How To Save Money In Spain
Are you thinking about relocating to Spain? Then there are a couple of things you should keep in mind if you want to save money. Because this is a different country with different rules, learning the useful tips and strategies that have helped thousands of expats worldwide is necessary. That is what you are going to do now. This article will teach you how to save money when relocating to Spain.
So let’s get this party started!
Home-Country Bank Account And How To Withdraw Money
Let’s start with one of the issues that will undoubtedly affect you the most as a foreigner in Spanish territory: banking.
The first question we have to address is whether you should close your current bank account in your country of origin.
The answer is an unequivocal no. Maintain the bank account you already have. Why? First and foremost, because you never know when you will return. You may visit family and friends several times throughout the year, and using your local account freely will be extremely beneficial.
On the other hand, especially if you are from the UK, living in Spain for an extended period may make it easier to re-open an account if you decide to return.
What is our recommendation? Maintain your original bank account and consider opening an international one. You will need to withdraw money regularly while in Spain, so you cannot be charged each time you do so. It’sIt simply needs to be cheaper.
As a result, it’s a good idea to pair your international account with a service like N-26, a no-fee credit card that allows you to withdraw euros from any ATM (free of charge).
Refrain from using your home-country credit or debit card in this country. You will also be charged significant fees, and when these are imposed repeatedly over time, the total fee can be enormous.
Open A Spanish Bank Account
But what could be better? The process may be tedious and time-consuming (in some cases), but it is unquestionably the best option if you intend to stay in Spain for longer than a vacation.
Why?
First and foremost, because of financial constraints. You can withdraw money from any branches of your Spanish bank’s ATMs located throughout the country) without incurring any fees.
However, if you decide to stay in the country, you must pay some monthly fees.
Consider the following: water, gas, electricity, or your phone line.
And many of these businesses will only accept you if you have a Spanish bank account.
For the time being, keep in mind that the process differs depending on whether you are a resident (non-residents must open a non-resident bank account, which requires a “certificado de no residente” from the Police Office).
All options are viable, and it will be a matter of careful consideration. However, the major banks are:
Be Careful With The Exchange Rates
Exchange rates are one of those things that are a minor issue but significantly impact your finances.
Because yes, you can save a lot of money using the right exchange option. And, given that you will exchange regardless, selecting the best method is a must.
We recommend using one of the popular apps or services, such as Transferwise or Revolut.
Their primary advantage is that they are simple, and everything is done online.
Because of their extremely low fees, you will save money every time you exchange. Revolut will even provide you with a credit card!
Wisely Decide Your Housing Options
Undoubtedly, your housing decisions will result in one of the largest expenditure streams.
In that regard, you have two choices: buy or rent.
Let’s look at the most important factors to consider if you want to save money.
First and foremost, if you intend to rent a flat, conduct preliminary research. You may be tempted to believe that rental prices in Spain are extremely low, especially compared to your home country, but there are significant differences.
The highest rental prices are found in Madrid and Barcelona. However, it is still possible if you have already decided to live in one of them. You’ll need to be patient, take your time until the right option appears, and explore the city’s various neighborhoods. You’ll find some really good options!
However, if you intend to purchase, the situation is somewhat different. Prices in major cities are much higher, so the best option is to 1. look for areas surrounding major cities or 2. concentrate on less common regions.
Valencia, which has a vibe and climate similar to Barcelona or the south of Spain (Andalucia), can be the ideal option for expats looking to save money when purchasing a home.
Here you can see the evolution of the price per square meter and compare it to other Spanish regions.
Finally, keep in mind the actual costs of purchasing a home. We often focus solely on the price, but there is much more to consider. There are several taxes and costs to consider, which causes the price to vary significantly (up to 15%).
A list of all the additional taxes and costs can be found here.
Tax Planning
What works in your home country may not work in Spain. Taxes, particularly those levied on expats, operate entirely differently in Spain.
And you should be aware of these distinctions to plan accordingly.
First, you should look out for income tax, also known as IRPF. If you receive income from outside the country, you can avoid paying income tax twice by utilizing the existing double treatment conventions between Spain and your country.
In addition, if you come to the country to work, you can apply for the Beckham law and benefit from significant tax breaks.
But wait, there’s more. If you own multiple assets, you should be aware of the proper investment structure; similarly, your company structure may require careful consideration.
The bottom line is that taxes are a huge expense in any country. And, because the rules in Spain differ, if you want to save money here, you should look into it thoroughly.
Because, yes, doing things correctly can save you a lot of money.
You need to contact an expert tax lawyer familiar with foreign taxes and go over your situation with them to determine the best options based on your needs.
Compute Your Transportation Costs
Spain’s public transportation system is quite efficient. You would want to avoid taking your car, especially if you are visiting Madrid or Barcelona: too many traffic jams and too much stress on the road.
The metro transports you everywhere, and it does so quickly. When the metro is not an option, the bus will suffice.
However, depending on where you live (perhaps on the outskirts of a small city where the metro does not stop) and your daily commute route, you may find the driving or riding a motorcycle more convenient.
So, if you wish to save money, you must plan.
You’ll need to compare the cost of various public transportation tickets (there are significant savings when purchasing a monthly ticket vs. a single trip) to the cost of owning a car (fuel + parking space).
Here are the fares and ticket prices in major cities to give you a general idea:
Need Anything? Go To A “Chino”
If you are from the United Kingdom or have visited the country a few times, you are probably familiar with stores such as Poundland or Poundworld.
You can get a wide variety of items for a very low price.
Well, in Spain, the equivalent to that is called “chino”. We’re talking about neighborhood stores typically owned by Chinese people (hence the name) and where you can find almost anything you need.
Do you require scissors? You travel there. Do you require a box? You travel there. Is your phone charger broken, and do you need a replacement? You go there as well.
There’s always one around the corner, and the prices aren’t any lower than in a “chino” store.
Have Lunch Out, But Like This
You can save money by eating lunch at a restaurant rather than bringing your food.
How Is This Even Possible?
Because lunch menus in Spain are extremely inexpensive, for only 10€, you can get a delicious and complete menu (starter, main dish, drink, bread, and coffee) (even though you can find cheaper ones).
This is known as “men del da,” and they are always delicious and nutritious. That is the Mediterranean diet’s power!
What you need to do is avoid the most touristy areas and seek out a local restaurant.
You will eat better than at home without spending a fortune!
How To Save Money On Groceries And Bills In Spain
In Spain, as in many other parts of Europe, the cost of utilities and everyday items has risen this year.
Many things in Spain are still slightly cheaper than in the UK, but the cost of living is no longer as low as it once was. This, combined with the ever-changing exchange rate, means that money for many British expats isn’t going further than it used to.
We decided to compile a list of things you can try to save money on groceries and utilities in Spain.
Let’s begin with saving money on groceries.
Shop At The Local Market
Our top recommendation is to buy fruits and vegetables at the market. We used to do this when we first moved here, but to save time, we started doing everything at the supermarket.
We’ve been buying all fresh fruits and vegetables at a local market for the last few weeks and estimate we’re saving €10-15 per week. Not to mention how much fresher it is.
Herbs (both fresh and dried) and spices are also less expensive than at the supermarket.
Buy Seasonal
If you’re going to the market, you’ll have to do this anyway, but buying seasonal fruits and vegetables will save you money.
Strawberries, watermelon, and cherries are inexpensive in the summer but much more expensive the rest of the year.
Pumpkin, squash, broccoli, and cauliflower are some of the less expensive options in the autumn and winter.
Shop Spanish
Spanish supermarkets are significantly less expensive than Carrefour and other British/International supermarkets. Most of what you need can be found in a Spanish supermarket; you may have to choose a different brand than you’re used to.
The supermarkets’ brands are of high quality for both food and toiletries.
The following are the cheapest supermarkets in Spain:
- Alcampo
- Consum
- Mercadona
- Lidl
- Aldi
Take Bags With You
This applies to most countries, but remember to bring carrier bags because all Spanish supermarkets now charge for bags.
Sign Up For Loyalty Cards
Regarding vouchers and discounts, the supermarket loyalty cards we’ve found in Spain are far from as good as the Tesco Clubcard, but if you get a card from Mas y Mas or Consum, you’ll receive regular money off coupons and discounts.
Both have apps that are simple to download and use in the store.
Now for your household bills.
Check Your Energy Tariff
Prices for electricity in Spain can vary greatly depending on the tariff. When energy prices in Spain increased recently, we received an email from our energy supplier, Iberdrola, stating that our unit price would remain unchanged due to our tariff. As a result, our bills are the same as last year’s.
Examine your tariff and select the best option for you. For example, with Iberdrola, you can choose a tariff that provides cheaper energy in the evenings and on weekends, or if you work from home like us, you can choose one that provides cheaper energy during the day.
Use Appliances At Off-Peak Hours
If you don’t have a tariff, the cheapest times to use your household appliances are between 12 am and 8 am on weekdays and all day on weekends.
So, leaving your washing machine and dishwasher on overnight without disturbing anyone will save a lot of money.
Final Words
International tourists are now ready to travel after being trapped in their home countries for a long time due to the pandemic. However, because of the cost-of-living crisis, rising energy bills, and the threat of a European-wide recession, many tourists cannot travel. Spain is well known for being one of the more affordable places to visit in Western Europe, but prices to visit can still be high, especially during the summer.