Many people have sky-high housing costs. According to ING research, young people pay an average of 1,185 euros in housing costs for a private rental property. How do you live comfortably when such a large chunk goes to your housing costs?
If about 20 to a maximum of 30 percent of your gross income goes to your housing costs, you should still be able to live comfortably. That means driving a car, going on vacation occasionally, saving, and grocery shopping. That is the starting point of the Nibud. But in practice, it can be very difficult to achieve this ratio. In large cities, rents are sometimes sky-high, and the average mortgage sum for the purchase of a home is now 476,000 euros.
Being happy that you at least have a home, even if you can’t afford it? That can cause a lot of financial stress. The rule of thumb is that if your total fixed costs are close to 60 percent, you are structurally too tight,” says Jasja Bos of the Nibud. “But the choice in homes is limited. There is no massive shift going on to the countryside, and as a starter, you want to live in or close to the city.”
And so, many people pay a fortune in rent or borrow to the maximum. The abolition of the jubelton – a scheme whereby parents could donate money to their children tax-free – contributes to our borrowing behavior, according to the Land Registry. Bos: “Even if you are allowed to borrow the maximum from the mortgage lender, it is not always comfortable. It means you have to budget.”
92 percent of purchase price with mortgage
Starters in the owner-occupied housing market financed approximately 92 percent of the purchase price for their home with a mortgage last year, says the Land Registry. The average mortgage sum for the purchase of a home rose to 476,000 euros in the second half of 2024. That is 6 percent more than half a year earlier and the highest level since 2019. Rents also rose sharply: in the third quarter of 2024, the average rent per square meter for homes was 16.81 euros, which is an increase of 6.8 percent compared to last year.
You may not feel like it at all, says financial coach Ankie Horjus, but if your expenses are completely out of proportion to your income, you will have to: go to your computer, open Excel, make a spreadsheet and fill in very precisely where your money is going.
“Your rent or mortgage, gas, water, electricity, energy, taxes: you have to be able to pay for those. Those fixed costs also include a financial buffer of at least 5000 euros. Because what if your central heating boiler breaks down, you suddenly have to pay back childcare allowance? So saving must be part of those fixed costs.”
Don’t be ashamed – Everyone can get Into Financial Trouble
If you keep track of what you spend your money on for a few months, it will become clearer where you can save, says Horjus. Maybe you spend 150 euros a month on streaming services, tens of euros disappear into AfterPay and Klarna, or you buy something small at the Kruidvat every day.
You don’t have to be ashamed of that either, says Horjus. “Whatever your salary, everyone can get into financial trouble. Even top lawyers come to me.” With shame, that is. Because not being able to make ends meet and asking for help is a threshold too high for many people.
Do you want to spend between 20 and 30 percent of your gross income on housing costs? With a gross monthly salary of 3,200 euros, it looks like this:
In short, with your income you can spend between 640 and 960 euros on rent or mortgage each month.
Not practical, says Jasja Bos of the Nibud: report your financial problems in a timely manner to, for example, your housing corporation or energy company. “Everyone benefits from acting quickly. These bodies find it important to know at an early stage when someone has financial problems, so that they can look for a solution.”
Your employer can often offer help, knows Horjus, but that help is not fully taken advantage of by employees. Fear and taboo play a major role, she says, something that HR staff could be more alert to.
“People with financial problems don’t feel well. They sleep badly, drop out at work.” If you are constantly short, you become anxious, knows the financial coach from experience. “I also had to rely on the Food Bank in the past. That’s not fun.” People who start a process with Horjus say after about four weeks: I sleep better again. “Then their problems are not solved, but there is openness and it is being looked at.”
With the Excel Sheet that you have kept for months – or just a notebook – a financial coach or administrator can look with you. The data can even be useful to show to your mortgage lender. Bos: “A sober lifestyle used to be a reason to grant a larger loan. Now that happens little, but it is possible.”
Quick wins according to financial coach Ankie Horjus: