Learn to Manage your Personal Finance in Germany

Are you an expat in Germany looking to navigate the world of business and personal finance? Look no further! In this blog post, we’ll break it down into three key sections: Plan, Prepare, and Execute. By following these steps, you’ll be on your way to financial success in Germany. Let’s dive in!


In the first section, lay a strong foundation for managing your finances in Germany. Set clear financial goals and gain an overview of the German financial landscape. Make informed decisions to pave your way to financial success.


Step into the second section as we delve deeper into essential preparations. Understand the significance of investing, explore various options, and learn to assess and manage risk. Prepare yourself with the necessary tools and knowledge for confident choices.


It’s time to put your plans into action! In the final section, we’ll guide you through executing your financial strategy. Discover the world portfolio, open a depot, find the right ETFs, and explore automated platforms. We’ll demystify German taxes and streamline your financial journey.

Plan: Lets Lay Down the Foundation

Before you can start running you need to learn how to crawl. The same way a strong foundation can keep a large building stable, the same principle applies when you want to start with your Personal Finance Journey!

1. Set Goals

When it comes to your finances as an expat in Germany, it’s important to set some goals. Think about what you want to achieve financially. Maybe you’re dreaming of buying a house, starting your own business, or securing a comfortable retirement. Whatever it may be, having clear objectives will help you make smart financial choices along the way.

Setting goals is like having a roadmap for your money. It gives you direction and purpose. So take a moment to think about what matters most to you and what you want to accomplish in the future. It could be something big or something small, as long as it’s meaningful to you.

Once you’ve defined your financial goals, you can start making plans to achieve them. Break them down into smaller, actionable steps. This way, you can track your progress and celebrate milestones along the way. It’s like turning your dreams into a game plan!

Let me share some goals examples that might help spark your creativity

TimeframeGoalObjectiveEstimated Amount
Short-termWithin 1 yearSave for a vacation€1,500
Mid-term2-3 yearsPay off student loans/ Save for a Car€12,000
Long-term10+ yearsBuild a retirement fund€500,000
Short-termWithin 1 yearCreate an emergency fund€1,000
Mid-term3-5 yearsSave for a down payment on a house€25,000
Long-term10+ yearsInvest in a child’s education fund€50,000

2. Get an overview

As an expat in Germany, it’s essential to get a good grasp of the local financial landscape. Don’t worry, it’s not as intimidating as it sounds! Taking the time to familiarize yourself with the banking system, financial products, and tax regulations will give you a solid foundation to make informed choices about your money.

Start by exploring the banking system in Germany. Get to know the different banks and understand their services, fees, and customer support. Look into the types of accounts available, such as current accounts or savings accounts, and compare their features to find the one that suits your needs.

Next, dive into the world of financial products. Learn about credit cards, loans, mortgages, and investment options. Find out how they work, their pros and cons, and what you need to consider before making any decisions. This knowledge will help you navigate the options available and choose the ones that align with your goals and preferences.

Don’t forget about taxes! Familiarize yourself with the tax regulations in Germany. Understand how the tax system works, what deductions and credits you may be eligible for, and any obligations you have as an expat. This knowledge will ensure that you stay compliant with the tax laws and maximize any potential benefits.

By getting an overview of the German financial landscape, you’re empowering yourself to make informed choices. You’ll have the confidence to select the right bank, choose the appropriate financial products, and stay on top of your tax responsibilities. So take the time to explore, ask questions, and seek out resources that can help you navigate this exciting financial journey in Germany. You’ve got this!

3. Account Models

When it comes to managing your money in Germany, there are various account models to consider. It’s important to explore the options and find the one that suits your unique needs. So let’s break it down!

Current Account

First up, we have basic current accounts. These are like your financial headquarters, where you can deposit your income, pay bills, and make day-to-day transactions. They usually come with a debit card for easy access to your funds. Look for an account that offers low fees, convenient online banking features, and good customer support.

Savings Account

If you’re looking to save up for future goals or emergencies, consider opening a savings account. These accounts allow you to set money aside and earn some interest on your savings. Look for competitive interest rates, flexibility in depositing and withdrawing funds, and any bonus features that align with your savings objectives.

Broker Account

Now, if you’re ready to take your financial game to the next level, you might consider exploring investment accounts. These accounts give you the opportunity to grow your wealth by investing in stocks, bonds, or other financial instruments. However, keep in mind that investments come with risks, so it’s important to do your research and seek professional advice if needed.

When choosing an account model, think about your personal and business requirements. Consider factors such as fees, accessibility, interest rates, and any additional benefits offered by the bank. You can check out the banking section of this website to Find the best Free Bank Accounts in Germany or the Invest Section for the Best Free Brokers in Germany. It’s all about finding the right fit for you!

4. Savings as an Expat in Germany

Saving properly is all about developing a smart savings strategy that aligns with your goals and helps you make the most of your hard-earned money. So, let’s dive in!

📝 Set clear goals

Set clear goals: Define what you’re saving for. It could be a dream vacation ✈️, a new car 🚗, or building an emergency fund 💼. Having specific goals will keep you motivated.

💰 Set a budget

Take a look at your income and expenses. Figure out how much you can comfortably save each month. Remember, even small amounts add up over time!

🔄 Automate your savings

Make it easy on yourself by setting up automatic transfers. Have a portion of your paycheck go directly into your savings account. It’s like a savings superhero 🦸‍♂️ working behind the scenes!

🏦 Explore different options

Consider fixed-term deposits, where you lock away your savings for a specific period with a higher interest rate 📈. Savings plans are another great option, allowing you to contribute regularly and earn interest on your savings

📈 Diversify your savings

Don’t put all your eggs in one basket 🥚. Consider spreading your savings across different accounts or investments to manage risk and potentially earn more.

📉 Cut unnecessary expenses

Identify areas where you can trim your spending. Do you really need that daily coffee ☕ from the fancy café? Small changes can free up more money for savings.

🙌 Track your progress

Keep an eye on your savings growth. Celebrate milestones along the way, like reaching a certain savings target 🏆. It’ll keep you motivated for the long run!

Prepare: Why you need to invest

Understand the importance of investing to grow your wealth over time. Learn about the benefits of compounding and how it can significantly impact your financial future.

1. What to invest in?

Let’s dive in and discover what you can invest in here in Germany. Remember, it’s all about finding the right fit for your goals and risk tolerance. Here are some investment options to consider:

📈 Stocks

Investing in stocks means owning a piece of a company. You can buy shares and potentially benefit from their growth and dividends. Research different companies and industries to find the ones you believe in. Just keep in mind that stocks can be volatile, so it’s important to do your homework and be prepared for fluctuations.

💼 ETFs

Exchange-traded funds (ETFs) are similar to mutual funds but trade on the stock exchange. They offer diversification and can track specific indices or sectors. ETFs are a popular choice for investors looking for simplicity and flexibility.

📜 Bonds

Bonds are like loans to governments or corporations. When you invest in bonds, you’re essentially lending money and earning interest in return. They are generally considered less risky than stocks and can provide a steady income stream. Look into government bonds or corporate bonds to diversify your investment portfolio.

🏢 Real Estate

Investing in real estate can be a long-term strategy. You can buy properties for rental income or invest in real estate investment trusts (REITs) for a more diversified approach. Real estate can provide both income and potential appreciation, but it requires careful research and consideration of property market trends.

🤝 Mutual Funds

Mutual funds pool money from multiple investors to invest in a variety of assets, such as stocks, bonds, or real estate. They offer diversification and are managed by professionals. Look for mutual funds that align with your investment goals and consider their fees and performance track record.

2. What about Risk?

When it comes to investing, it’s important to consider risk and find a balance that suits you. Let’s break it down

🤔 Assess your risk tolerance

Take a moment to understand how comfortable you are with taking risks. Some people are more adventurous, while others prefer a cautious approach. Knowing your risk tolerance will guide you in making investment decisions that align with your personality and financial goals.

🌱 Diversify your portfolio

Don’t put all your eggs in one basket! Diversification is key to managing risk. Spread your investments across different asset classes, such as stocks, bonds, and real estate. This way, if one investment performs poorly, others may offset the losses. Think of it as a financial safety net.

💼 Balance potential returns with risk

Higher potential returns often come with higher risks. It’s essential to strike a balance that suits your goals and risk tolerance. Conservative investments, such as bonds, generally offer more stability but lower returns. On the other hand, stocks can provide higher returns but come with more volatility. Consider what makes sense for you.

⚡️ Be prepared for short-term volatility

Investing involves ups and downs. Markets can fluctuate in the short term, but historically, they tend to grow over the long term. It’s important to have a long-term perspective and not be swayed by short-term market fluctuations. Stay focused on your goals and remember that investing is a marathon, not a sprint.

📚 Educate yourself

The more you know, the better equipped you’ll be to handle risk. Take the time to learn about different investment strategies, market trends, and risk management techniques. Stay informed and stay curious.

🔄 Periodically review and adjust

Keep an eye on your investments and periodically review your portfolio’s performance. If needed, make adjustments to maintain the desired balance and align with any changes in your risk tolerance or financial goals.

3. Open a Investment Account

Before you start investing, let’s talk about depot or a Securites Account! Think of the depot as your account for securities like stocks or ETFs. However, the right securities matter more than the perfect portfolio.

Here are two important criteria for selecting a investment account:

  1. 💰 Costs: Most investment broker accounts don’t charge a management fee, so they’re free! But some providers might have costs for buying and selling securities. Keep an eye on these fees and choose a provider that offers cost-effective options.
  2. 📈 Selection of securities: Make sure the securities you want to invest in are available through your chosen depot provider. It’s essential to check this before opening a portfolio. You want access to the investments that align with your goals.

To find the right depot, you can check out our recommendations or do some research on your own. It’s like finding the perfect fit for your investing needs.

Opening a depot is a breeze! Here’s how:

  1. 📝 Register on the website: Start by signing up on the depot provider’s website. They’ll ask for some basic information.
  2. 📎 Provide data: Provide the necessary data, such as your personal information and any required documents. They want to make sure everything is in order.
  3. 📸 Confirm your identity via Videoident: Some providers use Videoident to verify your identity. It’s a simple process where you show your ID through a video call. It’s like proving that you’re you!
  4. ✅ Done: Once you’ve completed the registration and identity verification, your depot is good to go! You’re all set to trade securities on the stock exchange or set up savings plans with ease.

Having a portfolio gives you the power to trade securities and create savings plans effortlessly. It’s like having your own financial playground!

Execute: Build a Diversified Portfolio

Consider building a globally diversified investment portfolio. By investing in different regions and asset classes, you can mitigate risks and take advantage of global opportunities.

1. Find the Right ETF

Ready to discover the world of Exchange-Traded Funds (ETFs) as an expat investor? 🌍📈 Let’s dive in and find the perfect ETFs for you in a friendly and casual way! Here’s what you need to know:

  1. 🕵️‍♂️ Do your research: Start by exploring different ETFs available in the market. Look for ones that align with your investment goals and preferences. Consider factors such as the ETF’s investment strategy, underlying assets, and track record. It’s like finding the right travel destination that suits your interests.
  2. 🎯 Investment goals: Determine your investment goals, whether it’s long-term growth, income generation, or diversification. This will help you narrow down the ETFs that fit your objectives. For example, if you’re looking for broad market exposure, consider ETFs that track major indices like the S&P 500 or global indexes.
  3. 🌐 Broad market exposure: ETFs are known for their ability to provide diversified exposure to various asset classes or sectors. Look for ETFs that offer broad market coverage, allowing you to invest in a range of companies or industries. This diversification can help reduce risk and capture overall market trends.
  4. 💸 Low expense ratios: Keep an eye on the expense ratio, which represents the annual fees charged by the ETF provider. Look for ETFs with low expense ratios, as these costs can eat into your returns over time. Comparing expense ratios ensures you’re getting the most value for your investment.
  5. 📈 Examples: Some popular ETF categories include:
    • Broad market index ETFs: These track major indices like the S&P 500 or the MSCI World Index, providing exposure to a wide range of companies across different sectors and geographies.
    • Sector-specific ETFs: These focus on specific industries or sectors, such as technology, healthcare, or renewable energy. They allow you to invest in areas you believe in or see potential growth.
    • Bond ETFs: These invest in fixed-income securities like government or corporate bonds. They can provide income and diversification to your portfolio.

Remember, each expat investor is unique, so consider your own financial situation, risk tolerance, and investment goals when choosing the right ETFs. It’s like customizing your investment journey to fit your needs.

Take your time to research and select ETFs that align with your goals, provide broad market exposure, and offer low expense ratios.

2. Invest on Autopilot

Let’s talk about automated investment platforms and robo-advisory services in a friendly and casual way! Here’s what you need to know:

  1. 🌟 Automated investment platforms: These platforms bring the power of technology to your investment journey. They offer convenient and hassle-free ways to manage your investments. It’s like having a virtual assistant for your finances!
  2. 🤖 Robo-advisory services: Robo-advisors are the stars of these platforms. They use smart algorithms and data analysis to make investment decisions on your behalf. These algorithms consider factors like your risk profile, investment goals, and time horizon. It’s like having an investment expert in your pocket!
  3. 🎯 Personalized approach: The algorithms analyze your financial information and preferences to create a personalized investment plan. They take into account your risk tolerance, desired returns, and investment time frame. It’s like having a tailor-made suit for your financial goals!
  4. ⚖️ Risk management: Robo-advisors aim to strike a balance between potential returns and risk. They automatically adjust your investment portfolio based on market conditions and your risk profile. This helps manage risk and keep your investments aligned with your goals. It’s like having a smart navigator to steer you through market ups and downs!
  5. 📈 Examples of automated investment platforms include:
    • Betterment: They offer a user-friendly platform with a range of investment options and tax-efficient strategies.
    • Wealthfront: Known for their automated tax-loss harvesting and diversified portfolio construction.
    • Acorns: Perfect for beginners, they round up your everyday purchases and invest the spare change automatically.
  6. 💼 Convenience and accessibility: Automated investment platforms make investing easy and accessible. You can monitor and manage your investments anytime, anywhere, using your computer or smartphone. It’s like having a financial advisor in your pocket!

3. Taxes are Easier than you think

Don’t let taxes stress you out! Let’s dive into the world of German tax laws and regulations on investments in a friendly and casual way. Here’s what you need to know:

  1. 📚 Understand the basics: Get familiar with the basic principles of German tax laws related to investments. Know how different types of investments, such as stocks, bonds, and real estate, are taxed. Understanding the fundamentals is like building a solid knowledge foundation.
  2. 🕵️‍♂️ Consult with a tax professional: When it comes to taxes and investments, it’s wise to seek guidance from a tax professional. They can help you navigate the intricacies, ensure compliance, and uncover potential tax benefits. Think of them as your tax superhero!
  3. 💼 Business and personal finances: Remember, investments can impact both your business and personal finances. Whether you’re investing as an individual or through your business, understanding the tax implications is essential. A tax professional can provide personalized advice based on your specific situation.
  4. 📞 Examples of tax professionals you can consult include:
    • Investment tax specialists: These professionals have expertise in the tax aspects of investments and can guide you through the complexities of German tax laws.
    • Financial advisors: They can provide insights on tax-efficient investment strategies and help you align your investments with your financial goals.
    • Tax attorneys: If you have complex investment structures or require legal advice, tax attorneys can assist with specialized expertise.

Consulting with a tax professional ensures you stay compliant with German tax laws and helps you uncover opportunities to optimize your investments from a tax perspective. It’s like having a trusted advisor to navigate the tax maze!

Remember, tax laws can be nuanced and subject to change. Regularly reviewing your investment portfolio with a tax professional can help you make informed decisions and adapt to any tax law updates. Stay proactive, stay informed, and maximize those tax benefits! 💼💰


Congratulations! By following the steps outlined in this blog post, you’re well on your way to mastering business and personal finance in Germany. Remember, careful planning, preparation, and execution are the keys to achieving your financial goals. Seek guidance from financial experts when needed and enjoy the journey towards financial freedom in Germany!

Disclaimer: This blog post provides general information and should not be considered as financial advice. Consult with a financial professional for personalized guidance based on your specific circumstances.