Why does it seem like you still feel poor compared to others? This happens no matter how hard you try to be financially responsible. Reusing shopping bags or cutting down on snacks helps a bit, but it won’t significantly change your finances. The real issue is ignoring those bigger habits and expenses that drain your money while others keep getting rich. The truth is, you’re working hard, but there are financial traps holding you back. Let’s talk about seven things that might be keeping you poor in Germany. These are the issues that make the difference between just getting by and building real wealth.
First up, insurance. Germany is the land of insurance—personal liability, legal insurance, and even coverage for getting stuck in an elevator (yes, seriously, for just €12 a year!). The average German has about six insurance policies, which seems normal but can really add up. It’s worth checking which insurances you have and whether they’re necessary. Some insurances, like personal liability, are crucial because they protect you from financial ruin. But do you really need travel luggage insurance or phone insurance? List all your mandatory and optional insurances and figure out which ones you can cancel. For instance, do you need full car insurance, or could you switch to partial coverage? Also, comparing insurance options can save you money. I once switched my private liability insurance to a provider with better coverage for half the price. Bundling your insurances with a single provider might also help.
Next, car payments. Owning a car seems necessary, but it’s a huge financial drain. The average car payment in Germany is around €310, which can really add up over time. Consider how much you could save if you invested that money instead. Cars also come with hidden costs like fuel, repairs, and parking, which strain your budget further. Financing a car means additional interest payments, making it more expensive in the long run. One strategy is to save up and buy a reliable used car for cash. For example, my first car cost €4,000, and I kept it for over two years without the burden of monthly payments. This way, you can invest the money you’d otherwise spend on car payments.
Spending is another big issue. When people get a raise, they often fall into the trap of lifestyle inflation, spending more as their income goes up. I’ve been there myself. When I started my career in Germany, I was super frugal. But as I made more money, I felt the urge to spend more. Spending more never made me happier, and this is why even people earning over €100,000 a year can still feel poor. They buy new cars, bigger houses, and unnecessary things. It’s important to resist the urge to spend more just because you’re earning more.