The Times They Are a Changin'

Posted on 14 January 2013 under personal.

The New Year is upon us and it’ll certainly go down in history as a year of hardship and sacrifice in Portugal. And here’s why.

Taxes

Due to the ridiculous austerity measures that will come into effect right from the get go, the vast majority of the Portuguese people will have to adjust to a harsher financial reality. The middle class (some would call it the heart and soul of the country) will be hit particularly hard by Venom-pumped taxes, pushing it towards what could turn out to be a Greek breaking point, if you know what I mean.

As a member of the dwindling middle class, my wife and I are making adjustments to our monthly budget. Speaking of my wife, she’s an interesting case that shows the chaos our society is in. For all intents and purposes, she works in the private sector. Therefore, she doesn’t have access to all the benefits bestowed upon the public sector workers. Makes sense so far. The catch is that she pays taxes as if she were a public sector worker. This means successive wage cuts that have hindered some of our plans for the future.

What to do?

Back to the budget… I’ve decided to go ahead with some action points that will have an immediate impact on our monthly expenses: * Stop using the subway in Lisbon. Having to juggle between train, subway and bus (one every 40 minutes) during my daily commute, the amount of delays caused by malfunctions and the wait period between trains is a disaster waiting to happen every day. Besides saving a pretty penny, I’ll add a 4.8 Km round trip walk to my daily routine, upping the tally to 8.8 Km (getting Batman-like fit is one of my main goals for 2013).

  • Cancel my 3G network subscription. The next couple of months will be payed with credit points from my mobile provider account. I’ll just have to get used to not having Internet access outside of Wi-Fi covered areas.

  • Change my prepaid mobile plan from a mandatory €25 per three months to a free payment regime. I don’t talk on the phone that much and a pay as you go plan ends up being cheaper and much better suited to my needs.

  • Renegotiate my cable subscription. In exchange for a new 12-month contract, I keep my monthly rate and get an additional batch of generalist and video on demand channels. Although no savings are achieved, the bang for the buck factor is improved and downgrading to a cheaper subscription is always a viable option in the future.

  • No more books! After carefully looking at my current book collection, I have enough reading material for the next three years (at the rate I’ve been reading lately). My credit card will miss Amazon and my local comic book store.

  • As for gaming, I took advantage of the last two Steam sales and stocked up on games that will last me three or four years. I only bought games that I really want to play and paid an average of €2,30 per game, which was a pretty sweet deal.

  • LEGO… ah, LEGO. No sets for the household this year. It’s totally off limits.

Other options

Another possible move could be downsizing from two cars to one. My wife needs her car to drive to work, but I rarely take mine out. The savings on the insurance alone will be significant. The problem is that her car is not getting any younger and we might be forced to replace our two cars with a new (used) one. That could be a troublesome hit on our budget.

I’m also planning to get rid of all the old computer parts stacked in my home office. The financial return will surely be quite small, but hopefully they’ll find new owners who’ll put them to good use. Even my iMac isn’t safe. It might just have to go.

Unfortunately, my health insurance premium will skyrocket this year. My wife and I have decided to include the baby in our health plan and spoke with our insurance broker. It seems that our four-year-old insurance policy is too old (don’t get me started on insurance companies). The insurance packages have been restructured and, in order to keep the coverage we currently have, we’ll have to migrate to a new one which includes benefits that we don’t need at the cost of doubling the insurance premium. As always, very convenient.

Things are about to get tough. Really tough.