Swedes struggle with unforeseen expenses

Nearly one in four households, or 22 percent, would have difficulty dealing with an unforeseen expense of 5,000 kronor ($635), according to a study by Länsförsäkringar.

The study showed that 34 percent would struggle to cope with 10,000 kronor more in expenses, while 49 percent would have problems addressing an additional 20,000 kronor in expenses, the study, which was conducted among Swedes aged 25 to 65, revealed.

More men than women believe that they can cope with unforeseen expenses, regardless of the amount. In two-parent households, more than eight out of ten said they could cope with an unplanned one-off expense of 5,000 kronor. Among single parents, only 45 percent said they would cope with such an expense.

The financial situations varied between counties. In Halland, 26 percent of households said they could not sustain an extra expenditure of 10,000 kronor, while in Södermanland, 40 percent said they could not make the sum.

It is important to secure a buffer in a regular bank account of about two or three times one’s monthly net salary, said Ingela Gabrielsson, family economist at Nordea.

“It might take time to accumulate it, so one must get started with setting aside money every month,” said Gabrielsson. “Even if it is very little, one can put it aside. It’s better than nothing.”

She questioned how so many people can be so badly off despite low mortgage rates and tax cuts.

“Maybe these are long-standing holes to fill and so we happily consume,” said Gabrielsson, who believes that SMS loans and credit cards often act as a safety net when one’s car breaks down or one deals with a high dentist’s bill.

“It is easy for it to become a vicious circle that people cannot get out of,” she added. “People get trapped making new installments all the time and there is still not enough to get by.”

Even Finance Minister Anders Borg believes it is important for households to try to create a financial buffer.

In response to whether he believed it was concern that households have such tight financial margins, Borg responded, “Yes, one should always be careful and it is good for households to try to be frugal, especially when interest rates are so low – as they are gradually going to rise,”

He added, “I know that it is tough for people with small margins, but one should always try to have a small, small margin to have a sense of security.”

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Your January budget: Five ways to save money in Sweden this month

It's the start of the year and the end of the indulgence of the holiday season. Here's how to try to claw back some space in your wallet in Sweden.

Your January budget: Five ways to save money in Sweden this month

Take inventory of your bills

The start of the year is a good time to go through your regular bills and see if there’s a way you can save money there. Don’t forget to check your direct debit (autogiro) payments to see if you’re paying money for subscriptions you no longer use. Here are some more tips for reducing your regular bills.

Buy seasonal food

Seasonal produce is usually cheaper – and better for the environment.

Things to look for in Swedish grocery stores in January include: Green kale, Brussels sprouts (added bonus: they’re usually priced down after Christmas), turnips, carrots, swedes, red beets, red cabbage, white cabbage, artichokes, onions and apples. These are grown in Sweden and can be bought fresh this time of the year.

Aubergine, oranges and lemons, kiwi, spinach, broccoli, cauliflower and fennel are in season in other parts of Europe.

Get a cheaper deal on your electricity

Electricity prices soared to record levels in Sweden last year, and they’re expected to remain high in 2023 too.

Compare the prices of various electricity companies at price comparison sites, such as Elskling, and don’t be scared of calling your company to negotiate.

Swedish houses are generally well insulated, so in the shorter term, save money by turning your heating down just slightly, making sure your dishwasher and washing machine are full before turning them on, and having shorter showers. Here’s The Local’s guide to how to dress to keep warm in the Swedish winter.

The cost of electricity depends on your living situation. Electricity tends to be the most expensive in southern Sweden, and your bills are likely higher if you own a house rather than an apartment. If you’re staying in a sublet or an apartment housing association, it is possible that the cost is included in your monthly rent, or avgift, if you own your property.

Save money on your gym membership

Who hasn’t joined a gym the weeks after New Year’s Eve? The downside is they’re expensive, so the best way to save money is not to join a gym at all. Instead, look out for outdoor gyms (utegym – they look like a wooden playground) scattered across Swedish cities and free running and exercise groups in your area.

In January, you ask. Yes, in January. Even in the snow? Yes, then too.

Pavements are often kept clear of snow in Sweden and you will see people exercising come rain, snow or shine. Just remember to dress right (not too warm, but gloves and a hat are sensible) and invest in a good pair of ice studs for your running shoes – it’s a one-time cost that will pay off in the long run.

If you do want to go to the gym, it’s worth asking your job if they can pay for your membership as a friskvårdsbidrag (health contribution), a tax-exempt benefit that many employers offer in Sweden and means you can get money to put towards a sports activity of your choice (no more than 5,000 kronor per year).

Make the most of the end-of-year sales

The post-Christmas sale (mellandagsrean) might still be ongoing in some shops with prices dropping lower and lower. Have a think about what you need to buy for the year ahead in terms of things such as clothes, electronics or furniture, and then go online to see if you can find what you need at a reduced price. The key is to plan your purchase before you go shopping and not let yourself be tempted by things that seem great at the moment, but won’t be needed or wanted six months from now.

Off-season items are often the cheapest, so buy your summer clothes now, or even your winter boots for next year. Or better yet, don’t buy anything at all. Maybe it’s cheaper and more sustainable to fix things you’ve already got. There’s also a booming second-hand market in Sweden where you can grab a bargain.

Did you buy or receive Christmas presents that weren’t quite right? Know your right to return items. This guide by The Local explains the rules in Sweden.