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Creating a Financial Plan: Essential Tips for Filipinos in Italy

21 May 2024


Do you want to send money to Philippines from Italy but want to achieve financial security as well? Many expats living in Italy do not understand Italy's complete financial landscape, making it harder for them. Understanding the economic landscape of Italy and then creating strong financial objectives will help you save money. This blog will allow you go through the necessary steps to reduce expenses while living in Italy. 

Establishing Financial Objectives in Italy

Creating financial objectives is essential for maintaining a solid economic foundation in the long run. If you are a Filipino expat in Italy, create multiple goals to help you invest your money in the greater good. 

Short-Term Financial Goals (1-2 Years)

Short-term financial goals usually involve establishing a safety net for unexpected expenses. It also involves effectively handling debts, such as credit card balances or loans. If you open a high-yield savings account in Italy, your emergency funds will grow. 

Mid-Term Financial Goals (3-5 Years)

Mid-term goals often revolve around saving for essential expenses such as buying a car or paying a home down. You can also aim to enhance your career prospects by pursuing additional education or training.

Long-Term Financial Goals (5+ Years)

When securing your financial future, it's essential to consider long-term goals like retirement planning and saving for your child's education. Try to find different ways to contribute to Philippine retirement funds while working in Italy.

Creating a Financial Plan and Monitoring Expenses

It is important for you to develop a budget and keep your focus on the expenses. This is essential for effective financial management. Here are some usual costs and tips on managing your budget for them. 

Expenses for Filipinos Living in Italy

Living in Italy comes with various expenses that Filipinos need to manage. It includes rent, utilities, groceries, and transportation. Money transfer from Italy to Philippines is also an excellent expense for expats. Discovering strategies like organizing meals in advance, relying on public transit, or using good money transfer services can help you cut costs.  

Different Budgeting Tools and Techniques

Budgeting tools such as apps or spreadsheets can significantly enhance your ability to manage your finances. Have a look at different methods such as the 50/30/20 rule. The 50/30/20 rule offers a systematic budgeting approach as it divides income into needs, wants, and savings/debt categories. 

Effective Strategies for Saving and Investing

Understanding the importance of saving and investing is crucial for anyone looking to build wealth and reach their financial objectives. Make sure you explore multiple saving accounts and investment opportunities in Italy for Filipinos: 

Savings Accounts and Options in Italy

You should look into different saving options, such as high-yield savings accounts or certificates of deposit (CDs). Ensure you understand different features and benefits of various accounts, as it will help you make well-informed decisions. Use their saving strategies for saving money.

Investment Opportunities in Italy for Filipinos

Filipinos can consider different investment options, such as mutual funds or ETFs, that provide exposure to Philippine or Asian markets. In addition, when investing in properties in the Philippines, you should carefully consider the legal and tax implications.

Understanding Your Financial Landscape in Italy

Living in Italy as a Filipino brings a set of financial problems. Managing your expenses while taking out the money to make an online money transfer from Italy to Philippines takes a toll on your mental health. Continue reading to find out the cost of living in Italy:

Cost of Living in Italy

Living expenses in Italy are higher than in the Philippines. Before living in Italy, you should have a good understanding of the different expenses you'll encounter.

  • In Italy, the average net salary per month is approximately €1,572.
  • The housing expenses are approximately €988, while the utilities are around €198. 
  • The cost of groceries in Italy is approximately €300, but it is reasonable to assume that processed foods would be priced higher. 
  • The internet and a monthly public transport pass cost approximately €27.60 and €35, respectively. 
  • If you're interested in becoming a fitness club member, there is a fee of approximately €47.74. 
  • The overall average cost of the expenses amounts to approximately €1,596.34, which unfortunately exceeds the average salary. 

Tax System in Italy for Foreign Employees

The Italian tax system applies to foreign workers, including Filipinos. If you are living in Italy, then it is essential to understand the various types of taxes and your tax filing obligations. The main taxation types are mentioned below:

Income Tax on Your Earnings 

This tax is imposed on your annual earnings in Italy. The tax rate is progressive, gradually increasing as your income increases. As a Filipino worker, you may qualify for tax deductions and benefits based on your circumstances.

Contributions to Social Security

Social security contributions are essential for both the employee and the employer. These required contributions help support critical public benefits such as pensions and healthcare. 

Italian Value-Added Tax (VAT)

Italian VAT applies to goods and services by individuals engaged in business, professions, or art and to imports. VAT does not apply to intra-community supplies and exports. 

Understanding Currency Exchange Rates

When you budget for international money transfers to the Philippines from Italy, you should understand currency exchange rates well. By considering exchange rates in your budgeting, you can maximize the amount you send to support your loved ones in the Philippines.

ACE Money Transfer’s Role 

If you want to send money to the Philippines, use ACE Money Transfer. ACE Money Transfer distinguishes itself by providing the best exchange rates. ACE offers services without fees, unlike traditional banks and other money transfer services.
 

ACE Money Transfer ensures a quick and secure delivery. Its transparent fee structures and never-ending commitment to meeting customer demands make it one of the best. 

Financial Security for Filipinos in Italy

Living in Italy can be both exciting and scary. However, with proper planning, you can attain financial stability. Develop a thorough budget that considers the expenses of living in Italy. Stay up-to-date on the latest Italian tax regulations and social security contributions for foreign workers. To have the best experience, make sure to send money online to Philippines from Italy with ACE Money Transfer. 

FAQs

What makes financial planning crucial for Filipinos living in Italy?

Financial planning is necessary for Filipinos living in Italy to achieve their financial goals. It helps expats to manage their income effectively, save for the future, and establish financial security.
 

What are some of the financial challenges that Filipinos living in Italy encounter?

Some challenges to consider are dealing with currency fluctuations, adapting to a new tax system, finding efficient ways to send money back home, and planning for retirement in multiple countries.
 

What advantages can be gained from creating a financial plan?

A solid financial plan can reduce stress significantly and empower you to make well-informed financial choices. It ultimately helps you achieve your desired goals. By implementing a thoughtful financial plan, you can lay the foundation for a more secure future.
 

What strategies can help Filipinos in Italy manage the higher living expenses and save money effectively?

Budgeting, meal planning, utilising public transit, and exploring efficient money transfer services can aid Filipino expats in managing living expenses and saving money effectively in Italy.
 

How can Filipinos in Italy navigate the Italian tax system and optimize their financial contributions for long-term security?

Filipinos in Italy can navigate the Italian tax system by staying informed about income tax, social security contributions, and VAT. Seeking professional advice and contributing to both Italian and Philippine retirement funds can also optimise their long-term financial security.
 

Reference 

https://cfo.gov.ph/filipino-migration-in-italy-overview/ 

https://housinganywhere.com/Italy/cost-of-living

https://taxsummaries.pwc.com/italy/individual/other-taxes 


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