As an expat living in Germany, I often wondered how Germans save money. This lead me to ask my German friends and Colleagues about this exact question. Based on their advice and recommendation I want to share 15 Simple Tips to Save Money in German.
I think all of them are pretty simple to get started with and you don’t need to be an expert to get started with these tips and start saving.
Use a Haushaltsbuch or a Budget planner
Here you can use many digital apps but a majority of Germans prefer to go analog and have a physical book.
In this budget book you can start by writing about your income: you wages, child benefit, unemployment benefit etc. Any income that you get on a regular basis. Christmas bonus or any monetary gifts should not be included.
Then write down all the regular expenses like your rent, energy costs, and all other fixed bills. Subtract your regular expenses from your income and the remaining amount is where you can optimize your spending and save more money using the next tips.
Use Cash for payments instead of a Card
More than 60% of all transactions in Germany are still done using Cash. And a Large majority never use a card as payment. As an expat I never understood why Germans prefer cash over card. But there is some science behind it: According to studies using cash for payments enhances the negative effects of parting with money. And that cash payment could represent a stronger self regulating tool for those having issues with compulsive shopping or digital gambling.
So if you find yourself just using your debit or credit cards, try switching to cash and see yourself save money in Germany!
Avoid going shopping as a hobby
In Germany people have a habit of for shopping specifically on Saturdays. For many this becomes a ritual and often they often buy unnecessary things as this becomes a habit for them. Additionally think about the things that you want to buy before hand and make a list. Stick to the list if you are going out. If possible try not allot a specific day for your shopping.
Avoid Impulse Buying
Most of us have a habit of impulse buying, mostly when we are bored. This thing happens specially to people who follow deals websites. I remember I used to spend at least 5 minutes in the morning looking for deals on an App called Mydealz, then I regularly visited the deals section on amazon and eBay to get special discounts.
Because of that habit I have bought many things at a discount but at the end of the day If I buy something for 200euros at a 50% discount but I never use that thing, have I actually saved 200euros on the discount or just wasted this amount buying something totally useless? As a result I have uninstalled all the discount apps.
Research shows that the brain releases dopamine in anticipation of a reward. Dopamine is a type of neurotransmitter that plays a role in how we feel pleasure and online shopping creates the anticipation releasing more dopamine because the buyer has to wait for the purchase. But as time goes on the amount of dopamine release decreases and when anticipation is done, on in the case of buying something the product is in hand.
The amount of dopamine release becomes negligible after getting what you ordered. So the anticipation phase is where you get the most satisfaction so in order to save money in Germany I have set a waiting limit of at least 2 weeks to buy something that is not absolutely essential.
Save money on Food in Germany
Many of us prefer eating out and its all good until at the end of the month we see our bank statement. Cooking for yourself is healthier and saves money too. If you don’t have time to prepare meals every day, you can look into Meal prep where you either make meals for the rest of the week or prepare half cook meals that you can easily make within a couple of minutes.
The bottom line with meal prepping is that you can save major time, stress, calories and most importantly in many cases save money in Germany as well. And if you want to eat out, you can set a monthly budget for yourself. Only spend your budget amount eating out and if the budget is finished that’s it for the month.
Stay away from 0% Financing
If you cannot afford something, I would say to stay away from it. We often see things that are way out of our budget. But as soon as we find out that there is 0% financing on it, we try to justify that purchase with the fact that dividing the payment and getting a better product even if it is out of our budget is worth it.
However in many cases its not worth it. For example if you have a budget of 1000€ for a laptop and you buy a 2000€ one just because it had 0% financing on it. I assure you, in 90% of the cases the extra bells and whistles you got for the additional 1000€ will not be useful for you at all.
File your tax return
You can get back an average of 1000€ from the government if you file a tax return in Germany. And if you have more expenses you can get even more. For example you can get back the travel costs to work, any expenses you hard that were related to your work and much more if you just submit your taxes. I have a step by step guide here which you can follow and submit a tax return with ease.
Save money on Subscriptions and Memberships
Most Germans do not have subscription for streaming platforms. Many only have either Amazon Prime or Netflix. That said a Majority still prefer to buy DVDs and box set for series as many of us usually end up re-watching the same series over and over again. Honestly speaking YouTube has such a wide variety of free content that it might be enough for many.
You could also save up on your gym membership. I know so many people who have a gym membership and they only go maybe once or twice a month. If you are one of those you can just get a pair of dumbbells, learn to get a full body workout at home and save up on that membership fee.
If you are like me and like to automate things, then you can use one of these Free Online Bank Accounts in Germany to unsubscribe from unwanted subscriptions automatically.
Use a Bike instead of a Car
If you live in a big city chances are you spend a lot of time in traffic and searching for a place to park your car. With having a car you pay so much in fuel costs these days as fuel is getting more expensive each day. On top of that you have to pay car insurance, repair cost and much more. So using a bike instead of a car can not only help you save money but is a great way to burn calories and remain healthy.
If you cant travel using a bike Larger cities generally have really good connections to public transport which are still cheaper than using a car. And if you really need a car you can use Car sharing or rent a car if you want to carry heavy stuff. Per kilometer the cost would definitely be higher but looking at the overall costs on how many time you use those services you can still save money in Germany.
Compare Contracts and Save money in Germany
Even if you try to stay away from contracts, chances are that you may need to sign up for a couple of none the less. For example with you electricity provider, internet and mobile phone contracts. But if you compare your contract with other providers chances are that you can get a better deal.
In many cases if you find a better deal you can even get a good deal from your current provider. For example my internet contract was about to end and I reached out to my provider and renegotiated a contract that is 10% less than my current one.
Have regional Holidays
Instead of planning for your next trip to Paris, you can plan a regional holiday trip and save the difference. Many people don’t even know about the interesting things about the cities they live in. For example One of the most visited sights in Germany is the Cologne Cathedral (der Kölner Dom) But what a lot of visitors to Cologne don’t realize is that right underneath are ancient Roman ruins from the end of the first century AD. So try to find hidden gems in your own city or places nearby instead of visiting places which are usually crowded with tourists.
Rent instead of Buying
Often we need things for a very limited time but we end up buying them. And after using that thing once we just forget that we had it. For example if you are going on a trip and want to take pictures on your DSLR camera but instead of the KIT lens you want to have a telephone lens.
Instead of buying it, why not try renting it and if you really like the result and you want to continue taking such photos then you can always but it later on. But trust me most of us just want to get the dopamine hit because of the anticipation like I mentioned in tip number 4.
Sell your extra stuff
As I said People usually buy stuff that usually ends up in a storage closet somewhere in there house. So instead of it utilizing space in your home, try to sell it and get some extra cash. To evaluate what you can sell I recommend that you spend some time thinking that you are shifting houses.
Generally when we are moving we take things that are useful to us and either donate, sell or throw away the thing we cannot carry to our new place with us. So having a mindset like that could help you find many things that are just wasting space and gathering dust in your home. Trust me you will find stuff that you can sell on eBay or facebook marketplace.
Fix before buying
If something stops working, instead of ordering a new one. Try to get it repaired. I am sure you know how to fix things or at the least have friends that know how to fix many things. So if you cant fix something invite a friend who can fix it to dinner.
You can get something fixed and have a nice time with them too. If its not fixable then you can always it replace but at least now you have tried and done your part.
Fix your bad money habits
Most of us have bad money habits that keep us from poor, for example having people in your life that influence you to take bad financial decisions can cause you to remain poor for the rest of your life.