?
Thanks a lot, this helps. Just the link which you attached to your answer, although pointing to the correct article, but is titled wrongly by mistake.
I have no idea how I managed to mess up that link :(
How can you argue that you use the car for business purposes when you have a pure online business with 0 clients that you have to drive to by car?
Actually, I regularly meet partners and readers. For this, I have driven to Fribourg, Bern, Lausanne and even Zurich. But it is true that we do not drive much for the blog.
very much appreciate that you share your expenses so transparently. Even though financial independence is my objective too, I have never really keep book on what I spend and save.Even though this does certainly help to develop wealth in a controlled way. Nervertheless I save about 40% of my (active + passive) income in average, per year. Organising budgets like this certainly. I am someone who does not enjoy filling in tables and I don’t want saving to become too time consuming as time is a non renewable resource ;). Maybe you consider this as your job with this blog and therefore it’s part of your work time – so a win win. May I ask how much time you spend in average per week documenting your family expenses?
Hi Barbara,
Thanks for sharing as well. I am glad you appreciated my transparency.
Actually, I do not consider expense tracking as my job, but this is something I like doing. I am a bit OCD with data, and I like having precise information about where the money goes. But I entirely agree on your time comment. Time is more valuable than money!
I copy our expenses from our two accounts into our budget software once a month only and I also update the value of our assets at the same time. It takes about 30 minutes per month, I think.
Which budget software do you use?
It’s called budgetwarrior: I use budgetwarrior for my budget and net worth
It feels so nice to read this. Easily could relate to it and you sound very “human”.
Thanks, I am glad you enjoy the monthly updates!
It’s a rather unusual monthly update (especially with the car), but as much as I hope you’ll reach your financial goals quickly, it’s ultimately important to do so in good mental (and social) health as well.
So I hope you won’t be too hard on yourself for the non-frugal things this month, but rather be happy that it will be easier to beat September’s expenses in 2025. ;)
This may have some more negative than I expected :) I do not feel bad about the car, it was a good compromise. But it’s definitely not frugal.
We hope to reduce our expenses next year, but it is not the end of the world.
I was surprised to see you bought a new car given the quick depreciation etc. Are you planning an article or buying new vs second-hand?
Keep in mind that we bought it with leasing, so depreciation does not play that much of a role, unless we buy the car at the end of the four years.