Our 2016 Expenses with 2 Kids in Germany

As you might know, I’m a bit of a numbers guy and I’ve been keeping track of my expenses for the last 12 years or so.

I find it quite interesting to see what friends and people around us with a similar setup (i.e. families with kids) spend each month. It’s good to compare. It’s also a good way to see what expenses we could potentially have down the road as the kids get older. It’s important to have a realistic estimation of your future expenses if you plan to retire early. You can’t just assume things…

I keep finding interesting numbers on other blogs that lead me to get in touch and ask questions about specific spending categories to help us optimise our own situation.

After last year’s expenses edition, here are the 2016 numbers:

17.4% Kids: €5040/year (€420/month)
16.7% Food: €4820 (€401)
16.5% Entertainment: €4790 (€400)
15.2% Insurance (incl. health): €4400 (€370)
14.3% Housing* (utilities, heating etc.): €4150 (€350)
4.8% Gifts: €1400 (€120)
3.8% Healthcare: €1100 (€90)
2.5% Transport: €720 (€60)
2.2% Clothes: €650 (€50)
2.1% Phone, Internet: €610 (€50)
1.8% Accountant’s fees: €510 (€40)
1,7% Household: €490 (€40)
0.7% Memberships: €220 (€20)
0.2% Bureaucracy: €50 (€0)
0% Bank charges: €10 (€0)


Total 2016: €28,950 (€2412 per month)


Context (2015 vs 2016)

Our expenses went down from 30,374€ in 2015 to 28,950€ in 2016, but actually the difference is very minimal within the individual catagories:


Some random insights and toughts

Constant numbers: The difference between the 2015 and 2016 expenses was pretty much the (completely wasted) education expenses of approx 1000€ that Mrs. W racked up for her fitness instructor course, which were replaced by 0€ in 2016. “We don’t need no [expensive] e-du-ca-tion!” (Mrs. W. edit: I was going through a crisis, I was trying to reinvent myself. Turns out the new me isn’t a fitness instructor. Mr. W. should be happy I agreed to give it up so we could continue to be location independent!)

Apart from that, it’s pretty surprising for us how little difference in overall cost there is. Look at food: no difference at all, even though we had a completely different diet: low carb in 2015 and normal in 2016. Hmmm…

That food wasn’t only food though… no-no…because we sneaked alcoholic beverages in there too. Mostly nice wines and gin. Oh yes. Do you want to know how much alcohol we drank in 2016? Here you go: 356€ worth! Is that a lot? I don’t think we overdid it even though we like to sip away at a nice glass of wine or so every evening. That’s about 50 cents worth of quality alcoholic beverage each and every day. I don’t want to give that up… Every drop of that red wine made us a drop happier or at least helped us to recover from the daily “putting-those-monsters-to-bed” circus!

I don’t have concrete numbers, but I suspect that since we’ve had kids our expenses for alcohol probably went up. I don’t know how other parents can cope without a nice G&T or the like after those energy-sucking humanlets finally bugger off to sleep….

And restaurants? We spent 664€ all year. That’s about 13€ per week. Most of that money didn’t make us happier. I have to admit, we simply got lazier with cooking…

Kids. The expensive part of having children is not all the stuff we buy them or feeding them but the childcare. We spent about 3500€ on that which is about 70% of all our kid-related expenses!

But hey. Let’s not forget about the fact that we got at least 4560€ of family allowance which covered 90% of all our kid-related expenses (including childcare!). So our net kid-related costs were at most 480€. Why “at most”? Because in Germany you either get family allowance of 190€ per month per kid or you get a tax benefit. If your income is high (>60K for a couple), the tax benefit is higher than 190€ per month per kid.

Anyway, thank you German Tax Authority for paying for our kids! We really (honestly) appreciate that! (Hey Americans…do you actually believe that the US is the greatest country in the world?).

I guess an average German family spends a tiny bit more on their children. But if you buy used furniture, clothes, toys etc., other parents virtually pay you to take stuff off them. We loooove jumble sales!

I didn’t do the calculations yet (but we will), but I suspect the kids don’t cost anything… Well…what hurts financially is all the income you lose when one of the parents doesn’t work…but that’s a different story. (*UPDATE: I did the calculations and during the first 4.5 years of parenting our kids actually made us some profit. Read here about our kids expenses in Germany…)

While I see many ridiculous financial decisions around us, we’re not free of stupid spending habits either. It is reaaaalllly frustrating to see how money goes towards things that are not necessary and don’t make us any happier (like: overpriced low quality restaurant food and beverages or that stupid TV tax [GEZ]).

We’ll keep on fighting this war though until we reach expense-optimisation nirvana. Promise!

Also, I’m very excited to write the expense report for 2017. After moving to Romania this month, we’ll cut our expenses in half at least…

So. Are we spendypants? Do you think we spend too much or too little on things? What do your expenses look like?

  • Jeffrey Fredrick

    I’ll be curious to learn if any of your expenses go up in Romania. Are there are any you’ve identified yet that are likely to be higher? For example, what will the net impact be from the loss of the German family allowance?

    And good job to Mrs W on her edit! In addition to the location independence I think if she got through an identify crisis so cheaply you should be kissing the ground at her feet. 🙂

    Jtf

    • Welcome Jeff! 🙂
      The only expense I can imagine going up is travel. Since we’ll traver 1-2 times per year to Scotland to visit Mrs W’s family, flights might cost more from Romania since there’s no direct connection. A roundtrip could easily cost 1000€ since we’re paying 4 full tickets.
      Did I mention at any point losing german family allowance? 🙂 The tax authority gave me some advice (no bullshit here) without even asking…But I’ll write about that if I see that actually happening.
      Unfortunatelly I’m still the family champion in wasting money, so you’re probably right, I should be happy she got through that crisis with only 1K loss…

      • Ines

        I am amazed by your expenses! I know Frankfurt is more expensive than Berlin but still.. Congrats!!!
        Can you still get the family allowance if you move abroad? I am interested in knowing more about that 🙂 I will probably be in the same situation as you soon (moving into a low cost country!) and of course I would love to keep it!
        https://piggy-banking.com/

        • in a nutshell: if your main income is coming from Germany, and your income in the country you move in is lower than the personal tax allowance (8.6K/pers) then you get the german family allowance (substracted by the local family allowance). Which should be our case. But again: I will write about it if we actually go through the whole bureaucratic process (which I am really looking forward to!).

          • Ines

            Great, looking forward to hear more about it 🙂 good luck!

  • your numbers are perfect because you spent less than you gained.

    I am sure in Romania the budget for kids and food will be reduced at a half.

    • haha. I would call it perfect when I stop seonding money on stupid things 🙂

  • Able was I ERE

    I’m curious to see the calculations of whether your children cost you anything. Our three certainly cost us some, but are well worth the cost. Our direct child expenses in a some-what major Austria city total ~€10k for kindergarten, travel, estimated extra food, music lessons, and child-specific entertainment. This is over twice as much as we get back from the government.

    • welcome to the Blog! I think we’ll have fun doing those calculations! 🙂 It doesn’t surprise me the you have about 10K costs in an Austrian city with 3 kids. Our kids are still small so we don’t have any cost with music lessones or alike. Also, in this post I didn’t estimare food cost for the kids. In the childcare cost though a lunch a day is included though.

    • Can you tell us a bit more about the tax benefits, family allowance etc in Austria?
      Do you blog?

      • Able was I ERE

        The government benefits are more than I thought—I’d never totaled up before because they come from different sources at different times. For three kids, we get ~€8.6k total: €5k / year via Family Allowance (Familienbeihilfe), €2.1k via child tax credits (Kinderabsetzbetrag), ~€0.9k via the sole earner credit (Alleinverdienerabsetzbetrag) and ~€0.6k in benefit from the child tax deduction (Kinderfreibetrag).

        Additionally, Austrian has a tax deduction for child care (Kinderbetreuungskosten), which could be worth up to ~€2k for us this year. The city also has a child care subsidy, but we are ineligible due to income.

        For us, the expenses match our values. The majority is for a private kindergarten in nature. Another large chunk is a trans-Atlantic flight to visit to family. We are a musical family, so instrument lessons are highly valued. The kids are also in choir, but the cost is minimal (€20 / year each).

        I don’t blog currently, but I occasionally post on the MMM and ERE forums (including an infrequently-updated journal).

        • interesting! Thanks for sharing. If you dig deeper you might find that your kids don’t cost anything at all! 🙂
          We have some deductions for childcare as well which I must not forget at my Child-Cost post…

  • Interesting to see the expenses breakdown.
    > Every drop of that red wine made us a drop happier or at least helped us to recover from the daily “putting-those-monsters-to-bed” circus!
    Laughed hard at this one 🙂 !

    By the way, I am curious how do you keep track of your expenses and come up with these visualizations. Did you manually note them down? Or does your bank account provides this pie-chart visualizatios?

    • Well, we use YNAB to track expenses but we centralise them in Excel. For the visoalisation I used an online tool which was stupid because I cold have used YNAB. My comparison chart was Excel. I love Excel.
      Where are you from? What’s your story?

      • Great, will check YNAB out.
        I am from India, I already posted a short intro of myself in the FB group in the new member sections.
        Maybe you forgot 😉 ?

  • Comper

    Awesome breakdown!
    I think you are doing a great job with your expenses. I wouldn’t try to cut down the costs for food or good wine. Really interested to see how your expenses change when you move to romania!
    Best wishes Comper

    • talking on wine expenses, I have to admint I do pay attention to avoid buying expensive wine. I noticed that generally 10€/bottle wines are not much better then 2,5-4€ ones. So the cost difference is not worth it. 10€ wines (or what I call expensive) are for special occasions. For everyday drinking I stick with 2,5-3€ ones and I am impressed how good they are relative to price. Wine is cheap in Germany! Even in Romania you’ll pay more for the smae quality.

      • Comper

        Yes we drink wine nearly the same way. Usually we pay 3-6€ per bottle. (from a local wine producer) When we have a special date we drink 10€ wine/sparkling wine. I think it also depends on the varietal. Some are harder to produce so they cost more money and very often they taste better.
        But you can find shitty wine for 10€ and for 3€. You just have to test what you really like. I think wine tastings (local producer) are perfect for this!

        • I am a big fan of supporting local wine producers but on the other hand I feel ripped off paying 10-12€ a bottle for a Baden-Württenberg wine that’s just poor. Life’s too short…

          • Comper

            Yes BW has great wines. Here in Rhineland Palatinate/Hesse you can find wines in every price range from your local producer. 3€/L up to 30€/Bottle usually. Our favourite varietal gray burgundy costs usually 5-6 bucks and is worth every penny of it.

        • for our wedding we only had local german wine and we loved it! It always feels good to support local producers and not feel very ripped off at the same time!

  • amber tree

    Good that you have all these details to see where you could improve.
    I am amazed by your low budget. Curious to see how 2017 will come in for you

    Ours is higher. One item is the mortgage. Then we have intentional high holiday budget. And eating out as a family adds to our lifejoy.

    (Great edit from ms wlcb)

    • Hey ATL! I’d loooove to have an international holiday budget! But since we have some (…how to put it?!) “challenging” monsters in our house…we can’t really do that. Yet. But fun times are going to come upon us!

      Yeah, the mortgage is destroying the expenses charts for most families. We were lucky we bought our flat before tha prices exploded. On the other hand I worked basically day and night to pay it off.

    • Amber, that’s why I consider my mortgage as an investment: it returns some deductible revenues (as freelancer but as Belgium tax payer), and when we move to Costa Rica on the beach with return a revenue, but until there it returns comfort and stability and replace the section = rent. Don’t forget: a rent is never ending but the mortgage yes.
      Me too I have a international holiday budget. This again is an investment 😀 (for D vitamine – I am aalmost convinced the doctor for the need 😀 ) and I hope to take more.

      Off topic: I appreciate Dutch speakers that are taking their children everywhere as calm and natural they can (I remember on the beach on Tenerife a Dutch speaking family with 4 children, one in stroller, 2 in the water, another one running close to the water without courrage to go in with his brothers :D)

  • James Barrett

    Really interesting post (and blog generally)!

    I don’t have children and don’t live with my partner – but it’s helpful to get an insight into how other people spend. The overheads of running a house are largely the same, whether you are four people or one.

    I’m based in London, but spend a lot of time in Germany – I’m always amazed at how much cheaper food and wine is there. That said tools and anything made of metal seems to be significantly more expensive to the point where I bring them from the UK.

    Looking forward to hearing about cost comparisons with Romania (I lived in Bucharest as a student) I’m wondering whether it will be more expensive.

    Thanks for a great blog!

    • hey. Thanks for stepping by! Germany is indeed pretty cheep foodwise. Basic food products are even chaper than romania. Don’t know why but butter and oil and things like that are 20-50% more expensive in Romania…
      We’re also looking forward to an expense comparison!

      • grossermanitu

        We have a very strong competition among food dicounter in germany (Aldi, Netto, Lidl, Norma). The government supports indirect the competition. As Norma was interested to buy Tengelmann the Bundeskartellamt prohibited this acquisition. In addition we germans have a saving mentality that was induced after the 2nd world war, adapted by the next generation and supported by the discounters itself “Geiz ist geil”. This leads that we go there where we get the cheapest price for our food products, even if we have to change the supermarket 2-times per day.

        • indeed. In DE you have a real competition. In Romania, it seems liket they settled the prices…

  • everything is ok? You didn’t write for a while, sir!

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