5 finance tips if you just moved to Spain.
Moving to a new country will surely be one of the most important moments in the life of any person. It comes with a to-do list as long as your arm, from applying for a visa and organizing accommodation to the process of actually settling into your new place of work or study.
Amidst all the activity, it’s worth taking a moment to consider how you can ensure you get off to a great financial start in Spain. This is where our guide comes in. We will go over some key points that every newcomer to Spain should consider, from the tax system in the country to the best way to send money abroad.
Tip 1 – Create a local bank account
Opening a new bank account in Spain can really help lay the foundation for your new life here. You will be required to show official documents, which include the following:
Photo identification, such as your passport
Proof of your residence or address in Spain , such as a recent utility bill
Proof of you being an employee or student, such as a staff contract or student ID
Your NIE or foreign identification number
Please note that documents must be translated into Spanish to be acceptable. This must be done by a certified translator, known as a “sworn translator”. Fortunately, it is quite easy to find a certified translator online.
Choosing the right bank is also important. Spain has a plethora of options, including big names like Santander, CaixaBank and BBVA. Do some research online beforehand and check what services each bank offers, paying particular attention to any fees that may be charged for operating the account.
Tip 2: Understand how taxes work
Knowing the ins and outs of taxes is not anyone’s favourite part of moving to a new country; however, it is of course essential to know what is in store when it comes to the following:
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Income tax
social security contributions
Income tax is calculated according to your income, in other words, your tax bracket. The higher your tax bracket, the higher your obligation to pay. However, in Spain the situation is complicated by the fact that income tax is divided between national and regional governments. The national government imposes established rates for each tax category that apply throughout Spain; however, local rates charged by regional governments will vary. This means that the total amount you have to pay will depend on exactly where you live in Spain.
Social security contributions, meanwhile, are largely covered by your employer, though you’ll also be responsible for paying a percentage of your salary or wages.
Both income tax and social security payments are automatically deducted from your salary and it is important to check what the tax-free allowances and percentages are currently payable. This way you will know exactly how much you will take home from work.
Tip 3: plan your budget
The vibrant culture, beautiful architecture, and golden weather help make Spain one of the most sought after places for expats. However, living expenses can be higher than many are used to. It’s a good idea to keep this in mind so you can plan your spending and make sure you don’t get caught later.
We recommend sitting down and writing down your anticipated expenses in a given month. This budget plan should include the following:
rent payments
The total cost of your utility bills
Mobile phone and internet broadband bills
Food expenses
transportation costs
Money to spend on socializing and entertainment.
Tip 4: Stay on top of the exchange rate
We know that one of the reasons you have moved to Spain may be to work and send money to help your loved ones in your home country. If so, it is important to keep track of the exchange rate between the euro and your country’s currency.
Exchange rates tend to fluctuate all the time, depending on economic and political influences. This means that sending the same amount in euros may result in your recipient being charged different amounts, depending on the day or even the minute you choose to make the transfer. Thanks to the Internet, you can very quickly check what the relevant exchange rate is and decide whether it is worth sending the money now or at another time.
Tip 5 – Find an affordable or cost-effective way to send money home
There can be all kinds of reasons why you need to make international money transfers. You may want to send a friend a gift on their birthday, make a business investment, or provide regular financial support to dependent family members.
Regardless of why or how often you need to send money, it’s wise to shop around, as some will cost more than others, both because of higher fees and potentially nasty exchange rates that mean your euros will translate to less than your money. local currency.
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