‘My goal is to be happy’: how thrifty Germans are leaving the rat race early

Former meteorologist Lars Hattwig has achieved the "frugalist" dream that is gaining ground in ageing Germany: retiring in his 40s and living on the proceeds of a working life lived sparingly.

'My goal is to be happy': how thrifty Germans are leaving the rat race early
Lars Hattwig. Photo: DPA

“It was four years ago that I realized I didn't need my salary anymore. I didn't have to work any more. So I quit my job,” the Berliner, now 47, tells AFP.

Hattwig put himself through a sometimes punishing savings regime for 10 years and carefully invested the proceeds, giving himself the resources to make the leap.

“For one or two years I was extremely tight-fisted” after the 2008 crisis, he admits, as his share holdings lost some of their value before later recovering.

“I avoided turning on the lights at home, I checked the meter regularly, I bought the cheapest food,” he recalled.

“But that phase is over now.”

A craze for frugal living is spreading on German-language blogs and internet forums, stoked by those already living the dream or people imagining what might be if they could only scrape the cash together.

For example, each step of 29-year-old Oliver Noelting's pilgrimage towards financial freedom is chronicled in detail online.

“I can totally imagine that when I'm 40, I'll say to myself: I've been doing this for 10 or 12 years. Now I want to do something else,” the Hanover-based computer programmer says, pooh-poohing the official retirement age of 67.

“My goal is just to be happy.”

Making do with less

Known as FIRE — “Financial Independence Retire Early” — in the United States, where it originated, the motives of adherents to the frugalist movement range from the ecological to the political or just personal inclination.

Enthusiasts are often middle class and lead simple lives with a focus on health — and nary a cigarette to be seen.

For many, it's about freedom from “existential fear linked to money”, like anxiety over losing a job or unhealthy levels of stress that can lead to burnout, says Gisela Enders, author of a book titled “Financial Freedom”.

Few adherents have any interest in cars, large flats or designer clothes.

“Do I really need all these things the consumer society wants to convince me at all costs I can't do without?” Enders asks.

Asking such questions is often a prelude to taking action.

“Frugalists live below their means for the long term, aiming to achieve financial independence and in the end realize a specific dream or wish,” Hattwig explains.

Resources to help seekers along the path are plentiful, meaning budding ascetics don't have to be financial wizards to reach their goals, says Hattwig.

It's a German thing: we don't talk about money.” Photo: DPA

A top blogger in the US scene is known as “Mister Money Mustache” for his keen sense for a good investment.

Hattwig too offers coaching on how to invest in financial products and real estate — whenever he feels like it, and only for those who can pay for the privilege although he calls it a hobby.

Others gather at “Financial Independence Weeks” (FIWE), regular community meetings organized by a couple who used to live in Germany and moved with their two children to Romania. Their gatherings draw up to 25 adherents, according to Noelting.

Outside the system

No-one has compiled figures for the number of frugalists living in Germany.

“It's a German thing: we don't talk about money,” author Enders explains.

At a time when Europe's top economy is desperately looking for solutions on how to pay for pensions after 2025 when the post-war baby boom generation heads into retirement, raising the possibility of upping the retirement age, the frugalists seem to have hit upon one solution to the demographic headache.

But it's a choice that provokes criticism over how a society with a communal responsibility can continue to function if increasing numbers, who have benefited from it by receiving an education for example, pay less, or nothing at all, into the public social security, pensions and health insurance pots.

Hattwig regularly receives messages from members of the public on his blog complaining he is being selfish but dismisses them as an expression of “jealousy”.

“Sure, I may have paid less into the pension system, but I don't want a state pension,” programmer Noelting says.

After escaping traditional working life, most frugalists look for new goals, and often find themselves most motivated by voluntary work, says Enders.

Rather than complain, “when 25-year-olds are saying to themselves 'I want to stop working at 40', we ought to be thinking about the quality of working life that our society offers,” she suggests.

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Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.

With reporting by DPA