Good news: higher income! Bad news: expenses got out of hand.
In our original 5-year plan, we anticipated potential disruptions like children or buying a house. However, we thought these milestones were still years away. But after some reflection, we asked ourselves: why wait to be happy?
So, in a whirlwind of major life decisions, we got married, switched jobs, moved back to Aarhus, bought a house, a car, and had two kids. The past few years have been a joyful, chaotic ride, but one downside has been losing track of our financial plan amidst the upheaval.
We tried to stay frugal—meal planning, avoiding unnecessary purchases—but the reality of moving from an apartment to a house meant buying furniture, garden tools, and the essentials for two small children. While we made an effort to buy second-hand, it wasn’t always possible. By 2023, our finances felt more like survival mode than strategy.
Thankfully, 2024 brought more stability, allowing us to review our spending, reassess our goals, and determine how to continue pursuing financial independence.
Assets: Where We Stand in 2025
The big milestone? We’ve hit 5 million kroner in assets!
This is a huge win, and we reached it in just over three years. However, this total includes money tied up in our house and pensions—funds that aren’t easily accessible. Here’s a breakdown of our current assets:
As you can see, over half of our assets are in real estate. We currently own a house that we live in and our old apartment that we are renting out. While this is a great foundation, it doesn’t help generate the passive income we need for financial independence. To address this, our new goal is twofold:
- Shift our asset balance: Over time, we aim to reduce the percentage tied up in real estate by selling the apartment and our house and moving to a less expensive area when we retire.
- Double our investments in three years: Specifically, we’re targeting 1.5 million kroner in our stock trading accounts by 2028.
We’re also keeping our long-term goal in mind: 10 million kroner in total assets. While this goal is still far away, reaching 5 million kroner marks a significant milestone, even if it’s not exactly the way we imagined. So we’ve set our sights on a new shorter-term target: 1.5 million kroner in investments within three years. This intermediate goal will help us maintain momentum and bring us closer to financial independence.
Budget: What Changed?
In 2024, we spent time reviewing our finances. Unsurprisingly, having kids, buying a house, and managing two jobs significantly changed our spending patterns. While our income has increased (yay!), our expenses have grown too.
Here’s a snapshot of our 2024 spending:
A few key observations:
- Childcare: A completely new (and significant) expense that will only grow as our youngest starts daycare this year.
- Food: Inflation and feeding four people added up. On average, we spent 2,000 kr monthly on takeaway and restaurants—a clear target for savings.
- Personal items: This category (furniture, electronics, clothes, streaming, etc.) ballooned as we settled into the house and replaced old appliances.
- Fun: Travel to Canada is expensive, but with two small kids, we plan to pause long-haul flights for a couple of years, reducing this expense.
The New Budget and “Købestop”
To regain control, we’ve implemented a “købestop” (buy stop) for 2025. Inspired by Jane Ibsen Piper’s work on minimalism and saving, this approach means no new purchases unless something essential breaks and can’t be fixed.
We’re asking ourselves three questions before buying anything:
- Is this essential?
- Can we borrow it or buy it second-hand?
- Can we postpone the purchase?
This mindset should reduce our spending on non-essentials, especially furniture and hobby-related items. While we’re hopeful that most of our big expenses are behind us, we acknowledge that surprises (like a broken appliance) could still arise.
With that said, here is the new budget reflecting these changes:
Our goal is to save 15,000 kr per month despite higher daycare costs and reduced income from parental leave. This would maintain a savings rate of around 18% (or 40% if you include mortgage principal payments).
Looking Ahead
While our savings rate isn’t what it used to be pre-kids, we’re optimistic about our long-term goals. By sticking to the købestop and adjusting our budget, we hope to reach 1.5 million kroner in investments within three years.
We’ll also be doing monthly financial check-ins to monitor progress and course-correct as needed. Life is unpredictable, but with the foundation we’ve built and the lessons we’ve learned, we’re confident we can stay on track.
Here’s to a new chapter of pursuing financial independence while enjoying the chaos of family life!