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 doing without 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 NewsABC.net. A saved safety buffer already enables financial freedom, for example to reduce working hours, take longer parental leave, take a sabbatical or venture into self-employment.
“My new thought is that you will become more independent and free even before you retire at 40, even if this may result in your final freedom being 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.
This has created more time for his private life. Noelting believes that in your 20s and 30s you set the 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 recording his income and expenses in an Excel table since 2013. “Then you get a feeling for where all the money is going.” As soon as the awareness of the expenses is there, ask yourself: “What things bring me happiness in life?” What do you spend money on out of laziness or 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 additional 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 there is also scope there, 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 new as possible at all: “That also came from the ecological idea: Everything I buy will one day be thrown away.” But it shouldn’t be doing without, it should be fun. “If you actually want to consume, but refrain from doing so, you tend to be unhappy.” He has therefore 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.”