How can you save money as a student in the Netherlands? The Netherlands is a great place to live and study, but it can get quite expensive for a student. That's why it's important to save money and manage your personal finances effectively. When I came in 2015 to the Netherlands, my monthly expenses were higher compared to now because I didn't know much about managing money. After living here for five years and doing research about saving and managing money, I discovered 8 ways how you can save money as a student. Let's take a look:
1. Define your monthly expenses
Tracking your spending is the first step to save money long-term. When you define your monthly expenses, you will get a better overview of where your money is going, and there will be always room for improvements in your budget. Your monthly expenses can range anywhere between €800 to €1.300 euros a month depending on your lifestyle, and location (for example, Amsterdam is relatively more expensive than Tilburg). If you want to consistently save money, you have to know how much you're spending each month. The most common monthly expenses for a student are:
- Rent with utilities
- University tuition fee
- Healthcare insurance
- School supplies
- Leisure (gym membership, Spotify, Netflix, takeout, etc.)
- Mobile subscription
You can reduce some of these expenses like groceries, transportation, clothing, leisure, and mobile subscription to save money each month. For example, try to do groceries at more affordable supermarkets like Lidl and Aldi instead of Albert Heijn or use the app 'Alle Folders en aanbiedingen' to see where there are good grocery deals. Try to ride your bicycle more instead of taking the bus. All these small changes in your budget can lead to big savings over time. The next way to save money is creating a solid student budget.
2. Create a solid student budget
Creating a student budget lets you stay on track of your spending. If you know how much you usually spend each month you can create a budget to minimize unnecessary spending and save more money each month. Put every income and expenses you have to have a clearer view of your finances.
3. Create an emergency fund
It's essential to have an emergency fund as a student. You never know what emergencies come your way, so it's better to be financially prepared. The rule of thumb is to save between three to six times worth of your monthly expenses for emergencies. For example, if your monthly expenses are €1.000 euros, you need to save between €3.000 to €6.000 euros for emergencies. This way you have more peace of mind and less financial stress.
4. Apply for tax benefits and allowances (if you are eligible)
If you are studying in the Netherlands, you could get government allowances to help you pay your rent and health insurance. You first have to check if you are eligible to get these government allowances. For more information visit the tax authority website www.belastingdienst.nl. There are a two tax benefits you can get if you are eligible for them. These are:
- Healthcare allowance
- Rent allowance
If you are eligible for both they can tremendously reduce your monthly expenses. For example, if you are over 23 and your monthly rent is €700 euros (plus 12 euros service charge) you could get €360 euros rent allowance from the government (visit the calculation tool website here). Healthcare allowance is possible only of you study and work in the Netherlands, which is an additional €107 euros a month (in 2021). Just make sure you are eligible first before applying to avoid fines.
5. Apply for tax remissions for municipal taxes (if you are eligible)
As a student, you usually don't have a high income or net worth, and therefore, you can get tax remissions (kwijtschelding in Dutch) for municipal taxes. The government helps people who are struggling to pay municipal taxes by allowing them to get tax remissions (if they are eligible). Municipal taxes are:
- Water system tax
- Water treatment tax
- Sewage charge
- Waste charge
These taxes are usually a couple of hundred euros annually. By applying for tax remissions for these municipal taxes, you could save each year a couple of hundred euros.
6. File a tax return
If you work part-time in the Netherlands, you could get tax returns from the tax authority. If you are employed at a company, sometimes too much tax may be withheld from your wages. You can reclaim this tax annually by filing a tax return.
7. Reduce your monthly subscription fees
Monthly subscriptions are very common nowadays. Luckily, there is a way you could reduce your monthly subscriptions like Spotify, Netflix, Basic-Fit, Disney Plus, Apple Music, Google Play Music, etc. By using a group subscription and splitting the bill, you can reduce your monthly subscription fee up to 75%! This will help save a couple of hundred euros annually.
8. Create a frugal lifestyle
A frugal lifestyle can really help you save money. Most millionaires and billionaires have frugal habits. By prioritizing your spending, budgeting, and planning, you will accumulate more money overtime until you reach a limit of savings. A few simple frugal habits are:
- Live within your means
- Buy in bulk
- Buy second-hand
- Budgeting and planning
By applying all eight ways how to save money, you could reduce your monthly expenses up to €500 euros a month. Everything you need to know about saving and managing money as a student is written in the book 'Living Rich as a Student in the Netherlands; From Broke to a Frugal Lifestyle'.