“Sitting in the same office from 9 a.m. to 5 p.m. every day until I can retire at 67? My job is fun, but I didn’t want that,” wrote 32-year-old Oliver Noelting in his blog.
Noelting, a self-described “frugalist,” saves 60% of his income and lives on just $1,047 (€870) per month despite having a family to support. He does this with a simple goal in mind: financial freedom.
Although he initially wanted to have enough money saved and invested to be able to retire at 40, Noelting has since revised his plan a little.
In an interview with Business Insider Deutschland, he spilled his savings secrets.
Living on $1,047 a month
In 2020, Noelting spent an average of just $1,047 per month. During the first lockdown in March, this amount decreased to $758 (€630).
“I don’t feel like I’m going without,” the blogger said.
He currently works around 24 hours per week as a software developer at an online tax return provider, and between six and ten extra hours as a self-employed programmer.
Noelting has been using Excel spreadsheets to monitor his income and expenses since 2013. He said a budget was the first thing he would recommend to those looking to save.
“You get a sense of where all the money is going,” he said. This process has to be followed by reflecting on what you actually want and what brings you happiness, and which of your spending behaviors are out of laziness or bad habits.
“The second thing I find important is a positive-optimistic attitude to life,” he said. “I’m happy with what I have. People often buy something just because they feel something’s missing.”
His third savings tip is to start cutting spending from the top-down, which means housing is the first place to start.
“That way you save automatically every month,” said Noelting. He goes for a place as big as necessary and as small as possible, and currently lives with his girlfriend and their daughter in a 46-square-meter, two-bedroom apartment.
“We use the living space efficiently. We also live close to work, which saves time and also the high cost of maintaining a car,” he said. The small living space also means lower utility costs.
Savings give you the freedom to try new things
A bank of savings gives you the freedom to reduce your working hours, take longer periods of parental leave or a sabbatical, or even start up your own business.
However, Noelting said he was no longer fixated on retiring at 40. “My new ideology is becoming more independent and free, although that might mean that the ultimate freedom of retirement gets pushed back a little,” he said.
His reduced working hours have also given him more time with his family, which he thinks is important as you set the tone for the rest of your life in your 20s and 30s.
“You’re laying the groundwork for a healthy, happy, and successful life,” Noelting said.
‘I don’t need to have everything anymore’
The blogger acknowledged that these saving habits aren’t easy, especially for those living in expensive cities.
However, he believes part and parcel of “frugalism” is finding innovative solutions — whether it’s finding a smaller apartment or moving further away from work and using an e-bike to commute.
Noelting himself often goes the extra mile to try and save money. For example, he cut utility costs by ordering different showerheads and testing which one saved the most water. He also pays attention to power consumption when purchasing technical equipment, and favors LED lamps.
Creative alternatives are also a big part of his process, whether it’s repairing, borrowing, inventing, or asking friends.
“I don’t need to have everything anymore,” he added. To this day most of his purchases are pre-owned, for example on eBay Classifieds.
The thought, “Everything I buy will be thrown away one day,” encouraged Noelting to adopt this approach.
He doesn’t see it as renunciation and pointed out that it can be harmful for people to deny themselves their pleasures.
Those with very little time to spare might also find it difficult to cut spending.
“When I was a student, I did a lot of things myself because I had the time,” he said. “Today, as a working father, it’s not so easy.”
‘Is this worth it to me?’
However, Noelting isn’t frugal to the point that he would turn down an experience to avoid splashing out. He enjoys evenings out with friends and has even taken a $1,200 sailing vacation.
“I always ask myself the question, ‘Is this worth it to me?'” Noelting said. This has also led to his family moving to a slightly larger apartment, although he managed to secure that with a favorable offer, too.
Noelting believes that saving money should begin as soon as possible after graduation and from your very first job.
“If you have savings already set aside, you can be much more relaxed in life,” he said. “Because of our frugal lifestyle, we have a lot more freedom.”
Part of this freedom includes not being constricted by external factors such as childcare providers or a fixed work schedule. When his daughter grows up, Noelting wants to make sure she understands his principles, too.
“I want to teach my daughter that money doesn’t grow on trees, and you can still be happy even if you don’t have a lot of money,” he said.