Personal Finance

Budget

The pie chart below represents how we spend our family income in Belgium. Both of us are working.

Every 3 months, I review my recurring expenses, and try to reduce them to a minimum. This makes sure we have a higher discretionary expense budget for doing more fun things.

The rest of it is pretty simple, invest 20% of your net income for retirement, and don’t touch it. We try to save an additional 10-20% for short outlays such as job loss, vacation etc.

Tips

Utility bills

Unplug or turn off electric devices when not used. Use the right light bulbs and plan wisely when you run your washing machine and/or dryer. You can easily save 50% on electricity with the right habits.

Rent or buy?

Let’s outline all the expenses for buying a house in Belgium. Overall, you can expect to pay a much on your mortgage as you are on your rent for the same house. Both types typically don’t increase faster then inflation. The reason we chose to rent was simple, Belgians tend to buy a second house more often as an investment rather than entering the stock market. Currently the market is saturated with homes available for rent and for sale.

Rent Buy
  • Recurring: Renter’s insurance (required by contract?)
  • Recurring: Fire insurance (required by contract?)
  • Recurring: Tax
  • Recurring: Maintenance (1-2% of house value)
  • Recurring: Insurance
  • One-Time: Notary (>20000 EUR, this can be 3 years worth of rent)
  • One-Time: Capital Gains Tax (upon selling your house)
  • One-Time: Registration

Cash-back credit cards

Look for a cashback credit card, and automate all your recurring expenses on the card. Make sure to pay off the card at the end of every month. Also evaluate the annual cost for the card.

I strongly recommend not to use the cashback card for any other stuff, as it may create a bad spending behavior that will make you focused on the cashback reward.

Our credit card from BeoBank, has a 200 EUR cashback limit, and only costs 5 EUR per year to own. Typically we get 1% cashback on every purchase.

If you’re a frequent traveler, get a debit card from TransferWise¬†or Revolut. But TransferWise has more currency options, making it a more viable option. I could recommend cashback credit cards or rewards credit cards too, but the European ones generally carry too many fees with them when spending in foreign currencies.