What prevents income saving

I save 60 percent of my income and that's how you can do it too

The software developer and blogger Oliver Noelting lives on 870 euros a month.

Noelting is a frugalist and wants to gain financial freedom with his saved fortune.

In an interview with Business Insider, he gives tips on how you can best save money - and live the way you really want.

Would you be able to save 60 percent of your income despite spending on a small family? Oliver Noelting manages it - and does not have the feeling that he is missing out on anything. The software developer lives on 870 euros a month to achieve his goal: financial freedom.

Noelting is a so-called frugalist and runs a blog of the same name on the subject. For a long time, his goal was to retire at 40. By then, he wanted to have enough money put aside and invested in ETFs to live on for the rest of his life and not have to work anymore. But in the meantime he has refrained from this plan.

Greater savings give you the freedom to try new things

“I didn't see it as a rigid goal, but always as a guideline. In the meantime, however, I've already saved up a certain fortune and we've become parents, ”Noelting said in an interview with Business Insider. A saved safety buffer already enables financial freedom, for example to reduce working hours, take longer parental leave, take a sabbatical or dare to be self-employed.

“My new thought is that you will become more independent and free even before you retire at 40, even if that means that your final freedom may be pushed back,” says the 32-year-old. Some time ago he reduced his working hours in his job as a permanent employee to 24 hours a week. Together with his independence, he currently works around 30 to 35 hours a week.

As a result, he has created more time for his private life. Noelting believes that in your 20s and 30s you set your habits for the rest of your life. Those who already pay attention to a healthy diet and sufficient exercise and sport are more likely to do so later. “You lay the foundations for a healthy, happy and successful life,” he believes.

Saving tips: This is how you live on 870 euros a month

But how do you manage to live on just 870 euros? This is how much money Noelting spent on average per month in 2020 for himself and proportionally also for his child. During the first shutdown in March it was only 630 euros. “I don't have a lifestyle where I feel like I'm doing without things,” the blogger emphasizes.

“The first thing I would recommend is a budget book,” says Noelting, who has been entering his income and expenses in an Excel spreadsheet since 2013. “Then you get a sense of where all the money is going.” As soon as the awareness is there, ask yourself: “What things bring me happiness in life?” What do you spend money on out of laziness or a bad habit? How could you satisfy the same need for less money, for example by switching electricity providers or bringing lunch to the office?

“The second thing I find important is a positive, optimistic approach to life: I am satisfied with what I have. Often something is only bought out of the feeling that something is missing, ”says the frugalist. His third savings tip is: Start with the big posts.

“I would always start with the living situation, which is usually the biggest expense. You save automatically every month, ”says Noelting. His motto applies to the apartment: as big as necessary and as small as possible. He lives with his girlfriend and their daughter in a 46 square meter two-room apartment. “We use the living space efficiently. We also live close to work, which saves time and high costs for a car, ”he says. Due to the small living space, the ancillary costs are also lower.

"I no longer have this need to consume."

In an expensive city, cheap rental apartments near work are not easy for everyone to find. But even there there is scope, such as taking the smallest possible apartment or moving a little further away and using an e-bike to get to work. "There are many opportunities. Frugalism also means thinking a little out of the box, ”says Noelting.

The thought of saving as much money as possible spurred the frugalist on from the start. He even ordered different shower heads to see which one saves the most water. He also pays attention to power consumption when purchasing technical devices and uses LED lamps.

The 32-year-old tries to buy as little as possible at all: "That also came out of the ecological idea: Everything I buy will one day be thrown away." But it should not be a sacrifice, it should be fun. “If you actually want to consume, but refrain from doing so, you tend to be unhappy.” That's why he tried to find creative alternatives, for example by repairing broken things, borrowing something or doing handicrafts himself or asking friends. "I no longer have this need to consume."

But there is also a connection between time and money. “The less time you have, the more money you spend,” he says. “As a student, I did a lot myself because I had the time. Today, as a working father, it's not so easy. ”Nevertheless, he still buys most of the“ new ”things used, for example on eBay classified ads.

"I always ask myself the question: is the money worth it to me?"

He wouldn't say no to an evening in the pub with friends out of thrift. He has also already taken a sailing holiday for 1,000 euros. “I always ask myself: is the money worth it to me?” Says Noelting.

When he was suddenly only able to work from home during the corona pandemic, he regretted only having a small apartment with two rooms. Now the family is moving into a somewhat larger apartment in the same house, in which he has his own study. But this was also due to a cheap offer, according to Noelting. "You can also think of other solutions, such as good headphones, without throwing a lot of money on the problem."

In his opinion, it is best to aim for a high savings rate right from the first job after training or studying. As a young father, he finds it “extremely helpful” to have greater savings. “If you have put money aside beforehand, you can approach this time in a much more relaxed manner. With this frugal lifestyle, we can make decisions much more freely, ”says Noelting. His family is not dependent on constraints such as someone else's care or a certain working time. And he also wants to pass the principle on to his child if he or she expresses consumption wishes later. "I want to teach my daughter that money doesn't grow on trees and that you can be happy with little money."