The Frugal Expat

The downturn of the economy is also affecting expats in Germany. Some of you may face layoffs and some may just want to cut down on spending because of recent losses in 401Ks and retirement plans.

Below is a list of ideas on living frugally. Feel free to share comments and ideas on how to cut down on expenses:

1. Create a Budget

Since no one is going to bail you or me out the way AIG or GM has been bailed out, creating an overview of your monthly expenses is the best way to start cutting costs. Put your Excel spreadsheet program to use and create a personal budget.

Enter regular monthly expenses like rent, utilities, groceries, car insurance, gas -you know, the things you need to live on. The emphasis here is on "things you need" not things you want. As expats, our travel budget is an important one and some of us may forego on getting regular haircuts and save up for a one-night stay in a real, fortress-like castle complete with in-room suit and armor. The point is, be clear about your needs and wants.

2. Start cutting back on luxuries

Do you really need a monthly pedicure? Can you buy your beer in the store instead of going out? Do you need to use the car or could you walk? Can you work out at home instead of the gym? Start trimming expenses from your budget that you can do without.

3. Spend wisely

Once you have identified your expenses, look for creative ways to save on the things you need. In the US, I found newspaper coupons to be useful only if you wanted to fill up your shopping cart with junkfood. In Germany, I regularly see discounts on essential and basic food items like produce and meat. These are labeled with an "Aktionspreis" or discounted price.

I also found that signing up to the frequent shopper points ("Punkte") was a way of getting brand-name items (from Villeroy and Boch or Fila, for example) for less at the grocery store. So instead of paying retail prices for brand name towels and luggage, I redeemed my points for these items at the grocery store. Ok.. this falls more under the "want" category rather than the "need" category.

Look at your insurance coverages and see if there are areas to cut back on. If you drive an old car, can you lower collision coverage or could you lower life insurance rates.

4. Sell what you don't need

I have not explored this yet but I can imagine that there is a good niche market for selling American things in Germany - i.e. desirable American brand names and items like the Levi jeans you never fit in or the Harley Davidson jacket hiding in the deep, dark corner of your closet. Check out Craig's List for Germany. Or contact your city hall to find out if you can participate at a Sunday flea market "Flohmarkt"), a popular way to sell a lot of your stuff at once. Some laid-off expats might have to pay their way back to the US and this is a good option to
lighten your load and reduce shipping costs.

5. Network

Put Twitter to good use and inform your friends of sales, bargains and great finds. Who cares if you are you are picking the lint out of your belly button - tell me where I can find a good deal on summer tires in Germany or which store just opened and is handing out free samples of stuff. Better yet - tell me who is hiring.

Use Facebook and other online social networks in the same manner - network with people who are great bargain-hunters.

6. Little ways to save

Think of every aspect of your daily routine as a way to save money. My list of examples:

a. Cut down on the time you shower, shut off lights in the room when you leave and encourage your kids to do the same. Turn off PCs and unplug TVs in the evening.

b. Take your lunch to work.

c. Cut down on using your clothes dryer and drip-dry your clothes on a cool German clothes rack. This will cut down on wear-and-tear of your clothes.

d. Wear your clothes more than once, especially if you layer them.

e. Instead of going out to eat, cook a healthy meal at home. Invite friends for coffee instead of going out to your corner coffee shop for a 3-Euro Latte Macchiato.

f. Rent a movie at your local Videothek, instead of going out.

g. Walk to the corner store and leave the car at home.

h. If you must travel (and expats always do), check out travel bargains. Americans are cutting back on overseas vacations so hotels and airfares are coming down.

i. Buy energy-saving bulbs and appliances. In Germany, fluorescent bulbs are less expensive than incandescent ones.

j. Email and Skype your relatives in the US more often. Regular mail and international calls are very expensive in Germany.

k. Look for seasonal bargains in Germany called "Schnäppchen". Unlike the US where you have 70%-off sales at clothes stores all the time, in Germany retail stores will have winter and summer-type of sales and discounts.

l. Haggle down prices whereever and whenever you can - be shameless about it. Think "AIG executive bonuses" when you do it. The worst that can happen is that someone will say "no".

m. Trade books/videos/music/skills with other expats. Your DK France for my Rick Steve's Italy.

n. If you have kids, encourage them to do all of the above.