Keywords:
financial planning germany
expat finance germany
investing germany expats
Most financial guides jump straight to the product. Which ETF, which insurance, which provider.
But the product question is the last one you should be asking – not the first.
This guide walks through financial planning for families in Germany in the order that actually makes sense: foundation, goals, structure. Only then does the product question become answerable at all.
And if you are an international family, there is an extra layer: your plan needs to survive the possibility that you move. We will come back to that.
Before a single euro is invested long term, three things should be in place.
The emergency buffer: roughly three to six months of expenses, available at any time in a Tagesgeld account. Not in ETFs. The purpose of this money is not return – it is that a broken washing machine does not force you to touch your savings plan.
Income protection (Berufsunfähigkeitsversicherung): your ability to work is your biggest asset. This protects it – and with it, everything built on top.
Personal liability insurance (Haftpflicht): cheap, unglamorous, and potentially existence-saving.
Only once these three are in place does long-term investing make sense. Otherwise you are building on sand.
A family does not have one goal. It has several – and each has a different time horizon. That is what determines the right approach.
Short term (0 to 3 years): emergency buffer, planned purchases. Belongs in a Tagesgeld account. Here, volatility is not an opportunity – it is a risk.
Medium term (3 to 10 years): a car, a renovation, a deposit for a home. A mix, depending on how fixed the date is.
Long term (10 to 20 years): your child's capital. Here the capital markets are not risky – they are the sensible choice. With 18 years, you can ride out volatility, and compound growth needs exactly that time.
Very long term (20 to 40 years): your own retirement.
The most common mistake is treating everything the same. Parking money with an 18-year horizon in a savings account is just as much a mistake as putting your holiday budget into ETFs.
The question parents ask us most: "How much should we put aside each month for our child?"
The honest answer: there is no correct amount.
What matters more than the size is consistency. 25 euros a month for 18 years beats 200 euros that stops after two years because it was too ambitious.
A workable rule of thumb: choose an amount you would not question even in a bad month. Better to start low and increase later than to start high and quit.
And do not confuse the savings rate with savings success. The biggest lever is not the amount – it is time. Start at birth and you have 18 years of compounding. Start at eight and you have ten. No higher savings rate closes that gap.
This is where it gets concrete – and where most families make a decision without realising they are making one.
The central question is not "which ETF?" but: who should own the money, and who gets access, when?
A depot in your child's name means the money legally belongs to them. You can use their tax allowances – together up to roughly 13,384 euros of investment income per year tax-free (2026). But at 18 your child gains full, irreversible control. And the capital can reduce their BAföG entitlement.
An ETF policy means you remain the policyholder at first. You decide when your child takes over – nothing happens automatically at 18. As soon as you make them the policyholder, the same tax allowances become available to them. In exchange, ongoing costs are generally higher.
For internationally mobile families there is a further point: not every German broker keeps a depot open once you move abroad. With an ETF policy you can in many cases keep contributing after leaving Germany, as long as you keep a German bank account. If there is any chance you will move, that is not a detail. It is the whole question.
A financial plan is not a document you create once and file away. It is a structure that has to grow with your life.
Once a year is usually enough. And always when something fundamental changes: another child, a new job, a raise, a move – especially a move abroad.
The questions are simple: does the savings rate still fit? Are the goals still the same? Has anything changed that affects the structure?
Families who set up a savings plan once and never look at it again end up, five years later, with a structure built for a life they no longer live.
Where do we start?
With the foundation: emergency buffer, income protection, liability insurance. Wealth building comes after. That order is not negotiable.
How much should we save each month for our child?
There is no correct amount. Pick one you can sustain even in a bad month. Consistency beats size.
Should we save for ourselves or for our child first?
Both belong in one plan. Neglecting your own retirement simply passes the problem to your child.
We might leave Germany in a few years. Should we still invest?
Usually yes – but choose a structure that can move with you or keep running. A contract that locks you in is a poor fit for a mobile life.
If you boil this guide down to one sentence: financial planning is an order of operations, not a product catalogue.
Secure the foundation. Separate the goals by time horizon. Choose a realistic savings rate. Decide the structure – who owns the money, who gets access when. And only at the very end, the product question.
Most families do it exactly backwards. They buy a product and hope the rest falls into place.
For international families there is one more rule: build a structure that survives a move. Because for expat families, life usually does change.
We are not a tax firm, and we will tell you honestly when you need a specialist Steuerberater. But we help you keep this order – so that the product decision almost makes itself at the end.
This article is general information and does not replace individual tax or legal advice.
Sources: German Federal Ministry of Finance (basic allowance, saver's allowance), German Income Tax Act (EStG). Figures as of 2026 – tax allowances are adjusted annually.
About the author
Erol Eren holds a Bachelor in Economics and is a founder of ETF4Kids, advising families and expats in Germany on child savings plans and family finances. ETF4Kids GmbH is licensed as a financial investment broker (§34f GewO), insurance broker (§34d GewO) and real estate loan broker (§34i GewO) by the IHK Region Stuttgart.
what financial planning for your family
should actually look like,
from the foundation to the structure,
it is worth gaining clarity first.
Because good decisions
do not come from rushing.
They come from understanding.
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