Financial freedom if you’re older and live in a high-tax country?

P1000220Some people seem always to have had their heads screwed on properly where money’s concerned. For instance, Mr Money Mustache and the guy behind Brave New Life either retired or switched to part-time work in their 30s with their mortgages already paid off. I, on the other hand, am 35 and hoping to take out my first mortgage next year. So what do you do if you don’t want your life to be dominated by work but you don’t start being sensible with money until you’re in sight of the big 4-0? And while we’re about it, what if you live in a high-tax country (I live in the Netherlands, but a lot of other European countries would qualify too) with excellent public services funded by an income tax rate that would make an American wince? I think a lot of people reading this right now probably tick at least one of those boxes, so while I love both the blogs I’ve just mentioned I want to look at things from a different perspective.

Let’s start with age. To be fair, I’ve never been completely stupid with money, and I was lucky enough to graduate debt-free. After that I went back to Russia and stayed there for another three years. I’m so glad I did that, but I couldn’t build up savings there: a huge sum in Russia would have been worth much less when I came back to Western Europe, because of the income and price differences. I did start putting money aside after I moved to Spain, but it practically evaporated in the two years I spent in Switzerland: I was studying part-time (until June 2012), and the cost of living’s way higher in Geneva than in Spain. That brings me up to last year, when I moved here – and in February I started studying for another degree.

So as you can imagine, my finances are nowhere near as healthy as they would be if I’d been saving sensibly all this time. And the money coming into our household now gets taxed at a pretty high rate.

That means we need to be sensible, especially if we want a family. Instead, though, I wrote here only last week about how shocked I was at our monthly spending. I still am shocked at it, and especially at the fact that inessentials accounted for more than a third of what we spent. Should I be panicking?

Well, I’m not panicking, whether I should be or not. The mortgage is inevitable, and we’ll almost certainly have it until we’re getting on a bit. I should come clean and tell you that I had a pretty big windfall at the beginning of this year; that will make the mortgage smaller, but probably not shorter. Lifestyle-wise, though, things aren’t bad: I’m only working part-time, and the barriers to my other half doing so seem to be the norms in his line of work rather than money, so we’re already doing quite well. I’m not on a relentless treadmill of work and stress. Instead of just working, I’m also dancing, studying, reading and even learning to play the piano. On the other hand, I am still pushed for time, and my other half is even more so.

I’d love to make our lives more financially efficient so that we have a better quality of life, and that’s really what this blog’s about. I’ve only just started making the necessary changes, but I want to show that it can be done even if you don’t do all the right things when you’re young and even if you don’t live somewhere with small government and low taxes.

At the end of the day I think it’s always going to take an effort to achieve a high quality of life with a middling income. On the other hand, what’s wrong with that? Most things that are worth having are difficult to achieve – that’s partly why they’re worth having in the first place. But why complain just because it’s not easy? We’re adults, after all, we should be able to cope with a bit of difficulty. Besides, the effort’s good for you both physically and mentally.

I don’t regret what I’ve done with money in the past. I had so many new experiences in Russia that I can’t even imagine what I’d be like now if I’d never lived there. And although I wasn’t impressed with the MA I started in Geneva and didn’t like the city, I made memories there I wouldn’t want to be without. Besides, surely regret is something you should feel if you’ve hurt someone or done something deeply immoral, not just because you’ve been a bit daft. That said, I’m glad I’ve come to my financial senses now, and the changes I’m making at the moment are proving a pretty major gear change.

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