Our Family Expenses with 2 Kids in Germany

What are the expenses of a family with two kids in Germany?

Hello readers. This is a post I’ve been planning to write since the beginning of the year but somehow I never got round to it.

As you might already know, I have a bit of a fetish for numbers, Excel, expense tracking and all that. You might also know that I’ve been tracking my expenses since the beginning of time. A few years ago I managed to convince Mrs W to track her expenses as well and now we have a few years’ detailed shared expenses data. Why?

  • To get a good idea of where our money goes each month
  • To identify and kill large expenses that have a ridiculously low cost/happiness ratio
  • To learn from the past and be able to predict our future expenses
  • To have our expenses under control
  • To know what raising two kids costs, right from the beginning
  • To produce nice Excel charts
  • Out of simple curiosity

I thought we should share these numbers with you. Maybe we’ll start some interesting conversations about how low or high our expenses are compared to others. Maybe some people are planning to move to Germany and want to know what to expect.

Here you go:

14.1% Housing* (utilities, heating etc.): €4.293 (€358)
15.8% Food: €4.802 (€400)
14.0% Childcare: €4.250 (€354)
13.6% Entertainment: €4.119 (€343)
11.3% Insurance (incl. health insurance): €3.446 (€287)
06.5% Gifts: €1.981 (€165)
04.4% Transport: €1.332 (€111)
04.1% Accounting: €1.254 (€105)
04.0% Kids: €1.218 (€101)
03.4% Education: €1.035 (€86)
02.5% Healthcare: €778 (€65)
02.2% Household: €660 (€55)
01.4% Clothing: €427 (€36)
01.4% Phone, internet: €414 (€35)
00.6% Memberships: €190 (€16)
00.2% Bureaucracy: €60 (€5)
00.1% Bank charges: €31 (€3)
Misc.: €84 (€7)

Total: €30.374 per year (€2.531 per month)


Let’s add some comments about the least self-explanatory ones:

Housing: We own our apartment and have no mortgage payments.

Insurance: Mrs W was employed the first 7 months of the year and during this time her health insurance was paid automatically from her salary. These sums are not included here. Since she became self-employed at the beginning of August 2015, she has state health insurance that covers the kids as well (about €380/month). I am privately insured for about €150/month. So since August, we’ve been paying about €530/month for health insurance.

Food: Includes alcohol. Also, in 2015 we did a low-carb experiment the whole year where we replaced most carbs with high-protein foods and more fatty foods that cost more.

Gifts: Includes all sorts of gifts to family, birthday presents for friends, donations etc.

Transport: We don’t own a car. This includes bus, tram, train tickets and hitchhiking costs. Holidays are not included here.

Kids: Accounts for about 18% of total expenses. I separated “Childcare” from “Kids” simply because these are by nature two different things. “Kids” includes all the necessary expenses and everything we spend on the child directly. We’re not going to go overboard and separate the kids’ food expenses from ours. We all eat form one pot, and they don’t eat that much at this age anyway. “Childcare” is more or less optional, some would say a “luxury” expense since we theoretically could have kept the kids at home all the time. In some families grandparents take care of the kids while the parents are working.
Total cost of Kids plus Childcare for the year: €5468
Side note on children: Our first child was born in late 2012, the second in mid-2014.

Education: Mrs W sunk some money into some courses she didn’t finish. Don’t ask… Don’t ask!!! (Completely avoidable.)

Healthcare: All the money we spent on my visits to the dentist, doctor, and everything that’s not covered by my health insurance. Health insurance is included in the “Insurance” category.

Household: All the small things you need in the household: pans, washing up liquid, toilet paper and all that.

Bureaucracy: All the little fees we had to pay for administrative stuff at different offices.

Bank charges: Yes, we have some bank accounts we had to pay some fees for.

What we’ve learned

Things that we’ve learned from tracking and looking at our expenses:

  • Apart from childcare, our expenses are pretty stable, even slightly lower than before we had kids. Simply because before the kids we made some (for us) expensive trips each year. Now we still travel a lot but mostly to family, which is not as expensive as a trip to South America or Thailand.
  • Children don’t really cost much at all, considering that we get at least €190 family allowance per child (€4560/year). I say at least, because if your income is higher, you get more, read here. This amount covers the “Kids” expenses about four times over. We’ll write a dedicated post about that. Things are not quite as simple as they seem.
  • Childcare makes all the difference. But we don’t have any family here who can take care of the kids for hours every day. We have no alternative but to pay for them to go to nursery. And that’s ok.

Talking of kids – don’t use children as an excuse for not pushing for FI! Please. We managed to become double-FI in 9 years with two kids and we’re not really special or very talented.

Feel free to ask us about our expenses! Also if you’re a blogger and you’ve written about your expenses, feel free to link to your post in the comments.

Are these expenses too low or too high compared to yours or to those of people in a similar situation? Do you track your expenses? What are yours? Do you make any changes to your behaviour based on you data?

  • Felix Krausche

    Hi Mr and Mrs W.,
    thanks for your openness to publish your expenses. I also did in one of my last blog entries (percental):

    My question: what is about pension fund? Do you have one/two? I undersatnd you are self-employed – so you do not have any claims, right? Just for information 🙂


    • hey Felix! Welcome to our blog!
      Yes I pay 150€/month in a funds based Rürup pension plan which is about 80% deductible. It was a mistake doing it because I paid a lot in expenses and the running costs are very high as well (TER). On the other hand is tax deductible. I don’t count it as expenses but rather as investment. Even if it might be a shit one :). However I will stop paying in it soon anyway.
      If you see the light at the end of the FIRE tunnel, you don’t really need pension plan. Pension plans are mostly very ineficient and you make other people rich and happy with it. If you have a choice (employers don’t really) I would learn and invest myself rather than puttin my future finances in somebody else’s hands.

  • amber tree

    Great to share the numbers. Living on 30K per year is quite nice… We are above that, mainly due to the mortgage we still have.
    One question: where/how do you account for Holiday? The great FIRE week in Budapest as an example.

    • I think 30K is quite a lot. We still spend a lot of money on stuff that we don’t really need or could be avoided with some good old badassity. 2016 will be a lot as well but we need to get our asses back under control next year…some radical changes coming…
      All travels, holidays are under “Entertainment” btw

      • amber tree

        Thx to clarify… the question we asked ourselves: how badass do we want to be? On some domains: not at all… Our ski trip this year alone will create a 4,5K travel expense. Some others to add as well. The absolute number is not that important to us, the balance between life and that number is.

        • I don’t want to save on anything that we enjoy, on anything that’s worth it. I’m talking about ridiculous expenses that doesn’t add to our happiness at all. Also, since we talk about holidays: we could spend a week somewhere in Europe and pay over 1K on hotels. This can be completely replaced with couchsurfing that cost next to nothing and is (for us) sooooo much more fun. In fact, since I discovered couchsurfing I really don’t enjoy staying in hotels at all…Sometimes and in some case this is not an option though (like skiing).
          So there are many ways of doing what you want, what you love and reduce the expences to a minimum. I have to admit we got a bit lazy at badassity and buy ourselves shortcuts. But If we were not FI, I would cut the devil in 4 (romanian expression :)) and cut all costs that can be avoided while fully enjoying life and doing exactly what makes me happy.

  • Juliane

    Very interesting, indeed!

    We have 1 child and spend about 2.300 € per month that sum up to 27.600 € per year.
    We’re lucky because my employer pays for the childcare. On the other hand, we own a car which is not yet paid-off. That amounts to transportation costs of 550 €/month!! And we live in a rental appartment and pay 440 €/month for it.

    I wish more blogger would share their expenses in detail like you do.
    Comparing costs is very valuable information!

    • thanks for stepping by Juliane.
      Thanks for sharing your total expenses as well. What’s really interesing for me is that this 30K number (+-2K) seems to be pretty good average for a family of 3 or 4. As you might now Mr Money Mustache shares his expenses too and he’s very close to this number as well (ok, in dollars but that’s very comparable).
      I have a feeling that 30K is a level of expenses (both in Germany and US) that allows a family of 3 or 4 to live very well. It may be a “magic average”.
      Looking forward to other people sharing their expenses too.
      Ah..and btw…congrats for renting a 440€ appartment. Never buy as long as you pay so little rent. We’re paying 300€ utilities only….

  • Ankur Garg

    Hello Robert, Thanks for sharing this information. How do you use this information in your day to day life?

    Unfortunately I never tracked my expenses…..

    Between 1999-2003, I lived on 20€ a month during my college days in India and it was yet the best part of my life. The first time I flew in life was on the plane to Germany. Between 2003-2005 in Germany, I lived on 380€ a month through a hiwi job in university and even managed to save money, around that time my food expenses were 25€ a month, I remember to have tracked it once. Again it was a very happy phase of my life.
    Sad enough, the problems arose when I were receiving 4-5 digits monthly salary.

    • Always good to see you here Ankur!
      I’m sorry for you. Since you never tracked your expenses you will probably end up in Spenders Hell and you’ll have to spend at least 8 hours a day listening to Paris Hilton (just listening mate, just listening!) :)))
      Anyway, it’s clear for me as well that the level of expenses has absolutely nothing to do with your level of happiness and fulfillment. I have a very similar story to yours. In fact I had a Hiwi job (400€) at a german university as well :). My food bill was about 10-12€ a week. Still I had such a great time and even did a fair amout of travel!
      To answer you question. How do I use this information? I look at it at the end of the month and reflect on it. Ask questions. Why so high? Why so low? If too high, was it worth spending those 100€ more on restaurants? Did it make us happy? Or would it make us happier if next month we don’t go out that much and just donate that money?…
      Basically it helps me be in control of stupid, avoidable, non-happiness-resulting expenses.

  • Comper

    Hey I’m from germany too and I really like your blog. Very impressive, that you keep track of all your expenses over a very long time period.
    I also made a list of my living expenses: http://freimit45.blogspot.de/2016/11/ausgaben.html

    Looking forward to a new blog post 🙂

    • hey! Good to see a new blog! You ahve impressively low costs. Are these costs of yours for the whole family together?
      Good luck with your blog and looking forward to seeing you around here again!

      • Comper

        This is for the whole family.
        Buttt these are just the fixed costs. So holidays, entertaiment, savings are on top of that. Also we need to pay the credit from our house a few more years but i will make a blog post about this topic soon.

  • Wherethewild

    How did you get the kids on state healthcare when you aren’t? I’m state insured and my husband is private and we were not allowed to insure the kids via me, instead they have to be private with my husband. We were told if one parent is private then the kids must be insured via them. Our insurance costs just for DH and kids are 1088€/month!

    • very good question and good you asked. This is where German law gets exciting.
      I have a private healthinsurance, Mrs W has a state insurance. If I have a “profit” that is lower than 57600 (Jahresarbeitsentgeltgrenze- JAEG) in 2017, then the kids can be insured for free with my wife (Familienversicherung). This is true only if I am the main earner in the family.
      If I earn more than that, I have to privately insure my kids for about 150€/month each. So if one is slightly over this profit, one should watch that carefully and maybe have some more deductible expenses (buy a news martphone?).
      More details: if you are over this limit, you have to make sure that you make your tax return as late as possible (even if you get fined maybe) because the kids have to be insured only from the day the Steuerbescheid is issued! In other words, if in 2016 i have 60K profit, (over this JAEG), and I can delay my tax return paper (Steuerbescheid) until mid 2018. The kids have to be privately insured from mid 2018 (not from 2016!).
      Which is pretty interesting because you can then make sure to lower you profit in 2017 and file the tax return for 2016 and 2017 directly one after the other in mid 2018. Let’s say you get your Steuerbescheid for2016 in 1st may 2018 and you get your Steuerbescheid for 2017 on 1st of june, you only have to privately insure your kids 1 month! 🙂
      I had very interesting conversations with the health insurance people to figure this out 🙂

      Check this out. http://www.finanzen.de/news/17486/neue-versicherungspflichtgrenze-2017-erschwert-zugang-zur-pkv

  • Thanks for sharing your numbers W!
    Your family of four spends half mine of two… shame on me!

    p.s. “Children don’t really cost much at all”… don’t ever think about moving to Switzerland then! 🙂

    • well, we all know that Switzerland is a completely different univers when ti comes to costs, so no wonder you have twice our costs. Some would even believe you’re frugal :)))
      No, We’re not planning on moving to switzerland. Maybe we’ll come on holiday paid by passive income…even then, we’ll probably prepare sandwiches from home and avoid restaurants 🙂

  • thanks for sharing the numbers.
    I calculate monthly, but not for 2016. I will calculate. As far as I can say, we spend more for house (mortgage: around 35-40% from the revenues, 20% for food, 20-25% for fun (holidays, party gifts, books, beer etc).
    Edit: I realize I am happy with this distribution!! it present my happiness source of life: our house, quality food(we are healthy), enough fun.

    As for children, as a mother of 9 years old girl, I can tell you the child is as expensive as the parents want. This rule is not applied for teenagers 😀 😀

  • Aruun Kumarr M

    I am an STEM Engineer, is 51000 P.A. sufficient for a family of 3 and save for future?

    • Hi! Which city do u live? If the answer is Munich, it’ll be difficult. In smaller cities you can reduce your costs a lot if you use some life hahacks ( no car, used furniture etc). Food is generally pretty cap in DE.

  • James L.

    Very nice article. Thx.

    What would be the cost of living for a family of 4 ( couple with two kids ) to live in Dresden ? 3.000EUR–net would be enough ? Initially my wife will not work, so I believe I will be on Tax Category 3, right ?
    Thanks for you help!

    • we lived in stuttgart. We’ve spent 2200-2400€ per month. Of which about 550 was Health Insurance and another 550€ was childcare. We didn’t pay rent, just about 300€ of housing cost. We had no car. We wrote articles about our expenses, lokk in the archives. You can understand better what our costs were.
      Dresden should be cheaper. 3000€ net should be definatelly enough if you don’t spend on stupid things.
      Don’t worry about Tax Category very much. That only refers to how much pre-payment you are paying every month. After the year is over, you sould do your tax and then they’ll calculate your tax. Ask your colleagues or (yes!) the Finanzamt about what Tax Category you should be.
      You have a tax allowance of 9000 euros per adult and about 8000€ per child (which includes the Kindergeld). We wrote articles about how to pay 0 tax in Germany. Look for it!