Student getting started with life: Seeking Finance Optimization Tips

[anything1234]

I'm (24m, swiss) currently studying Systems Engineering at ZHAW while working part-time (50%) as a software developer. I'll be graduating and transitioning to full-time work next year and am looking forward to start with my finances. I'm also currently looking for an apartment.

I've been actively following resources like The Poor Swiss and Mustachian Post. Based on my research, here's what I've set up so far:

• Pillar 3a: I opened a Finpension 3a account with the highest risk profile.
• Neon Account: For everyday banking.
• Interactive Brokers: Ready to start investing in global index funds like VT and S&P 500.

Do you have any specific recommendations for someone just starting with life and trying to figure out what to do with his finances? Are there things I should avoid doing?

I appreciate any questions and tips!

 

[garydavid]

@anything1234 Your strategy is perfect. You made good research.

 

[anything1234]

@garydavid Thank you !

 

[onewayjesus]

@anything1234 Credit card: miles n more is a scam, take the certo if you shop often at coop and you can pick two other stores - you get 1% cashback.

Order the swisscard amex as well, 1% cashback for everything - if you purchase something bigger or stuff from Galaxus etc.
It piles up!

Both cards are free - no yearly fee!

Dont go into dept by buying a car or some BS, invest as much as possible - your time horizon is 30+ years….you have all the time in the world.

Dont listen to the VT guys, speak to people around you who are successful (investors) and make up your own mind. Especially you, who is in tech should know that the US should perform much better the next years then the rest….so while a VT mitigates your risk, you could lose out on 20% gains yearly….

Setup a „Dauerauftrag“ for your 3a and investment with IBKR. Let the money go directly every same day to those and learn to „live“ with the rest.
This will ease up your life a lot

Use referral codes from people to get advantages at IBKR etc.

Check preispirat from time to time, they have great offers for mobile (wingo etc.) and home internet!

You can save on so many way to have more for you!

Most important: check your health insurance!!
Most people your age dont do that! Statistically you dont need anything in those years, so you can switch to the lowest option and pay like 200 CHF per month!
Of course it depends on your personal situation, I dont know how „healthy“ you are, but you get my point.

Open up several bank accounts (free ones).
Put in 1: savings for taxes/vacation/insurance (if you have a car or Abgaben) etc.

Leave in 1: your daily expenses like healthcare, mobile, investments etc.

Leave in 1: money for fun

Edit: if you want pay into paraplegiker yearly.
If something happens you are safe and its a good thing! Its like 50 or so a year. Rega is like 40 too.

 

[tef85]

@onewayjesus What's a VT guy?
(I'm new to reddit)

Addition to your point with several bank accounts:
OPs Neon and Cler Zak offer virtual sub accounts for that purpose. I'm using those and love them. They make me feel a lot poorer than I am, which is a great feeling

 

[onewayjesus]

@tef85 The VT worshippers….they think it is the holy grail of investing….

 

[tef85]

@onewayjesus Sorry let me rephrase the question. What's VT?

 

[onewayjesus]

@tef85 Go into IBKR and search for VT - its an ETF

 

[anything1234]

@onewayjesus Thank you very much I will add those to my checklist

 

[adddddddd]

@anything1234 Man I wish I had the same thoughts like you when I was at your age. 32 year old here

 

[anything1234]

@adddddddd You are still young my friend It's never too late

 

[adddddddd]

@anything1234 I know my friend, but its a pity to learn about what an investment is at 28 and start slowly at 30. But it is what it is

 

[stsdm]

@anything1234 Only thing I would add is an emergency fund worth at least 6 months of your true expenses. Other than that you are good to go!

 

[tef85]

@stsdm 6 months seem like a hefty amount, given that we have the RAV in Switzerland. The typical recommendation I've read is 3 months.

Any specific reason why you recommend 6 months instead?

 

[nnhust]

@tef85 Not who you asked, I can offer my reasoning:

If you quit your job, let's say by end of January. Your first potential payout from RAV will come, if I'm not mistaken, end May or June (people say 3 months penalty but I forgot if that's with regular month of penalty for all included or not). But also, money isn't guaranteed - if your rav agent thinks you're not doing good job in searching, they can give you penalty days, so more without pay.

When the amount comes, it's only 70% of insured salary. So, if your insured salary is lower than your real one, that's additional loss.

If you're fired, than you'd get money end March in same example. With the rest same as above.

So having somewhere around 6 months of latest realistic and true expenses is good (not amount you think you can survive on, but real expenses). You can have them in a place where it takes a month to get it out, and then have just a month readily available.

If you lose job, you should immediately reduce all expenses you can, so then those 6 current realistic ones will give you even more slack space.

But. That's like 'ideal sum to have available in relatively short access time that should cover for a while even very paranoid among us'. If you're more relaxed, you might need less coverage.

There’s always nothilfe by sozialamt if shit really hits the fan. Or just knowing it exists can make you calmer until you build up your ideal 'have your back' amount.

 

[stsdm]

@tef85 I mean, I'm not sure what your monthly expenses are but I sure as hell prefer to have a bit more instead of just barely 3 months worth.

You just never what sudden costs might come your way, combining that with maybe losing/switching your job at the same time, for me 6 month is just a safer bet. Also, the missed financial gains when having 10k or 20k in my emergency fund does not hurt me too much, so I'd much rather be on the safe side.

Edit: then again, it absolutely depends on where you are in life and how "secure" your current main source of income is. Just run the numbers yourself, choose a factor between 3-6x your true monthly expenses and you should be just fine

 

[anything1234]

@stsdm Very good point thanks.

 

[allison]

@anything1234 You have a great a start!

I'm a software engineer as well, and I'm reading a book that I wish I would have read when I was at your age. It would have greatly increased my investment returns and would be in a better financial situation (still can't complain tho).

The book is called Lifecycle investing, and you can check out it's website here: https://www.lifecycleinvesting.net

 

[anything1234]

@allison Will surely look into it thank you

 

[nnhust]

@anything1234 In case your parents didn't teach you, I'll try to cover few nuggets of wisdom gained through my own mistakes / bad moves.

It's NORMAL and ok that you start from zero, and slowly build comfort to get to the level you had in family home. It took them decade or two as well. If you feel you need comfort, going to therapy is better than buying furnishings ASAP by using loans. And good fluffy blanket and ikea couch will work fine for a while.

You can't escape poverty of parents / become middle class with loans, you'll just mess up your financial security and banks will love you.

Especially when you increase income, they'll love you more and offer more loans. Avoid temptation.

The sooner you start investing, even small amounts, the better (that one you know).

Avoid buying peace (including with vacations to get rest of toxic environment, work or biological family), go to therapy, do self work and remove yourself from toxic people, even if they're biological family.

Money for self care is well spent, it's just that it's more efficient to remove toxicity first and use money to thrive and have fun, than keep toxicity close and be in constant survival mode despite throwing money at it.

Sounds harsh. Could save 20 years of my struggles if someone told me those back then, so.... You take what is useful to you. If you have safe and loving family, you are richer than you think otherwise, build one. Pets count

Oh, declutter often and be merciless - every thing in your life has to bring value to be worth its upkeep. Don't save things for special occasions, don't store for eternity, you are worth of using your things now. Value can be - useful item (like hammer), brings joy/relaxation/fun/entertainment (like gaming computer), you love to see (decoration). Limit sentimental items that just sit stored in box and can't be displayed to one-two box.

And, regarding household chores, work with your brain (especially if you're neurodivergent), energy levels and available time. Almost everything can be done tomorrow, don't put guilt trip on yourself. Be kind. And half assed is better than no assed, finished is better than perfect.

If you'd like to learn more about any mentioned topic, I can provide list of useful books