Lower Tax Brackets

Our government is thinking of lowering our income tax brackets. Actually, the majority already agreed on this idea. It’s sort of a compensation for lowering the mortgage tax break. We have four tax brackets in The Netherlands.

Tax bracket 1: €0 up to and including €19.645 37% tax (it’s not clear to me whether this will change)
Tax bracket 2: €19.645 up to and including €33.363 from 42% to 38%. (The average Joe in our country earns about €33.000)
Tax bracket 3: €33.363 up to and including €55.991 from 42% to 38%.
Tax bracket 4: €55.991 and up from 52% to 50%.

Good news!

How much income tax do you have to pay?

Love,

Mrs EconoWiser

Grandma’s Shopping Spree

Yesterday we went to a baby store for the first time. I’m just not the type to “go shopping” when I found out I was pregnant. All the gear and especially the prices made me a bit dizzy. Apparently, most first time parents spend thousands on baby stuff.

Anyway, my mother (who now calls herself grandma-to-be :-)) wanted to buy her first grandchild a big present. Actually, we already agreed on her buying us a baby stool for the kid. We found out that a Tripp Trapp stool is the most durable thing one can have. It’s also very difficult to get them second-hand because one can use them for the first decade of a child’s life. Friends have had theirs for over ten years and are still using them. So we went to the store, grandma bought a white version including new-born carrier, a toddler harnas and cute lining.

White chair + new-born seat + beige textile

Baby seat

Cushions (our chair is white)

 

Pictures taken from Stokke.com

It’s a big present indeed, isn’t it?! We’re very happy with this gift. It was also a bonus that the chair was on sale at this specific baby store. Moreover, my mother’s best friend works at this store and through her she got an extra 15% discount. The whole package cost granny (and gramps…he’s not the type of person to go shopping at baby stores) €320. I would have really offended them if I didn’t take the gift or go shopping this big present for their first grandchild.

What would you have done?

Love,

Mrs EconoWiser

This And That

These past couple of days I’ve been working on the side business quite a bit. It was time to send the newsletter and that paid off.

Furthermore, I’ve been arranging household thingies like renegotiating our gas and electricity prices for the next year. I saved us a couple of hundred euros in less than half an hour. Loved it!

I also decluttered the pantry and tossed out things that were expired. Oops… Now, I’m going to make do with whatever we have left. That’s sort of saving on the grocery bill.

I’ve also arranged a couple of maternity classes (yoga, breast-feeding and pregnancy for 2) I’m going to take and my medical insurance will cover all of those. Another €200 saved.

It feels good to declutter, get things organized and done with.

Next week Monday we’re going to the hospital to have a look at the “delivery suite” and gather more information on having a baby there. Cool!

Mondays are sort of my housewife days…haha!

Love,

Mrs EconoWiser

Extra Investment

The husband wants to drop €3.000 into index investments in one go. Since our emergency fund contains more than enough dough, we can’t make extra mortgage payments and we don’t have any other debts to repay. The money is just sitting there in his bank account and he “doesn’t know what to do with it”.

I just had a quick look at our investment broker’s website and it turns out that the first time you’re making an extra investment you have to invest a minimum of €10.000! After that, there are no minimums. Argh… He could open a brokerage account with another broker, at the same TERs. However, they don’t have the interesting dividend tax-break advantage. Turns out we can make extra payments of any amount since we’re already investing on a monthly basis. Thanks, Jane!

I was thinking he could adjust his monthly investment to €3.000 and then change it after the transaction is made. However, that way he can only purchase stocks at the end of each month and he’s probably too late for this month’s transaction.

Also: we’re in a bull market now. The index funds we like are at an all time high. I know I know I know that timing the market is not the smartest thing and it’s all about time in the market…but we can’t help thinking that it’s gonna drop. We obviously don’t know when. Maybe we’ll have tens of thousands saved by then to drop into index funds in one go?!

MSCI world-wide index funds (taken from Meesman’s website, our favourite Dutch broker!)

Jeez…the things you need to think about when investing.

What would you do?

Love,

Mrs EconoWiser

Persuasion

I nagged the husband to read jlcollinsnh’s stock series and other related posts which is an extremely valuable addition and resource to J’s fantastic blog. If you haven’t read those posts yet, I strongly recommend that you do. The husband reluctantly began reading them during his daily train commutes. I stopped talking about the subject for a bit.

Yesterday out of the blue he mentioned: “I should invest more.” Huh? Say what? “Yeah, so I’ve been reading jlcollinsnh and all of a sudden I feel the urge to invest more. He never tells readers that they MUST do this and that and follow certain rules. I don’t know what it is…it just made me feel I should invest more. I also love his writing style.”

Yay! I guess I’ll be feeding him even more resources from now on so he can make up his mind on what to do. The biggest hurdle is making a decision on asset allocation, believing in it and then sticking to it. Oh, that’s three hurdles. Well, I’m sure we’ll get there. We’ve already made a good start, I like to think.

Are you and your spouse on the same page when it comes to investing?

Love,

Mrs EconoWiser

Parental Leave

Today I read about the rules on maternity leave and I calculated when I’ll be on maternity leave. It’s probably from 11th of February till 20th June. I’ll have to work for about seven days…and then the six-week summer holidays start. If I deliver the baby later than 22nd March those days will be extracted from the seven days that I’d still have to work. That’s a long time, I know. We take care of our pregnant women here in The Netherlands.

However, I also read about parental leave. This differs per company. The company I work for offers a great parental leave deal. Basically it comes down to the following. My work is divided into four blocks per year. Since I work four days a week I have to work 332 hours per block, 1327 hours per year. The company offers 25% of your yearly workload parental leave at 75% pay. This applies to each child until they’ve reached the age of four. This means that I could take 1 block of sabbatical after having my first child. I intend to “save” that time until I’ve had a second child and then have a sabbatical of 2 blocks, which is one semester. I still have to talk to my supervisor about this plan. Some colleagues decide to work one day less for a year or so and “spend” the days they were given that way. I’m in favour of a sabbatical. I mean, six months off at 75% pay…I’d be crazy to pass that, wouldn’t I?!

What would you do? Do you have similar arrangements at work?

Love,

Mrs EconoWiser

Buying A Home Is Now Cheaper Than Renting

According to this article buying a home in The Netherlands is now cheaper than renting one. For years it has been the case that renting was a lot cheaper over here. Especially renting via our organized rental housing system. It would take you a couple of years on the waiting list but if you were one of the lucky ones to actually be assigned one of these homes you’d spend a small amount of your income on rent each month. This is also why landlording in The Netherlands was never a very lucrative business. As a landlord you’d have to compete with the inexpensive rental housing system. All that has now changed, they say.

I never lived in a rental house that I got through the system. However, I lived in a very very very cheap house for ten years. It was supposed to get demolished, but that never happened. The owner didn’t take care of the building at all. He only helped us in emergencies, like when the roof leaked. After about three years my then boyfriend now husband came to live with me in that house. For all those ten years I/we paid €350 a month for a detached four bedroom home. That’s cheap as chips! That’s also why we were lucky enough to save a shitload of money.

Now, our mortgage is about four times that amount. But in the end, we’ll own this home. The last couple of months in the rental were very unhealthy. Mold got the better of the building.

How about rentals in your country?

Love,

Mrs EconoWiser

Taking Care Of Baby Business

Today we’re going to ask my brother-in-law and his wife to take care of our kid(s) if we were both to die before the kid(s) reach(es) the age of eighteen. They’re wonderful parents and we definitely agree with their parenting. Hell, we’d take parenting classes with them if they’d offer! I also like the fact that they are frugal people. So our norms and values would still be ingrained into our kid(s).

Of course they have the right to say no. In that case, we’ll have to reconsider which people we’d like to ask instead.

We’ll also have to go to our attorney and change our wills. That’s something we’ll do in a later stage. There’s still enough time for that part of the practical baby business thing.

How have you arranged these things?

Love,

Mrs EconoWiser

The Birthday Mini Break

Ah, the birthday mini break. It was great! We went to a little picturesque village called Dwingeloo and had a blast. We took our own bikes there and we cycled a lot in the area. We also went to this Dutch heritage park (Veenpark) about the history of our moors. Poor people used to build houses from peat and also dug it up to use for fires.

Anyway, the whole thing set me back about €450. Yes, it was rather luxurious. We ate in restaurants and slept in a comfortable hotel room. The memory…priceless.

Love,

Mrs EconoWiser

The Global Rich List

Holland is a rich country and its inhabitants are very wealthy, even though sometimes they’re not aware of it. A person on welfare nets around €10.000 a year (including benefits) and according to the global rich list that income puts that person in the top 13% richest people in the world!

Somebody else who nets around €25.000 (including benefits) here in The Netherlands is in the top 2% richest people of the world. The top 1.28% to be exact! In my opinion, this is quite a regular income for somebody who went to college or university and works an average job. If you net around €28.000 (including benefits) a year you’ve made it into the top 1%! There are only 63 million people in the whole world richer than you. Errr…these people are regular persons here in The Netherlands. They’re not the evil people who control the world with the power of their money Occupy was all about when they talked about the top 1%. Maybe they should change that to the top 0.1%? (I’m not making any statements here about the ideas of occupy, I’m just questioning their numbers. The Wall Street high flyers were whom they were after and they’re much higher up on the list)

These numbers really made me aware of how wealthy our nation already is. Why are we complaining so much? It has also caused me to appreciate our wealth even more.

Is this list an eye opener for you as well?

Love,

Mrs EconoWiser