Remittances as a fixed cost (Auslandsüberweisungen)
A remittance is money sent from Germany to family abroad, and for many immigrant households it behaves as a fixed cost rather than a discretionary one. The amount is often set by a recipient's need — a parent's rent, a sibling's tuition — not by how much is left in the sender's account that month, so it recurs at a similar figure every cycle regardless of the sender's own spending.
Why it matters
Classifying a remittance correctly changes how a household budget adds up. A budget that treats a €250 monthly transfer as "whatever's left over" overstates disposable income and understates the fixed-cost floor a paycheck must clear before any saving happens. For many people who moved to Germany, sending money home follows a rhythm driven by the recipient's circumstances, not the sender's — which is exactly the test for a fixed cost (Fixkosten): does the amount change with the sender's own month-to-month choices, or not?
Not every remittance qualifies. An occasional, discretionary gift sent when money is available behaves as a variable cost — it moves with the sender's own spending decisions. A standing transfer covering someone else's rent or a fixed contribution to a parent's living costs behaves as fixed, because the amount is anchored to the recipient's ongoing needs and keeps recurring whether the sender's month was good or bad.
A fixed remittance belongs in the household's cost floor — the fixed obligations a paycheck must clear before anything is genuinely discretionary — which is why it interacts with pay-yourself-first (saving before spending): the savings figure is set from income minus that floor, so a €250 transfer left out of the floor quietly inflates how much seems saveable. The same amortizing logic rescues costs that look variable but are in fact predictable. A yearly birthday gift, a holiday present, or an annual trip home is irregular month to month yet reliable across the year; dividing its known annual total by twelve turns it into a small monthly line that behaves like a fixed cost, instead of a recurring "surprise" that keeps derailing the budget.
Worked example
A household in Germany earns €2,800 net per month and sends €250 to a parent abroad every month to cover part of their rent.
| Line item | Amount | Fixed or variable |
|---|---|---|
| Kaltmiete (cold rent) | €950 | Fixed |
| Health insurance | €220 | Fixed |
| Phone/internet | €40 | Fixed |
| Remittance to parent | €250 | Fixed (standing commitment) |
| Groceries, transport, leisure | €700 | Variable |
Total fixed costs: €950 + €220 + €40 + €250 = €1,460. After variable costs of €700, the household has €2,800 - €1,460 - €700 = €640 left for saving or debt repayment.
If the same €250 is instead left out of the fixed-cost line and mentally filed under "leisure" or "whatever's left," the household appears to have €890 of flexible spending room instead of €640 of true savings capacity. The transfer still goes out every month regardless — only the household's read of its own numbers changes, and it changes for the worse: it understates the fixed-cost floor and overstates how much slack the budget actually has.
Check yourself
A household in Germany earns €2,800 net per month. Its fixed costs are: rent €950, health insurance €220, phone/internet €40, and a standing remittance to a parent abroad €250. Variable costs (groceries, transport, leisure) total €700. How many euros are left for saving or debt repayment?
A remittance sent home each month is best classified as a fixed cost rather than a variable one when which of the following is true?
Which of the following statements about treating a remittance as a fixed cost are correct? Select all that apply.