Planning to move or recently moved to France? Like any other country, you have to understand the local specificities to avoid making costly mistakes and losing money.
We will explain to you in this blog, based on our own experience, what you should look up when living in France. From simple practical day life mistakes, to strategic portfolio management. Let’s start…
Table of Contents
Common scams
Calling a leaflet plumber number
A few days later we had a little water leak in our toilet tank. It was early Monday and we did not want to deal with this problem. So we decided to call the ‘Plombier’ indicated in the leaflet (thinking it was a kind of call center) and then send the invoice to the landlord.
After 30m, there is this Plumber arriving by motorbike. Fortunately I asked for a quotation before he started working. The guy was ready to jump in and replace the little defective piece. So he provides a quotation of 700€ for just changing a plastic piece on the toilet water tank!!!
Obviously I refused it, but he started complaining and was willing to charge me 100€ for just the quotation. I had to insist on calling the Police if he did not leave. Finally, he went away.
When reaching the office, I shared the bad monday experience with some colleagues and they confirmed it is a common scam in Paris.
Yes, emergency services like Locksmith, and Plumbers are normally expensive but it should not be this much. The right way to proceed will be calling your Home insurance company ‘Assurance d’Habitation’ and they will provide details about what to do and who to call.
There are some other alternatives through web sites like Travaux.com; renovationman.com, or EDF subsidiary IZI, among others.
Street casino games
Another common scam is the street casino. There will be one guy switching cups on a table and making it look simple to guess. They will even let you win a couple of times just to encourage you to raise your bet. Once you are feeling smart and bet 500€ or more, then obviously you will lose.
Finally, you have some young people in the street pretending to be deaf and asking you to sign up a paper to support their cause. The problem is that there will be another one behind you stealing your wallet.
Your training budget CFP ‘Compte de Formation Personnel‘
You accumulate a training budget while you work from France. It is managed by the government as it is independent from your employer.
However, it has attracted many scammers that will contact people by phone / Email trying to sell fake training or to get the account credentials. So you should never give your password to anyone by any channel, even if they try to put pressure on you (sense of urgency). You should book your trainings directly from the CFP account.
Common financial mistakes
Trusting 100% your bank agent financial advice
A bank financial advisor will try to sell you first their own financial products, which normally are not the best performers in the market and include high fees. It is not a scam and it is perfectly legal, but certainly you could better invest your hard-earned money.
For example, try to avoid opening unnecessary bank accounts, or fancy credit cards. Specially, double check fees when subscribing to a mutual fund, or any investment vehicle within your broker account, PEA or Assurance Vie. There could be entry fees, maintenance fees, transfer fees, etc.
Even though past performance does not imply future performance, we always check this for any investment being proposed by our bank advisor. Especially if it is a financial product like an ‘active managed’ fund which is meant to outperform an index. Has it really done better than its referential index? Check out our blog about ETF for an alternative investment option.
Finally, when asking for a mortgage or credit, check the TAEG (Taux Annuel Effectif Global) which (by E.U. regulation) as it should include all fees, interest so you can see the real cost of a credit.
Not investing in your company savings plan
We have to start saying that not all company savings plans are worth it. It depends on each company and the funds, conditions they propose. So you have to check first this by yourself.
However, most expats and foreigners working in France do not understand what is the ‘Intéressement et Participation’ and the investment opportunity they have. We invite you to read our blog about it and consider this option because most of the time it represents a huge investment potential for an employee.
Buying real estate without doing your ‘maths’
Some people believe that owning their home is the best option as they are not throwing away their money paying a rent. Or maybe because they like the feeling of owning where they live.
Buying or renting? This decision should not be made without doing the right math. Especially in France there are heavy fees and unexpected costs when buying a property.
On the other hand, renting for a long period of time could be a mistake as well. You will miss the ‘leverage effect’ of credit and you will end up owning nothing.
Learn more in our blog about investing in real estate in France.
Keeping your money sleeping in your current account
To avoid falling into this mistake, we share some ideas about how to invest when living in France in our blog.
Not checking carefully the ‘état de lieux’ when renting
It may be wise to mark down all your findings and details about the property. Check all equipment (laundry machine, kitchen,…), painting, any floor scratch, etc. Make sure everything is written down and you give back the property as you received it.
If you check out and leave behind some scratch on the wall, you may believe that the landlord will deduct just a few dozen euros to fix it. So you conveniently pack your stuff and leave. But some landlords may abuse and charge you fees like if Leonardo Da Vinci was doing the painting. They will find excuses to retain your deposit amount (all or partially).
In this case, it could be wise to do it by yourself before leaving and not letting any open door behind.
Underestimating taxes
Most newcomers (depending on your home country) are shocked when they see their pay slip the first month and notice the big gap between Gross and Net salary. It is true that it is not only about taxes, but also social security and other charges.
As a high level estimation (calculation depends on many variables), you can expect around 60% as your net salary.
Another classic tax mistake is believing that all taxes are withheld by the government in advance. Then, some additional taxes will pop up along the year, like the ‘Tax Foncière’ in case you are a homeowner, or with capital gains / interest and paying the Social Contribution tax.
Check out our article about taxes in France to deep dive a bit more.
Conclusion and final thoughts
We hope that this blog will help you saving some money and the anger that comes with it. Of course, this list is not exhaustive we will keep adding some more as we discover it.
If you have another mistake to avoid that we should add, please let us know in the comment below.
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Please remember that we are not financial advisors. We are just sharing our best understanding based in our own experience. This blog is for educational purposes only. Do not make investment decisions solely based on what you read in this blog. What works for us, may not for you. Do your own research and look for professional service if required. Read our full disclaimer in the ‘about’ page.
Thank you for the great content, team!
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