Three things to think about if you want to improve your personal finances in Norway

Kroner - euro - dollarPhoto: Jon Olav Nesvold / NTB
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This year’s state budget opens up some questions for people living in Norway: What to do about savings? Should you rent or own? Do you have the opportunity to receive benefits from your employer?

The proposals that appear in the state budget are largely related to one’s life situation. There could be things that one can’t change or influence overnight, consumer economist Silje Sandmæl in DNB told news bureau NTB.

Nevertheless, Sandmæl provided some general advice to people on improving personal finances should the minority government get approval for its budget proposal in the Norwegian parliament (Storting).

Regardless of this year’s budget, several economists’ advice is to save up a buffer if one has the opportunity to do so.

What to do with savings

In the state budget, the government proposes tightening the BSU scheme, so that those who already own housing will no longer receive a tax deduction through the BSU scheme.

“If you are under 34 years of age and save in BSU at the same time as you own a home, you should consider moving your savings elsewhere from next year. 

“BSU still has a good interest rate compared to a regular savings account, but there are good chances that the money will pay off more in an equity fund than in a high-interest account,” Sandmæl said.

For young people who have not bought a home yet, BSU is still favorable, as the government will increase the annual savings amount.

“This also gives up to NOK 500 extra back on the tax. It is important to start saving as early as possible,” Sandmæl pointed out.

Consumer economist Cecilie Tvetenstrand at Danske Bank added that it would be wise to consider putting some of the money in the stock market – even if people have money in a normal savings account.

The government has proposed a reduced wealth tax on investments in shares and funds.

“It is also proposed that parents with children under the age of seven receive increased child benefits. 

“If they have room in their personal finances to set aside a part of the money, that can be a good opportunity to start saving for the children,” Sandmæl said.

Own or rent?

Does it pay to own a cabin and own a car?

“If you are considering buying a cabin, as many people do, its tax value is now most likely to increase – you have to take that into account. 

“Remember to include all costs in your assessment. 

“If you still end up buying a cabin or if you already have one, it can be nice to remember that it is possible to rent tax-free with up to NOK 10,000 a year,” Tvetenstrand explained.

When it comes to cars, things can also get expensive.

“It will be more expensive to drive a car in general. 

“If you have the opportunity, it may be time to use a bicycle or public transport in everyday life. 

“It will be good for the wallet and the environment,” Tvetenstrand said, adding that now that electric car owners have to pay NOK 2,135 in annual fees, it may be a good time to buy one.

More to pick up at work

The government’s policy aims to get young people into the labor market and increase the exemption card limit for what people can earn before paying taxes.

If you have lost your part-time student job due to corona measures, try to think ahead and offer your services. 

Maybe you can be a private tutor for younger students, help out with snow removal, childcare, or other services at home with private individuals or at their holiday home. 

You can also earn NOK 6,000 tax-free per assignment. 

Many campuses now also offer online tuition. 

Maybe it’s possible to live at home and commute if there are only a few compulsory attendance hours during a semester, Tvetenstrand noted.

If you have a permanent job, you should check what you can get there.

“You can get a free vaccine from your employer. If you are in a risk group and need a flu vaccine or other vaccines, check with the employer if they want to offer it,” the economist concluded.

© NTB Scanpix / #Norway Today

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