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How to Save Money & Do Finance, for Expats in Spain

in Expat Life, Expat Tips and Hints, Facebook Posts
Finance blogpost - Indalo Transport

The Complete Expats Guide to Finance in Spain – save money and learn the tricks that the bankers don’t want you know!

Sterling. The Great British Pound. Whatever you want to call it, it’s quite a magical thing, really. It’s often quite hard to come by, it seems to get frittered away all too easily, and most people wish that they could always have more of it.

Earning it brings you a sense of pride and spending it can either leave you feeling almightily aggrieved or extremely elated.

However, whenever you exchange Sterling for ‘holiday money’ like the Euro, for example, which in itself is exciting because it means you’re jetting off to sun and adventure (sea and sand optional), you get transformed, as if by magic, into a carefree spender. All the stuffy spend-thrift rules of the Pound are thrown well and truly out the window as you reap the benefits of all that the brightly coloured and quirky Euro bank notes can provide.

But as soon as you get back to Britain, it’s back to the dull, drab money you’re used to and the cycle of earning, saving, and spending (whether you like it or not) starts all over again…

But what if you were thinking of becoming an expat?

What if you wanted to settle down in Spain?

How do you move money across to pay for that fabulous new property?

For day to day expenses, do you use an International account, Spanish account or an online account?

How do you open a Spanish bank account?

How do you go about transitioning yourself from using the Sterling you grew up with to the Euro you’ve only ever spent whilst on holiday?

Should you keep your British bank account open?

Can you get by quite easily with just using your UK-based debit card?

And is it really necessary to constantly work out how much the shopping would have come to in Pounds?

These and other questions are very important to ask, as all too often expats don’t consider the best way to move their money abroad, so as to save the maximum amount during a major purchase, or research how they’re going to exchange it on a day to day basis once they’ve moved to Spain.

Because maintaining your finances is so crucial, this in-depth post covers all about finances in Spain, including info on international bank accounts, how to open a Spanish bank account, and how to save money using professional money exchange services, and the revolutionary new money exchange apps now available on smartphones.

euronotescoins - Indalo Transport

Your new friends, not a bit like Sterling

So read on to learn what you need to do to adjust to earning, saving and spending Euros every day, and how to beat the bankers at their own game!

Important : Whilst we have lived in Spain many years and may use some of the services outlined in this article, we are not, and never have been, financial advisors. You must always get independant financial advice from trained experts, and discuss your personal situation with a professional, before entering into any contract involving your money.

Keep Your UK Bank Account Open

First things first, it’s always worth keeping your existing bank account open back in the UK. Obviously, this makes sense if you intend to keep assets back home (like property) or if you’ll be receiving regular payments into that account (from a pension, or from a tenant), but it also makes sense even if you won’t be keeping any links with the old country.

Keeping your UK bank account open means that if and when you ever return to Britain, you have an account already in place, and for trips back to see family you can access Sterling without needing to exchange any currency.

It’s also worth mentioning that any expat who has closed their bank account in Britain and who has lived outside the UK for more than a year will find it very difficult to open an account if they come back.

It’s always a good idea to keep a bank account open for as long as you can anyway because it makes a positive impact on your credit rating and it helps build trust with the bank itself.

Before you leave for your new home, make sure you inform them of your new address abroad, for any important correspondence.  Then set up internet banking, stop the paper statements, and use your internet to access the account easily in Spain.

Good To Know – Using Your UK-based Debit/Credit Card Abroad Incurs Fees

cards - Indalo Transport

Beware excessive fees when abroad

If you’re still going to be receiving income into your UK bank account, then it is possible for you to continue using your British debit or credit card whilst in Spain.

This can be quite handy because all you have to do is head to the nearest Cash Machine to get access to Euros. But remember, every time you use your UK-based debit or credit card you will be charged a fee. To see how much your bank will charge you, check out Money Saving Expert’s list of card charges.

 

A Good Idea Before You Leave Is To Open An International Bank Account

As an expat settling in Spain, you will quickly realise how difficult it is to manage your money from a single currency bank account which is based about 2,000km away from you, back in Britain. So the best thing to do, before you leave, is to open an international bank account, either with your current bank, or a new one if it has great introductory offers for you to benefit from.

An international bank account will enable you to access your money, in whichever currency you need it in, whenever you need it. These Euro accounts are provided by offshore divisions of UK high street banks and typically come with the usual perks associated with a normal, British-based current account, such as a debit card and an overdraft facility. They’re also great because they allow you to withdraw Euros at local cash machines so that you avoid the high currency conversion charges when using Sterling cards.

Eurobank - Indalo Transport

A Euro Account is always a good idea

With these accounts though, it’s important to remember that you will likely have to pay a monthly or yearly fee to keep the account and its benefits open, however this is something you will have to get used to as the Spanish also charge a yearly or quarterly fee for the privilege of being able to bank with them anyway.

It’s worth noting that some international bank accounts are free if you keep a minimum amount of Sterling or Euros in the account.

If you apply for an international bank account and are accepted, then you’re going to have the peace of mind which comes from being a customer of an established British bank (usually with access to 24/7 online and telephone banking with English-speaking customer service), and your Euros are exchanged safely, all in one place (albeit at Bank rates, which aren’t too clever)

The two main banks for Euro International Current Accounts, and which allow you to apply online, are Lloyds Bank and Barclays.

A European Online Bank Account in Euros – Why Not Try Number 26

number26 - Indalo Transport

Their slogan is “Run your entire financial life from your phone” – now that’s a bold statement! Click on the picture to go to the website (opens a new tab)

Number 26 is a German-based online bank, available in Spain, and a variety of other European countries including France and Italy. Both a website and handy app, this really is banking as it should be.

You can only apply for this bank account once you’ve got a permanent address in Spain, but as soon as you have that, you can apply from your smart phone or tablet and the process is incredibly quick and easy. Honestly, it takes less than 10 minutes to do and if you apply before midnight you’ll be able to find out whether you’ve been approved or not!

After you’ve applied online, be prepared for a video call with an agent who will confirm your identity. You’ll need your passport to hand, proof of address and a smartphone with a decent camera.

The identification process is like something out of a Sci-Fi movie. You have a video call with a representative who instructs you to hold up your documents and then they take control of your phone, use it to capture a photo (as proof), which then gets uploaded to the computer they’re using.

After doing this and answering a few questions, your Number 26 MasterCard will be on its way. Unlike other international bank accounts, Number 26 offers fee-free banking and because you’ve got a European bank account, complete with IBAN, you can withdraw Euros from any Cash Machine, free of charge. Perfect!

How To Open a Spanish Bank Account

Once you’ve decided to become an expat in Spain, it’s a good idea to open a local bank account. As well as paying for regular services like water and electricity (through direct debits or ‘domiciados’), you’ll find that some companies will only deal with you if you can prove you have a bank account actually in Spain.  The Banks in Spain are no different to any other country, and must abide by Spanish and European financial regulations.

It takes a couple of weeks to get your bank account sorted and for you to receive your bank card(s). The main difference between the Spanish banks and British ones is that they’re only open in the morning, usually 8.30am – 2pm.

siesta - Indalo Transport

The Spanish love their siestas

Step One – Book an Appointment and Check Whether You’ll Need To Bring a “Certificado De No residente”

There are many banks in Spain, the main ones are:

Banco de Sabadell

Banco Popular

Santander

BBVA

La Caixa

Cajamar

Once you have chosen which bank you’re going to visit, it’s important to remember that you’re going to need a good understanding of Spanish to be able to talk to the advisor, unless you’re lucky and find that the bank has staff members who speak English.

If you don’t know much Spanish, see if there is someone who does who can go with you. If you don’t, you may miss out on some really good deals.

Unless you are already a Spanish resident, you will have to open a Spanish bank account as a non-resident. Make sure the first question you ask when making an appointment at your chosen bank is ¿Tengo que presentar un certificado de no residente?” which means, “Do I have to present a non-resident letter?” If they say no, that will save you loads of hassle.

(This certifciate is basically a letter from the local Police Station which states that they have seen your passport, that it’s valid and that you’re not currently a resident. However, because the Spanish system is a little flawed, the responsibilities of the local police vary, seemingly at random, don’t be surprised if you’re told to go to another station to get your letter. Oh and it’ll take 10 to 12 days to receive, too. So best avoided altogether if you can.)

Step Two – Attend Your Appointment and Bring ID With You

When it’s time to go to the bank, make sure that you take the following items with you, as sometimes Spanish banks require different documents:

  • Photographic proof of identity (passport or National Identity Card from the country of origin for each of the applicants)
  • Proof of occupation or status (employment contract/payslip, letter from accountant/lawyer, pension or disability payment confirmation, student card). This is an extra requirement introduced in 2007 by the Bank of Spain as a measure to combat money-laundering
  • Residents also need to produce their Foreigner Identification Number ‘Residencia’ certificate (Número de Identificación de Extranjeros or NIE)
  • Confirmation of address (utility bill, driving licence or council tax bill; proof of address must have been issued within the last 3 months)

Step Three – Choose Your Account

There are two basic types of account:

  • Checking account aka Current account
  • Passbook aka Savings account

It’s important to remember that Spanish banks love their fees. To open an account you must make a small deposit and you should be aware that there may be commissions for deposits, withdrawals and a maintenance fee.

Some banks will also require you to maintain a minimum balance, usually of at least 500 Euros, at all times.

Most Spanish banks charge an annual or quarterly fee for administration of a current account (cuenta corriente) and is typically 15–30 Euros. There are often additional charges for credit (tarjeta de crédito) and debit cards (tarjeta de débito); additional account holders; savings accounts (cuenta de ahorros) and other items like cheque/check books.

 

Money Exchange Specialists

Euros - Indalo Transport

Professionals who exchange money day in day out

If you’re looking to make a large, one-off payment, as most will do to buy an apartment or villa, or to make regular payments from the UK, it may be worth considering using a trusted Money Exchange specialist.  These professionals deal in this sort of thing day in day out, and they can make your money go further by giving you fantastic exchange rates which are better than the banks.

Through our links with Move Assured, the professional trade association, Indalo Transport have partnered with Moneycorp, to help you save money when moving your funds abroad. As well as being the UK’s largest specialist foreign currency provider, they’ve been around for over 35 years and now exchange £22bn for 2.4m customers per year.

Moneycorp can help you to send money to Spain at much better rates than normal banks. If moving to or from Spain, Moneycorp will help make sure it’s as pain-free as possible. If you want to find out more, click here

New Wave Apps

revolut - Indalo Transport

Good slogan – love it!

If you’re already an expat and looking for ways to really save money on your exchanges, the new apps from Transferwise or Revolut are ground breaking, in that they are fast & incredibly easy to use. Their bank-beating rates and low fees mean that when you need to exchange your Sterling for Euros, you’ll be saving money every time you make a transfer, as it’s all done online rather than through a bank.

Revolut goes even further, as you can order a mastercard from within the app, and all the security and verification checks are also carried out using the camera on your smartphone – all you have to do is follow the instructions. Truly amazing!

Understandably, some people may find using an online exchange service a tad risky, so we’ve put together a mini-guide on how to tell whether the online money exchange you’re about to use is legitimate or not:-

1.Check the domain name – Every online store should have an SSL, a Secure Sockets Layer. This means that any information sent between you and the store becomes encrypted so hackers can’t intercept any of the data. Just look for the little padlock, and you’ll know the site is safe, secure and does what it says.

safe site - Indalo Transport

Make sure the little green padlock is there

2. Look for spelling and grammar mistakes – Many sleek and professional looking websites can be notched up in one day, hence, why so many bogus websites have sprung up, seemingly overnight. A lot of online scamming comes from China, and if English isn’t your first language, well, the content you write never reads well to those whose native language it is. At the same time, if a site has been rushed, spelling and grammar mistakes can occur because the authors aren’t really bothered about their content, they’re hoping you just skim, read and pay.

3. Check the site for a privacy statement, blog, and in-depth information about the company and their products. This information is usually found in the website’s footer or “About Page”, “Contact Us” page, or could come under “Terms and Conditions”. Reputable sites will tell you how they protect your personal information and secure your Credit or Debit card data and whether they sell information about their customers on to other companies. This is a disclosure statement and you should consider whether you feel comfortable with a site’s policy before using their services.

4. Check the images and the logos. Are they low quality and hazy? If they are, then, consider it a possibility that the images have just been lifted from somewhere else, made bigger or smaller and therefore that’s why they’re looking a bit squiffy. It is true that to keep http requests to a minimum and to increase site performance, online services shouldn’t be filled with huge, slow loading, HD-quality images, but there are ways around this without having to impair the quality of the photographs.

5. Check to see if the money exchange site has an established date and contact details. All legitimate companies will provide contact details, in particular, a phone number and e-mail address, and will urge you to get in touch if you have any questions or queries. The calls will always be answered, never diverted, and your e-mails will never get bounced back. So you can test this if you wish, first.

6. Check for genuine customer reviews. Great online money exchanges which are trustworthy and deliver great service aren’t afraid to display reviews, or at least, like Money Corp, a FeeFo Customer Service Rating (theirs is 97 per cent, by the way!) Alternatively, type in the company name in a search engine and see if other customers have reviewed them.

Forget Your Own Currency Conversions

converting - Indalo Transport

Resist the urge to continuously compare prices with ‘back home’!

Many British expats can’t help themselves. When we’re shopping in Spanish supermarkets, we can’t help but stand, staring at a jar of Bolognese sauce or a packet of mince, trying to work out whether it’s cheaper or more expensive to buy here in Spain, than back in the UK.

It’s always nice to feel like you’re saving money, or are getting a good deal, but in the end, Spain is your home now and the Euro is no longer just holiday money. You don’t need to compare prices to get by, you’ve just got to look at the 8L bottle of water and say, that’s 0.79cents, nothing more, nothing less, no other currency. For bigger items, you may find the difference is huge, which is when it may pay you to use our services for UK Shopping from Spain. (opens in new tab)

We hope that you have found our suggestions and guides useful and we wish you all the best with opening the bank account of your choice, and dealing with money exchange on a day to day basis.

If, on your financial expat journey you pick up any tips, advice or guidance about how to handle your Euros and you’d like to share your thoughts with other Brits looking to emigrate, please get in touch and we’d be glad to share them for you.

Important Note – Please Read: While we may love some of the resources mentioned in this blog post, none of the information in this blog post constitutes, nor should be construed as, financial advice. You must always satisfy yourself that the products and services you use are adequate, legal and do what you want them to do. Thanks for your understanding.

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