Multi-currency personal budget: how to manage your income and expenditure abroad
- #1 Prioritise digital banks and financial services
- #2 Check the amount paid under the cross-border worker’s health insurance scheme
- #3 Changing your mortgage insurance
- #4 Renegotiating your mortgage
- #5 Exchanging currency online
- #6 Have your salary paid directly into your b-sharpe account
- Bonus: How to avoid being wrongly taxed by the French tax authorities
With the digitalisation and globalisation of our economies, more and more people find themselves receiving income in a currency other than their domestic currency or spending a significant proportion of their money in one or more foreign currencies.
- #1 Prioritise digital banks and financial services
- #2 Check the amount paid under the cross-border worker’s health insurance scheme
- #3 Changing your mortgage insurance
- #4 Renegotiating your mortgage
- #5 Exchanging currency online
- #6 Have your salary paid directly into your b-sharpe account
- Bonus: How to avoid being wrongly taxed by the French tax authorities
However, whilst managing your personal finances is a challenge in itself, managing a multi-currency budget can be even more complex!
Managing multiple accounts, currency conversion, exchange rate risk, tax implications… There are many factors to consider when it comes to optimising the management of a personal budget abroad. Here are our six tips for solving this puzzle.
#1 Prioritise digital banks and financial services
Traditional banks may charge unnecessary fees for their international services and foreign exchange transactions, sometimes applying a substantial mark-up. As a result, a digital bank (or a neobank) will offer a streamlined fee structure, whilst providing greater accessibility and responsiveness to your requests.
By choosing a digital bank such as Fortuneo, Hello bank, ING Direct or N26, you can eliminate monthly account maintenance fees entirely. A significant number of our customers now operate in this way, and euro transfers between the online currency exchange service b-sharpe and these banks are quick, seamless and free of charge.
#2 Check the amount paid under the cross-border worker’s health insurance scheme
A large proportion of cross-border workers are covered by the French health insurance scheme, also known as “CMU for cross-border workers”, which is administered by the National Centre for Swiss Cross-Border Workers (CNTFS).
Under this system, insurance premiums are calculated on the basis of taxable income. To this end, each cross-border worker must declare their income to the CNTFS using a specific form. However, it is often in this declaration that mistakes are made!
Fortunately, it is possible to go back several years and submit a request for a correction in order to be reimbursed for part of the cross-border CMU.
#3 Changing your mortgage insurance
Interest rates are so low at the moment that French banks offering mortgages (in CHF or EUR) are focusing their attention on mortgage insurance.
Since 2018, French law has allowed customers who have taken out mortgage insurance to switch providers after one year. Whilst in practice, switching mortgage insurance isn’t always that straightforward, it is an option worth considering as it can, in some cases, significantly reduce your monthly payments.
#4 Renegotiating your mortgage
Interest rates in most European countries remain particularly low.
Now might be the time to renegotiate your mortgage, with two options available:
- reduce the amount of your monthly payment;
- shorten the term of your mortgage.
For foreign currency loans, a number of criteria must be met.
In particular, the redemption value in euros will be compared with the purchase price of the property. The redemption value is the outstanding principal (which you will find in your repayment schedule) converted into euros using the bank’s EUR/CHF exchange rate at the time the calculation is made. If the redemption value is higher than the property’s original value, the bank will generally refuse to redeem the loan.
Good to know: b-sharpe supports you in managing your foreign currency loan to help you secure financing on the best possible terms!
#5 Exchanging currency online
Not all currency exchange providers (banks, bureaux de change, online services, etc.) offer the same rates. Do your research and compare the different options available to you!
If you’d like to find out more about the b-sharpe online currency exchange service, we offer a completely secure solution with no subscription or commitment, suitable for all situations.
On average, compared with a traditional bank, a b-sharpe customer saves €600 over a year when exchanging CHF 5,000 each month.
#6 Have your salary paid directly into your b-sharpe account
In Switzerland, there are very few online banks that offer free accounts, unlike, for example, some online banks in France or Germany.
Some individuals who work in Switzerland but live outside the country and want to keep their bank charges to a minimum have found a solution: they use b-sharpe’s CHF IBAN instead of their bank’s.
When you provide your IBAN to your employer, they will pay your salary directly into your b-sharpe CHF account. Once we receive the payment, we convert the full amount of your salary and transfer it to your EUR account. Not only do you save on currency conversion fees, but you also no longer have to pay monthly fees to your bank.
Bonus: How to avoid being wrongly taxed by the French tax authorities
The introduction of withholding tax in France has clearly encountered a few teething problems, particularly for cross-border workers. Indeed, some cross-border workers in the canton of Geneva who have no income from French sources have found that France has deducted withholding tax from their earnings. A phone call or message to your tax office should resolve the situation quickly.
By following these tips, you’re sure to cut your costs. Do you have any other ideas for managing your personal finances more effectively? If so, please do share them!
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