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MONEY

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.

Published: 9 January 2023 15:34 CET
Your January budget: Five ways to save money in Sweden this month
Knowing what vegetables are in season in Sweden could help you cut your food bill. Photo: Stina Stjernkvist/SvD/TT

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.

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MONEY

EXPLAINED: What is a Swedish ISK account?

Sweden’s government has proposed scrapping tax on ISK accounts with a balance of 300,000 kronor or less - but what are these accounts and how do they work?

Published: 15 April 2024 15:33 CEST
Updated: 20 April 2024 12:50 CEST
EXPLAINED: What is a Swedish ISK account?

What is an ISK?

ISKs, literally ‘investment savings accounts’ were introduced in 2012 as a way for people in Sweden to easily invest in shares and funds. An estimated 3.5 million people in Sweden have an ISK, with 75 percent of these accounts having a balance of 300,000 kronor or less.

How are they currently taxed?

They’re not subject to capital gains tax, but they are instead taxed at a fixed rate – known as schablonsskatt – an annual rate paid on the entire value of the sum held.

This differs from traditional AFs, where AF stands for aktie- och fondkonto or ‘share and fund account’, where any profits or losses on the sale of shares throughout the year must be declared individually in your yearly tax declaration.

If you have an ISK, you pay tax of 1.086 percent on your savings under current rules, which – to put it simply – means if you had 100,000 kronor invested you’d have a yearly ISK tax bill of 1,086 kronor, which you would pay whether your portfolio made a profit or not. Any figures needed for tax purposes are automatically added to your tax declaration by your bank, so there’s no need to do this yourself.

There’s a third type of investing savings account – a kapitalförsäkring or KF, which is an insurance product where shares, funds and other savings are held in your name by a bank or insurance company. A KF differs slightly from an ISK, but they are subject to the same amount of tax (although you might need to pay tax on a KF each quarter rather than each year). 

As a general rule, it makes financial sense to invest through an ISK or KF rather than another type of investment-based savings account if your yearly returns exceed the government loan rate – statslåneräntan – plus one percentage point. The government loan rate was raised to 2.62 percent at the end of 2023, meaning you should aim for your ISK or KF to have an average return of at least 3.62 percent.

In an AF, you pay 30 percent tax on any profit you make through sold shares in a tax year. If you make a loss, you pay nothing at all.

How do I open one?

Most consumer banks in Sweden, like Swedbank, SEB and Handelsbanken, offer ISKs and KFs, as well as specialist stockbrokers like Avanza or Nordnet, which are often significantly cheaper. 

It’s somewhat less convenient to have your savings in a separate place to your bank account, but this can also be a good thing if you’re the kind of person who is tempted to sell your shares or funds at the slightest sign of a downturn.

It’s relatively easy to set up an automatic investment each month from your salary account to an ISK, even if these are in different banks.

You can often open an ISK in minutes via mobile banking on your phone, although it’s a good idea to do your research first and compare fees between providers before you open one – small differences in fees can make a huge difference if you’ll be saving over an entire lifetime.

Having said that, it’s a good idea to be aware of specific rules in your home country, especially if you are still eligible to pay tax there.

In the US, for example, ISKs are very difficult to report to tax authorities, and you may be penalised for owning mutual funds over a certain amount – which is common both in ISKs and KFs.

How would the new proposal change things?

Under a new proposal, which has been co-authored by the government and the Sweden Democrats, tax on ISKs and KFs would be scrapped for any accounts where savings are less than 300,000 kronor. Currently, an ISK with 300,000 kronor saved would cost 3,258 kronor in tax in a calendar year, so it’s a sizeable saving for those with a balance above this amount.

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