Victor and I came back from 2 weeks in Madrid for Navidades Jan. 10th, more convinced than ever that the time to move back has arrived.

We grilled all the sisters, brothers and in-laws about cost of living, job prospects, etc. But, being the fiscal conservative that I am, I still want to know - can you save anything?

And if you do have something left over at "el fin de mes", where do you put it? Simple checking, savings account? Retirement account? Pre-paying the mortgage? Bar bill?

Thanks!

Most people can not save anything and just struggle to survive or break even.

I suppose if you had any money left over it would go to your retirement savings.

In my opinion about people coming over to live and work in Spain (longer term) I would have to point out that there seems to be two kinds.

Ones that come over here with a really good job or that have a lot of money and who join the already existing rich class or those unfortunate other souls who are looking for a life change and come to Spain too early and unprepared with all of their hopes and dreams only to find that it is harder than they were led to believe and that they have traveled all the way to Spain just to join the poor class.

Many of these people struggle to survive and then give up the fight and go back home after realizing that they in fact did come here too early on in their lives as I suggest. Too early because they did not have the cash to live out the rest of their lives on or they could not find a job in Spain that they could support themselves on (No legal papers, no quality job offers, etc.).

Also. There are many types of people out there and not everyone is suited to do all that it takes to make things work out for you in Spain.
Where there is the will. There is a way. Not everyone has the will...

So if you have enough money saved up to live off of until you click in Spain and can start earning enough money once youa are here and if you can give up all of the things that you'll miss from the US then go for it.

Being able to save in Spain is, at its root, the same as in the States. It is the difference between your expenses and your income.

The shock most people are not prepared for is the drastically lower income you end up with when working in Spain. Unless you are very lucky and are paid an American (or English) wage while working here (e.g. your company sends you to work in Spain) or you find some lucrative niche and make a bundle, you're going to have a bit of rough ride.

Even though I'm working for IBM here in Madrid, my salary even with all the perks and garnishings is less than a third of what I would be paid by IBM if I lived in Washington, D.C.

This wouldn't be so bad if not for the fact that mortgages and rents here are virtually the same as those in D.C. Many other things are cheaper and some, like electronics, are more expensive.

In the end you have to make some big sacrifices. If you come here without a job (and it's pretty tough to get a job here without being a resident) you're looking at either spending a large amount of savings on just living until you get that job or living on next to nothing and making a living as an English teacher.

If in the end you get a stable job you'll probably have enough for savings but I haven't seen particular good options for savings here. The rates for savings accounts aren't very attractive and the Bolso (Spain's stock market) doesn't seem to perform all that well.

Right now, Juliette and I have stock holdings and real estate in the US which do much better (so far) and money that goes for savings goes into these two. If you have the wherewithall I'd suggest buying a small apartment or house in an "upwardly mobile district" that you can rent out, find a good management company to oversee it and then move here. Also bring with you the equivalent of a year's worth of American wage (i.e. what you get paid in a year) and plan to live frugally until you've secured your place and job.

Oh... and check with the board constantly to find out what you should be paying for what. That'll save you loads of cash.

Good luck. It was definitely worth it for us to move away from the US. Hope it is for you too.

- Roland

I agree with Roland on his comment that your savings here in Spain is the difference between your expenses and your income and that most people are not prepared for the shock of the drastically lower income they end up with here.

The problem that I have seen time and time again is that many of these shellshocked people do not adjust their spending to their new lower income and insist on going out several nights of the week...and who blames them? Those tapas and never ending nightlife are mighty hard to resist! However, the sooner you can come to grips with your income/spending levels, the more comfortable you will be in the long run.

I also think that a single person has a much more difficult time making ends meet than a couple (two can live almost as cheaply as one). Neither my husband nor I make anywhere near a glamourous income...in fact mine is based on the income of an English teacher and the majority of it is rolled back into financing the new business, and his isn't that much better. However, we are able to live off of one salary with a bit of savings, and finance my business with a bit of savings with the other income. It's a struggle but no one said having a business was easy and as Madrid Insider said, where there's a will there's a way.

We both contribute to private pension plans monthly as well as have been saving to buy a house for the past 1.5 years. Admittedly we don't save as much as we should/could...but in the end, we must enjoy life as well, as modestly as that might be.

Sacrifices must be made as well. For us, living in a less "chic" neighborhood, but being able to save was more important. So, still being centrally located and very public transport accessible, we have a much lower rent than someone who wants to be in the midst of it all in Chueca or Lavapies.

You have to decide what your personal threshold is and where you want to make your sacrifices. Then, have the savings automatically deducted from your account every month before you see it and are tempted to spend it.

hey Coco, congrats on your decision to give it a go

some of the best advice i have read on this board is above, read it carefully.

you asked...

quote:

And if you do have something left over at "el fin de mes", where do you put it? Simple checking, savings account? Retirement account? Pre-paying the mortgage? Bar bill?

- "Simple checking, savings account?" - NO WAY. spanish banks are useless when it comes to making your money grow in a checking/savings account.

- "Retirement account?" - YES, aside from the monthly payments in, if i have extra at the end of the month i sometimes add a bit more.

- "Pre-paying the mortgage?" - i personally have no mortgage since buying an apt. is not on my agenda (yet) due to the insane real estate prices here.

- "Bar bill?" - well, seeing as they do not run tabs here (as a general rule), can never get a big bar bill going

one of the most important things when moving here is having a proverbial "nest egg" (savings) to fall back on and help you get settled. and as Chica wisely advised, the nest egg is not for going out partying every night

as Rocco said, the majority of those who move her planning to make it permanent end up packing it in and heading home. imho, that is fine since it is better to have tried and not succeeded than never to have tried at all.

so much great advice above, i agree with ALL of it so not sure what to comment on.

will just add my 2 eurocents.

keep in mind that the advice here so far has been given by people who have weathered the rough times and have been here for at least a few years.

i would like to hear from people who gave it a go and then decided to go back to home as well so feel free to pop in all of you.

i have found that spanish banks are useless when it comes to making your money grow (see Roland's advice above).

personally, i keep the least amt. of money possible in my spanish accounts. even for a basic savings account i would recommend ing direct (http://www.ingdirect.es) over any spanish account. an account at ing direct is not a mail account but rather a secondary one to keep most of your money in.

if you really want to save for retirement, do as Chica says and start a pension fund (ing direct also has a good one). you would be surprised by how much you can accumulate just by putting 100 to 200 euros per month into a retirement fund.

i saw a report the other day on the news that, amongst other things, stated that the spaniards save on average only 110 euros per year for retirement compared to the 1,000 that north americans save

it took me 4 years (or 5) but i am proud to say that i make about 75% of what i would be making if i were still a teacher back on long island. the most important thing however is that i live where i want to live and how i want to live.

i know a finacial advisor (also an old member of this board) named "serge boonman". he works for "ing national-nederlanden" (parent company of ing direct), feel free to give him a call on...

- office: 91 602 48 48
- mobile: 619 86 67 96

they offer quite a few savings plans at http://www.nne.es that include pure savings plans, retirement funds, private health insurance, workers comp., etc...

i am opening an ofi-plan profesional this week (unless i find something wrong with it before then )

having my own business is great and yes, i found a nich market but it also means that my salary is not fixed so i have to save for the future.

i have to admit, i spend more than i should on gadgets (computers, cameras, cell phones, etc...) but only when i get a big influx of funds and know i can afford it that month. should i save the cash? YES but i have my whims and treat myself once in a while.

i do make sure i have enough to put into the my savings funds and retirement plan however, they have priority over my "toys".

as Roland and Chica said, it is all relative to what your income and expenses are but YES, you can save money here.

aaaahhh and before i forget, the best bit of adv ice was from Roland...

quote:

Oh... and check with the board constantly to find out what you should be paying for what. That'll save you loads of cash.

far too often board members make a decision before looking/asking here and then find out afterwards that they wasted money.

saludos,
jer...

Thank you so much for your responses! Jer - the financial guy recommendation rocks. Thank you.

Victor and I are both madly calculating potential cost of living. We will arrive with a cash reserve to get us through the first few months. And we both have retirement accounts started here.

Are we being wildly optimistic to assume that 2 bi-lingual resident professionals each with 8+ years of experience in teaching, administration, customer service, etc., will eventually find jobs paying 18,000 to 22,000 euros per year?

I had a chat with the guy who's in charge of my firm's Madrid office (yeah, keep your fingers crossed ) who recommended renting, given the prices in Madrid. He claims there's no real estate bubble, because no one ever unloads their investment property. Doesn't sound like prices are coming down.

Eventually, yes, I'd say you'll get those jobs. Just be prepared for it to take longer than you might think, unless you're really lucky (which happens!). Foreigners, like any minority group, have to prove themselves better than the natives to get their jobs. But if you are bi-lingual and resident EU, it will happen faster.

hey Coco.

well, imho (in my humble opinion) historically administration and customer service gigs are not the best paid jobs here but with the 2 double pays per year (xmas and summer), you should be able to come close to 18,000 euros/year.

bringing it up to the 22,000 level will take some searching and a lot of patience.

let's say your household income is 3,000 euros/month (18,000 euros.year x 2 / 12 months), that is before taxes of course.

as a couple, living will be no problem. you will have a nice rental apt., money for food, entertainment, going out once in a while, etc... you may also save a bit each month and have some for travel.

in my opinion, the trouble comes when it is time to buy a place to live! with the average apt. here costing upwards of 300,000 euros, that can easily give you a mortgage of 1,500-1,800 euros a month for 25-30 years there goes more than half of your monthly income!!! living will be tight.

you can cross that bridge when you come to it but just a heads up for ya.

while you rent, living will be easier since you can get a nice 1-2 bedroom for under 1,000 euros/month in a decent area of madrid (city center or burbs).

some people say that renting is throwing money away and in a sense they are right but for the moment i prefer to "throw away" 650 euros in rent (we get a fantastic deal from our landlady ) to rent a beautiful flat in the plaza mayor than to pay 1,500 euros/month on a mortgage. i save a lot of money this way. everyone's case is different so you will find your way and see what is best for you two. there WILL be hiccups along the way, roll with them, like "agua off a ducks back"

oh and by the way, you can't count on your salary here going up in proportion to the cost of living. you will hear every spaniard say "aqui todo sube menos los sueldos" ("here everything goes up except the salaries") and it is pretty much true. salaries go up here minimally but the cost of living goes up a lot faster.

take it in stride my friend!!!

another important thing to remember is that you are moving here (or should be) for a change of lifestyle, not simply for a change of a place to work and pass the days. if one just wants a change of scenery, there are FAR BETTER and more lucrative countries to live/work in than Spain.

saludos,
jer...

Everything Jer said is dead on. However I would caution you that his amazing deal (650/month in the center) is NOT TYPICAL.

Not that anything about Jer is typical.

jejejeje

thanks for the caveat jules

no, the deal is actually next to impossible these days but you can still score a nice 1-2 bedroom for under 1,000/month.

you and Roland got a NICE place for less but as you know, it takes some lookin. leave no stone unturned

i have been privvy to watching your living quarters situation evolve over time and imo, it just gets better and better.

saludos,
jer...

Absolutely. That's why I also agree with the suggestion to check with the board and mm'ers on everything. Even though we were on the board we still wasted a whole lotta money as we learned what things cost for the clueless, and what things could cost.

Generally speaking wages for service industry jobs (shop assistant, waitress, secretary telemarketer etc) are really really low. Be very difficult to live here (min wage I'm told is 700 euros a month)

Wages for Managers etc are a third lower than Northern Europe. A friend works as a Bar Manager and he earns 2000 a month or 24000 a year and his wife needs to work as well.

Teaching English, which is what most expats do pays between 1000 and 2500 a month (10 to 18 euros an hour based on 25 hours a week)

I must say that inspite of the low wages the patios are allways packed the bars always hoppen!

quote:

it took me 4 years (or 5) but i am proud to say that i make about 75% of what i would be making if i were still a teacher back on long island. the most important thing however is that i live where i want to live and how i want to live.


saludos,
jer...

BTW what do you (and the wife???) do for a living? Besides this and other boards you have.

hey THM.

whoooooaaaaaaaa BACK UP!!!

multimadrid is NOT A MONEY THING.
the minimal money it does make from sponsors goes right back into it (and then some).

my wife works (in tres cantos) at "sogecable", huge conglomerate media company part of "grupo prisa" which owns the "el país" newspaper amongst other things (many other things).

she makes an average salary and works at the "40tv" channel which is the equivalent of Mtv in spain.

for money, i run...

www.onspanishtime.com
www.spainSIM.com
www.europhonecards.org
www.spain720.com (just starting up)
www.workstationsol.com (just starting up)

you have surely seen my banners and links around multimadrid.

it is all about finding a good market (a nich so to speak).

when i got here many, many moons ago i used to teach english, translate and also do tech work and some freelance web design for ex-pats in madrid.

saludos,
jer...

My apologies, I was wondering what how you earned an income. I've seen the other boards,but I didn't realise they were all connected. As soon as Chris gets her work phone I'll be ordering a new SIM card. I have one I bought used with a Movie Star Sim but I'm not very happy with it (expensive). For he expat message boards can be a life line and yours rates right up there with the best I've seen. I've spent some time at Madridman but his board is more geared towards tourists (some good info though) and Britishexpats.com and Expatfocus.com have very little to do with Madrid mostly Brits on the coast.

How long does your wife to to commute to work each day each day? For us its a 15 min walk to Piramides and then 30 to 45 min journey to Tres Cantos, on top of the long hours Chris has to work (9 to 7 usually) means its out the door at 7:45 and home usually 8 to 8:30 and if its a running day than its up a 6:10. Plus we've always preferred to live on the edge of the city Rather than in the city.

Back on topic, my Dad always said expenses rise to exceed income, and how true it is, it takes a discipline person to save money. For us its been doubly difficult as Chris is a consultant and that means lots of travel, and even though they pay for it all it never covers all the costs, particularly since her company was always so slow to pay, we ended up having to put out all the cash and wait to get it back and its a huge drain on the bank account. With moving here is means being off the road (some travel but only for a few days at a time rather than long term relocation) which will make it easier to budget and for me, going back to work. For the last five years I've joined Chris at all her project locations, so its meant I haven't been working. Nice at first but it wears thin after a while. So I'm hoping I can practise what I always preach, live on one income, save the other.

Rob