Europeans prioritize daily spending and saving in 2024
We surveyed 6,300 Europeans across five countries about their approach to finances.
8 min read
For many of us, planning for the future takes a backseat to managing our daily expenses. After all, there are bills to pay, groceries to buy, travel to book, and meals out to splurge on when the mood strikes. Financial planning is partly a question of discipline. Yet these days, the cards are arguably stacked against those trying to save for the future — especially in Europe. Over the last few years, Europeans have been contending with some tough financial realities, from rising costs of living to slowing wage growth. These circumstances have made household budgets especially tight — so tight, in fact, that rates of investing have dropped across the continent.The numbers are one thing, but how does this economic reality translate to real people’s wallets? To find out more about how Europeans are managing their money in 2024, we asked 6,300 people from France, Italy, Spain, Germany, and Austria* to share insights about their budgets, habits, and feelings regarding their finances. Our findings speak volumes about how Europeans in these countries are dealing with money today.
Higher cost of living leaves less room for investing
There’s no denying it: Many Europeans are spending most of their monthly budget on their daily needs — and by a significant margin. In our survey, we asked respondents to rank spending across five categories, from the highest to the lowest portion of their monthly budget. From rent to bills to transportation and groceries, 80% of total respondents ranked day-to-day expenses as their highest priority. Notably, the figure was highest among Spaniards (85%) and Italians (84%) and was lowest among Germans (73%). These figures may come as no surprise. Across Europe, rent, energy, and grocery prices have been soaring while salaries haven't kept pace. As we noted in our 2023 European Livability Index, 98% of Europeans said last year that they were worried about the cost of living. In second place is leisure and discretionary spending — think: trips, meals out, etc. This is likely linked to inflation in the EU, as people are spending more money on both basics and non-essentials alike. And yet, just as Europeans report higher spending, they’re saving at high rates, too. Roughly 3 out of 5 respondents said saving was a significant part of their budget — whether simply setting money aside or using interest-bearing savings products. This trend was most pronounced in Italy (63%) and Spain (61%). For many Europeans in the five countries represented here, while saving is a high priority, investing is not. In fact, this category ranked the lowest across countries, and just roughly 1 in 5 of Spanish and French respondents categorized investing as a significant part of their monthly budget. Meanwhile, a quarter of respondents from Germany and Austria reported the same — making them the highest investors across the countries we surveyed.For Italian, Spanish, and French respondents, paying off debt ranked higher on the list of priorities. In Austria and Germany, by contrast, only 38% and 36% of respondents (respectively) said that debt took up a large share of their monthly budget.
Confidence, knowledge, stress, and satisfaction
Despite the challenges of balancing a budget, respondents to our survey are staying positive. Overall, 64% say they’re confident they can manage their finances well. Nearly three-quarters of Austrians say they’re confident in managing their finances, a figure that dips to just under 50% among Italians. At the same time, a number of people say they’re missing the know-how to confidently manage their money. When asked, just over half (56%) of survey respondents say they feel knowledgeable enough to manage their money. It’s worth noting that respondents from countries where the knowledge gap was higher also reported a greater desire to learn about financial topics. Indeed, 3 out of 5 respondents in both Spain and Italy say they want to gain more financial knowledge — presenting a great case for financial education initiatives in the public and private sector. There also seems to be a connection between self-reported knowledge and rates of investing. As we saw above, rates of investing are higher in Germany and Austria — the same countries where respondents expressed more confidence and knowledge in their money-management skills. This suggests that the more educated people are about their finances, the more likely they are to invest and grow their wealth over the long term. Economics could be playing a hidden role here, as well. Comparatively higher levels of confidence, knowledge, and financial satisfaction in Germany and Austria could be linked to higher average salaries than those in France, Spain, and Italy. It makes sense that the more financially secure you are, the more confidence — and capital — you’ll have to take measured financial risks.
Living for the moment vs. building for the future
Day-to-day expenses and financial knowledge aside, our data also uncovered differences in habits and behaviors across countries. In great news for piggy banks across Europe, one of the main habits recorded in the countries surveyed was saving. 41% of those surveyed said they set money aside monthly. In addition to general saving, roughly one-third of total respondents set money aside for emergencies, or for larger purchases. An equal amount across countries said they regularly monitored their finances, especially in Austria, Germany, and Spain, where the numbers are around half. That drops to one-third of Italians, and less than a quarter of French respondents. But although they might not be monitoring their money as closely as others, at 44%, the biggest savers were in France.All this data seems to point to a population concerned about their financial livelihood in the here and now. But in terms of planning for the future, the numbers don’t look quite as rosy. While 1 in 5 people surveyed said they stay up to date on ways to grow their wealth, they don’t spend much time or capital planning for the long term. Just 16% of total respondents say they proactively set financial targets, and an almost equal number of respondents (15%) say they have a plan to achieve their financial goals. An even lower rate (12% of total respondents) had a plan for retirement — these numbers were highest among Spaniards at 15%. Rates of investing are also low, with just 14% of those surveyed stating that they have an investment portfolio. These rates were highest in Austria and Germany (each at 16%) and lowest in France at 9%. When we compare the numbers on financial priorities, confidence, and knowledge, it’s notable that investing and retirement planning trends are linked to a strong sense of financial security.
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Strengthening Europeans’ long-term financial planning, one step at a time
So, what do our findings reveal about the financial situation for Europeans today? On the whole, it’s clear that immediate and short-term financial objectives trump long-term planning across the five countries surveyed. Priorities like day-to-day spending, paying off debt, and saving are taking up the largest part of Europeans’ budgets. Given the financial landscape of the past several years, this isn't surprising. High inflation, rising interest rates, skyrocketing energy, rental and home prices, and an unstable job market have left many Europeans struggling to get by. This likely means that a larger portion of their monthly income goes to meeting more immediate needs rather than planning for the future. And yet, long-term savings plans like investing are a vital part of any healthy financial plan. Historically, investing has proved to be a powerful tool to protect against inflation and fluctuating interest rates. It’s also a great way to grow your wealth, especially when it comes to retirement planning. While there’s no quick fix for rising costs and market upheaval, there are incremental steps each of us can take to strengthen our long-term financial future. Educating yourself about investing is a great first step. There are plentiful articles and resources available online to help educate those looking for support on getting started. Lastly, it’s never too late to start investing, and no amount is too small to get started. These days, there are plenty of digital investing options that allow you to go at your own pace and match your investments to your personal circumstances. No matter what economic moment we find ourselves in, focusing on the future pays dividends over the long term. *The survey was carried out by the research institute YouGov for N26 using YouGov proprietary panels with representative samples of the national populations of Germany, Austria, France, Spain, and Italy using the quota method, involving more than 6,300 respondents.
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