So my situation is a bit different from many of you based in the US, as salaries, taxes, and the general setup are not quite the same here in Norway. Here’s my current situation:
Age: 26
Salary: Started working a year ago after finishing university, making about 75k before tax. After taxes, I’m taking home 4.2k monthly.
Debt: Mortgage on a centrally located apartment in a big city. Total monthly cost is 2.7k with a 30-year mortgage (29 years left) at 5.6% interest, variable rate, which is currently the lowest available. I also pay $300 a month toward a student loan (total $40k) on a 30-year term.
Monthly expenses: Monthly transit pass is $50, gym membership is $40, and the rest covers food, travel, clothing, social life, etc. My phone and insurance are covered by my employer.
Savings: I’m putting $200 a month into a global index fund and $200 into a rainy day fund, which currently has $3k.
Does this look sustainable and comfortable to live on long-term with my current setup?
It sounds a bit like being house poor, but that’s pretty common when you’re just starting out. I’d say you’re on the right track. Focus on advancing in your career and keeping lifestyle inflation in check.
@Dev
I definitely feel house poor, as my lifestyle hasn’t changed much since college. Long-term, I want to be financially stable. I’m okay with things being tight now, but eventually, I’d like to have more comfort, especially when I have a family.
@cynthiaspring
Totally understand. My 20s were tough financially, but it did get better. In the US, career growth often means switching jobs, which tends to offer the biggest pay bumps.
Dev said: @cynthiaspring
Totally understand. My 20s were tough financially, but it did get better. In the US, career growth often means switching jobs, which tends to offer the biggest pay bumps.
Thanks, it’s reassuring to hear that. Income caps in Norway are quite different, but I’m still early in my career, so I expect things to improve. Investing in housing has been a good way to build wealth here, with tax benefits and a stable market.
Tamsin said:
Since your mortgage rate isn’t fixed, what’s your plan if both food costs and your interest rate go up suddenly?
Good point. Rates are unusually high at the moment, though. Almost everyone here has variable rates, as fixed rates typically aren’t worth it long-term. Rates are expected to drop eventually, but yes, the currency is weak right now.
I’d consider skipping the index fund until your savings are higher. $1.5k isn’t enough for even a month of emergency expenses—you want 3-6 months or 1% of your home’s value for repairs, whichever is more.
If you lose your job, it could coincide with a market dip, affecting your investments too.
@Shan
That’s sensible advice, as buying the apartment depleted my savings. I’m putting my annual bonus (about $2.5k) toward savings to get closer to a minimum goal of $10k over the next year. The index fund is more for long-term growth (10-15 years down the line).