Thoughts on money

I just read – in the Icelandic media! – that Geneva has voted on a minimum wage a couple of days ago (roughly CHF 4’000.- or ISK 600’000 a month when working 40 hours a week). Reading this made me ponder about money for a couple of minutes. So, let’s talk a little bit about it, shall we?

As the Swiss that I am, I will not disclose my former salary. Let’s just say, that it allowed me to build up my savings. What I will tell you, though, is that I’m currently living off those savings with a monthly budget of around CHF 2’200 (ISK 330’000). CHF 800 (ISK 120’000) are spent on my health insurance and various other obligations in Switzerland. Another CHF 700 (ISK 105’000) are spent on the rent, and yet another CHF 700 for food and leisure time activities. I did not include any taxes here, because my tax bill would be around CHF 0.- if I had a monthly income of CHF 2’200.- for a whole year.

Let’s put that into perspective. Usually the minimum subsistence level in Switzerland for an unmarried young man in the suburbs is around CHF 2’000 (ISK 300’000). In Iceland it’s generally ISK 207’000, or CHF 1’350 (ISK lost quite a bit of value à just 2 years ago that would’ve been around CHF 1’800… lucky me!). Like Switzerland, Iceland doesn’t have a general minimum wage by law, but for most professions, unions negotiated one. It’s usually somewhere around ISK 300’000 to ISK 350’000 a month. Interesting about this is that the difference of the two countries’ price level seems to be insignificant (https://www.bfs.admin.ch/bfs/de/home/statistiken/preise/internationale-preisvergleiche/preisniveauindizes.html). To sum those figures up, I created a table:

Minimum wage GenevaCHF 4’000 / ISK 600’000
Minimum wage ISCHF 2’200 / ISK 330’000
Average nominal annual wage CH (OECD)$ 90’000
Average nominal annual wage IS (OECD)$ 70’000
Minimum Subsistence level CHCHF 2’000 / ISK 300’000
Minimum Subsistence level ISCHF 1’350 / ISK 207’000
My monthly budgetCHF 2’200 / ISK 330’000
Price level CH (EU avg. = 100)146
Price level IS (EU avg. = 100)154

What I found very interesting was that what’s considered the minimum subsistence level in Switzerland almost corresponds with the minimum wage in Iceland – even though the price level in Switzerland seems to be lower than in Iceland. But anyway, living with CHF 2’200 a month is a completely new and humbling experience. It required me to change many behavioral patterns:

  1. I don’t buy clothes that I don’t absolutely need. 5 different outfits are enough
  2. I generally don’t buy anything that I don’t feel like I absolutely need
  3. I got a haircut that doesn’t require me to go to the barber every month
  4. I get all my groceries at discounters
  5. I always cook all my meals at home and I never eat at restaurants
  6. A 20 square meters apartment seems to be enough for me, if I’m alone
  7. I re-assess all my reoccurring bills critically and regularly

But the most interesting point so far is, that cutting down my consumption to the bare minimum (by Swiss standards) was actually not hard for me and didn’t decrease my happiness. At least not until now. I therefore think it’s a great opportunity to try to change my consumer behavior constantly. And even if I am aiming for a well-paid job again once I get back to Switzerland, I will have to ask myself whether I really want to keep almost the whole salary for myself or if I want to go through life with more generosity.

What went through your head while reading this post? Please let me know.

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