Budget tips for residents in spain

Budget tips for residents in Spain

This ‘budget tips for residents in Spain‘ page is based on my personal experiences in my life in Spain since 2006. In addition, I regularly speak about this with clients at our law firm who buy a house in Spain.

The price spike in Spain has risen sharply in recent years, although it is still about 20% below that of Northern Europe. Of course, the inland and rural areas such as Andalusia are often cheap, but in the big cities and on the coast you can sometimes be shocked. The Spaniards are having a tough time with their modest wages of often less than 1000 euros. Especially when you consider that unemployment is still high. This is especially true for young people, who often cannot leave home until after their 30th birthday. But the costs can also add up for residents, hibernators and home owners, so here are some budget tips.

Saving on fixed costs

Rental contract

Do you want to rent a house or apartment for a longer period of time? Make it clear in your contract which fixed costs and which maintenance are for the account of the landlord, such as those of electricity and water. The Association of Owners (VVE) or the IBI real estate tax should be for the house owner. However, also consider the maintenance costs of the swimming pool or garden.

The energy bill

Energy is relatively expensive in Spain. Endesa is one of the largest energy suppliers in Spain and manages the network. Call the English-speaking department 800 76 09 09 free of charge and say you are thinking of switching to another provider. They often give a permanent discount of at least 5%. You can also arrange at Endesa that you want to receive your invoices by email via your online account, which saves costs.

Other major providers are Iberdrola and Fenergia and of course you can also negotiate a discount and save costs if you want to switch. In addition, check whether there are favorable schemes. For example, at Endesa you can choose 2 hours of free electricity per day or a full day of the week. For lower fixed costs you can lower your wattage, but only once a year. Also consider your insulation, which benefits your wallet and the environment in both summer and winter.

The compulsory CEE energy certificate of the purchase costs about 100 euros and is valid for 10 years.

Fans instead of air conditioning

Replace your ceiling lamp with a large fan lamp. Energy-efficient and often quieter and more pleasant than the power-consuming air conditioning. Just like the Spaniards, make handy use of the persianas (roller shutters) to keep out the sun or insulate from the cold. Many households also heat with butane gas bottles, which is by far the cheapest (often also the water boiler).

Energy tip: Landlords can have a system installed where the air conditioning cannot be turned on with the windows open. You can also instal certain systems that shut off automatically after a certain amount of hours.

Internet, landline and mobile

Try to combine internet, telephone and mobile in 1 package, which is always cheaper. If that does not work, then indicating that you want to switch to the competitor is usually also effective. Cheap providers are Jazztel, Masmovil and PepePhone. In rural areas, internet via radio signal is also possible if you do not have a fixed telephone line (in the Axarquia, for example, Axartel) or via Orange‘s 4G modem (with data limit). This also saves the costs of the fixed telephone line.

Satellite TV

You can get international TV via the Astra satellite, but nowadays you also can only take Netflix and watch online to save costs. Here you set English as the language or subtitles. Or Spanish, of course, if you want to master the language for free… English satellite dishes are not automatically good for other languages and often have to be readjusted and re-directed.

By the way, houses within the cities and towns just have Spanish TV via cable where you can often turn on English or Spanish subtitles via the menu. (Except from if it is live TV, because then it will be behind). A very good Spanish practice! In connection with copywrights, many commercial programs from your home country, unfortunately, aren´t broadcasted.

Additional health insurance

Private healthcare insurance (read the article for more information) is now required for a year for those who want to become a resident in Spain from a non-EU country (like the UK after Brexit). Well-known health insurance policies are Sanitas (very complete), DKV or Adeslas (relatively cheap). Medicines are not included in this, but private clinics are and all kinds of medical examinations. In addition, the waiting times in private care are significantly shorter. English is also spoken more often in commercial clinics and among private specialists.

Nevertheless, the public Seguridad Social with the green card is also of a very high standard. In addition, keep in mind that the private insurance policies exclude things if you have a previous history. It is therefore a matter of good price comparison.

Pool and garden maintenance

Tip: Nowadays there are environmentally friendly systems for swimming pool water that requires much less chlorine or other chemicals. Not only pleasant for the wallet but also better for the eyes, skin and nature. Another piece of advice is to think of an (automatic) pool cover if the pool is not used more often. This prevents both pollution and evaporation of the water.

In addition, there are plenty of water-saving installations on the market today that are very worthwhile. Of course, maintenance is also very important because once you have an (unnoticed) leak, especially in the countryside, all your water savings will be canceled in one go.

Saving on banking costs

Check whether all your direct debits are correct via your online banking, so that you do not incur unnecessary fines. And avoid unnecessary costs for unused bank cards or postal statements. Another typically Spanish fact is that you often pay hefty commissions if you want to use the cash machine / ATM at another bank chain.

Do you want to transfer large amounts from your Spanish account, for example for the sale of a house? Then first check the bank commission. It is most convenient to have a lawyer transfer these types of amounts. They often have special deals with their bank to avoid these costs.

Incidentally, it is not strictly necessary to have a Spanish bank account when you buy a house in Spain. All direct debits (water, electricity, IBI / basura, the VVE and even the IRNR income tax) can be paid from a foreign IBAN. This saves you the costs of the bill but – if not resident – also the costs of the annual mandatory non-resident certificate that the bank must request for you (about 30 euros p.p.). Would you like a Spanish bank account for the sake of convenience? Then consider whether for this reason you can put it on one instead of two names.

Spanish mortgage

Do you have an unfavorable older Spanish mortgage? Then after a year it is possible to transfer (subrogate) the mortgage to a cheaper bank. Do check any fine commissions and conditions of linked products, such as life insurance.

Comparing and negotiating is crucial when you take out a mortgage. Also keep in mind that intermediaries often have an interest in recommending your A or B mortgage because of the commission.

Do you have a floor clause in your conditions or have you paid the administration costs of the mortgage deed yourself (notary, Property register, administration of the gestor)? Then you can reclaim this from the bank. In some cases this has to be done through legal proceedings, but there are lawyers who do this on a commission basis.

Variable cost

The supermarket

From a sample from 2021, these are the national supermarket chains from cheap to expensive: Alcampo, Mercadona, Lidl, MaxiDía, Carrefour, Aldi, Simply Market, Día and Carrefour. An average Spanish family spends 4,850 euros per year in the supermarket.

House brands are of course cheaper, but, just like in other countries, they are often not at eye level. The well-known house brand of the largest supermarket Mercadona is called Hacendado. This brand is regularly negative in the news. The extra low prices are often at the expense of the income of the producer or farmer due to Mercadona’s enormously strong economic position of power.

Markets

Flexible weekly markets often have little or no food. Larger cities often have a fixed covered market for fresh products. Usually these are not cheaper, but they offer more variety and are fun to visit.

Drugstores vs. pharmacies

In Spain you do not have cheap chemists, but there are many pharmacies that have a wide range. However, they are relatively expensive, while most supermarkets such as Mercadona have an even wider range.

Tip: ask medication in the pharmacy if it is the cheapest variant. Often there are b-brands with exactly the same composition. However, you have to ask for it.

The car costs

Car tires are a lot cheaper if you order them online. They are also mounted in front of your door, nice and easy! This saves hundreds of euros. In any case, compare your car insurance in terms of costs and coverage. The costs of the car insurance are about the same as in the rest of Europe, but on the other hand, the road tax is very cheap. Then the car itself. Despite the large number of rental cars, second-hand cars are relatively expensive, but importing is also expensive and only attractive for more expensive cars. Ask your gestor!

Paying on time pays off

If you live within a community you often get a ‘discount’ if you pay on time and this also applies to (traffic) fines.

Leisure budget tips

Tasty but prijs-friendly eating?

Extreem cheap 3 course menu del dia (Costa de la Luz)

It might sound predictable, but eat where the locals eat if you need to watch your budget. Choose a restaurant or bar from the backstreets without a large tourist terrace but with a lot of Spaniards. Here the bill is of course a lot lower. For the three-course menu del dia for around 10 euros -including drink and bread- often offers a lot for little money. They often serve fresh seasonal products according to a traditional recipe.

You can also eat your fill of free tapas if you know how to find the right bars. They are of course not at the top location, but that does not make the tapas any less tasty. In certain regions in Andalusia the tapas are always free.

Watch out when it comes to daily fresh fish per 100 grams on the menu. If you don’t want to be faced with surprises, ask for the price in advance. How good it even may look…

Rebajas (sale)

Although the rules no longer seem so strict, it is best to shop cheaply during the rebajas (sale) in the second week of January (after Three Kings) and the first week of July. Busy, especially in the shopping centers! And certainly in the El Corte Ingles department store, a kind of very successful conveniencestore with luxury products.

Museums

In many cities, the museums are free on Sunday afternoons. In high season it is not much fun, but out of season, it saves a might be worth it. Especially with a whole family.

Second-hand

Although it seems more of a thing to foreigners, there is quite a bit of business both online and in real life at second-hand and flea markets. Obviously ideal for toys, books and clothing. The most popular second-hand site is Milanuncios, the Spanish Marketplace. In addition, Facebook has many local groups and there is a popular app called Wallapop. For clothing there´s a website named Vinted.

Budgettips for gifts

My favorite of present budgettips: tickets for the Haman in Malaga

Adults often don’t celebrate birthdays. However, if you are invited to a communion party or wedding, then you are expected to pay a lot of money. Preferably by a non-anonymous envelope.

No inspiration? Take a look at the discount sites Groupon or Groupalia for great ideas for gifts or outings. My favorite? The oriental Hamman in Malaga or an overnight stay in one of Spain’s great Paradores! Nice to give, even better to receive 🙂

Flying

In my opinion European flights are cheapest if you book far in advance for the low season and Wednesday is the cheapest day. Then you already have tickets from 50 euros excluding luggage. According to a worldwide investigation, however, 6 weeks before should be the cheapest (unless the flight is already fully booked by then).

Keep in mind the travel times due to the journey to and from a cheaper but more distant airport. Low-cost budget airlines are Transavia, Easyjet, Budgetair, Vueling and Ryanair . Compare them via one of the many price comparison sites like Skyscanner but check if they show all flight companies.

Extra earnings via renting out or B&B

Due to the low interest rates, many people invest in the purchase of holiday homes and sooner or later they think about renting out their house in Andalusia or the always sunny Costa del Sol. In many cases, however, homeowners – in my opinion – overestimate the real occupancy rate plus associated income and underestimate the total cost and tax. So make a realistic estimate when you buy to rent out, whether it concerns room rental, a B & amp; B or the rental of the entire home.

Please note that you must be registered in the RTA, Registro Turismo de Andalucia and your accommodation must meet certain conditions. In addition, you must of course pay IRNR (non-residents) or IRPF tax (residents) on your rental profit, 19% for EU residents with a house in Spain, 24% for non-EU home owners. You also have costs for administration, rental broker, publicity, cleaning and extra maintenance.

Unexpected costs after house purchase

Budget tips and cost savings during house purchase

If you’re unlucky, this really is the biggest expense of all. So please do not save on the costs of the legal investigation of a good, independent lawyer specialized in property law. Especially if you buy in the countryside of Andalusia. The one percent of your purchase price cannot be compared to the loss if something is wrong. In addition, the purchasing process and the risks of a house purchase in Spain are very different from the Netherlands or Belgium.

In my work at a law firm in Andalusia, I really experience all kinds of things with clients who run into problems áfter the purchase. Had they come earlier, most of the problems could have been avoided through administrative, fiscal or legal adjustments. They could have agreed on a price compensation or they could always have chosen another house. I could write a book about it! A selection of the problems of clients who bought without a good lawyer.

Tip… also read the pages BUDGET TIPS FOR RESIDENTS IN SPAIN and CHECKLIST FOR NEW HOMEOWNERS IN SPAIN.