How to reduce your living costs in France

First published: 10th September 2008 by FrenchEntrée 1

Though the strength of the euro against both the pound and the dollar has this year helped cushion the blow, the rise of the price of oil has still hit France as much as it has hit other countries.

This has meant a steep rise in the price of heating oil, petrol, diesel and many foodstuffs, in a nation where many products and services – electrical goods and tap water to name just two examples – are already quite expensive compared with countries such as Britain.

It’s true Le credit crunch may not have hit France as bad as some of the Anglo-Saxon countries, but the price of everyday commodities is most definitely now a major issue for the ordinary French consumer.

Everywhere you go in the country someone is complaining about the pouvoir d’achat (spending power) – or lack of it.

So in a bid to help our readers, FrenchEntrée has come up with a money saving guide:

SHOPPING

Shop online
In many specialist stores and shops, and especially in rural France, prices can be pretty high as there may be little or no competition from other stores (and there’s also not that much choice either). Online, however, there is always price competition, and so while it’s a shame not to support your local stores, if you want to save money on many items – from gardening equipment to clothes and electrical goods – then tap into the world wide web. Shopping online is also a great way in which to get your weekly food shopping because you can watch what you spend as you go along.

If you are not yet connected. See our article on doing so, PCs and the Internet in France

Supermarkets
Find out which day your favourite supermarket does ‘double points day’ and shop on that day. This way you can gain points to redeem on food.

Shop in cheaper supermarkets such as Aldi and Lidl. Both supermarkets have a great range of food and the price differences can be significant when compared with those of Carrefour and Leclerc.

Save VAT – buy from the UK
On many electrical goods you can buy items from the UK without having to pay the VAT. This only works however if you run a business in France and can supply the British supplier with a valid French VAT number. It’s particularly good for those items – such as computers and laptops – where for language reasons you might want to buy British anyway.

Second-hand stalls
France is full of second-hand good stores, market stores and car boots sales (vide greniers). Why, they’ve even adopted the ‘English’ word bric-à-brac! Yes, ok, you’ll find plenty of tat on offer but if you look carefully and have a little luck you’re sure to find some bargains.

Grow your own
Of course the best way to save your money on fruit and veg is to ape the French – and grow your own. You may not be able to match the immaculate vegetable gardens that punctuate the French countryside, towns and villages, but you can save a lot of money and have some fun turning a corner of your garden into a haven for carrots, tomatoes and aubergines.

PETROL

Buy your car fuel at the supermarkets
The cheapest place to buy petrol or diesel in France is nearly always at one of the big supermarkets. It’s not uncommon to see a petrol station selling diesel and petrol at around 10cents a litre more than a supermarket fuel station next door. And if you’re filling up with 50 litres or more, this can mean a potential saving of more than 5 euros. Also, avoid if you can having to fill up at motorway service stations – they’re usually very pricey.

IN THE GARDEN

If you haven’t already, get a compost bin and recycle your organic waste to make your own compost. Add some nettles to a vat of water to make your own highly effective (if a tad smelly) liquid fertiliser. Use water butts to save rainwater to help you water the garden – French tap water is very expensive. You can also use grass cuttings as a simple organic mulch – though make sure you water the soil first before you apply it. And grow more plants from seed or cuttings rather than buying them – this is not just cheaper but more satisfying too.

Visit our Gardening zone for a range of articles about gardening in France.

BILLS

Heating
Approximately 62% of our consumed energy is for lighting and heating.

The VERY BEST way you can reduce your heating bills is by fitting good insulation. There are many different types of insulation available now, so the good old itch inducing yellow fibreglass many may remember is not the only option.

Using a wood burning stove can significantly reduce the need for other forms of heating which has a direct effect on costs.

Water
French water is very expensive so being careful can save a considerable amount of money. Take a small bucket in the shower and run into it the cold water that flows prior to the hot water arriving, use it to water plants, wash vegetables etc. The average household could gain up to 5 litres per day that would otherwise be wasted and paid for on the meter.

Electricity
It may sound simple but you’d be surprised how many people leave electrical devices on when they are not in use. So don’t forget to turn off the TV, PC, Mobile phone charger etc. and save both money and electricity.

As opposed to a large gas oven, a small electric stove can be far more economical when heating meals.

Energy saving can be money saving
There are government financial incentives currently offered for and domestic renewable energy. If you are tax resident in France you can apply for a tax rebate (crédit d’impôts) worth 50% of total costs for the installation and materials, but doesn’t include the cost of labour. If you opt for a solar panel system that produces energy – pannaux solaire photovoltaïque – you can effectively feed into the EDF electricity board supply and be paid for it! This is of course a great way to not only cut your bills, but do your bit for the environment.

For more info on energy grants, try the ADEME, visit www.ademe.fr/anglais/vadefault.htm.

INSURANCE

Everybody wants to get the best deal on their insurance policies. However, it is often the case that the least expensive deal will prove to be a false economy.

Gordon Eaton of Agence Eaton gave us his recommendations: “Look closely at the cover and the excesses. Trying to judge the level of service you can expect is however difficult, having to rely on a French speaking call-centre, unless a fluent French speaker, will not be satisfactory, and will likely incur the cost of a translation service”.

He continued: “By grouping your policies together you can expect to obtain a better deal. On vehicle insurance, make certain your level of No-Claims bonus is correctly taken into account. Concerning medical insurance be sure you subscribe to the right plan for your circumstances. Ascertain if you are entitled to an E106 or E121 for example so you will need to budget for a ‘Top-Up’ policy rather than a private plan. Ensure your specific needs are understood so you subscribe to the policy you need and not the policy the salesman wishes to sell”.

Overall, you should choose an insurer that you can communicate with fluently, and who can issue the terms and conditions of your policy in English which will reduce dramatically the risk of misunderstanding – this could save you a fortune!

For furher advice contact Agence Eaton, www.french-insurance.com

French car insurance

Insuring your house in France

INVESTMENT

As an expat in France, it is important to plan for your future while also ensuring that you are able to take advantage of your non-UK resident status in respect of any UK taxes.

Review your pension funds. If you have a UK-based arrangement you may need to take action to avoid the currency exchange rate risk and secure local tax advantages. For more infomation on pensions see our articles on Retiring to France – what you need to consider and What can I do with my UK based pension fund when retiring to France?
If you have to pay Wealth Tax and are just over the limit, consider standard French measures to get under the limit. For further advice on wealth tax, read our article Wealth tax explained
If you have savings in sterling, you should at least convert some into euros as you will be spending in euros. For example if you are making regular mortgage payments, to avoid currency conversion losses why not take out a regular payment plan? Visit our currency zone and for further advice on currency issues.
Review your bank account. You should have an account that offers euro transactions and which is able to make and receive remittances in a variety of currencies without excess charges. Accounts to consider include Tax Free Savings accounts such as the Livret d’Epargne Populaire (LEP) which has great interest rates of over 4%. Getting a French account will make managing your money much easier, especially as interest from GB accounts will be taxed very highly.
For larger sums, investments in PEA (Plan d’Epargne par Action) are a good option because the added value becomes tax free after 5 years, as are French Assurance Vie options because the added value becomes tax free after 8 years.

For more info on investment, and for details on the above and other types of accounts on offer, see our articles on Saving and account options when living in France and Opening a French bank account.

FORUMS

The use of forums can be an excellent way to pick up a bargain i.e. stoves, building supplies, furniture, etc. It also allows you the opportunity to ask other expats about shops and suppliers.

The FrenchEntrée team