What Are You Actually Doing with 60,000 kr in June?
Asgeir Albretsen
Published
Every June, a round sum appears in your account. It can feel like a windfall, but it is not. Feriepenger (holiday pay) is earned salary from the previous year, and in the month you receive it, you normally do not get your regular June wage on top.
So the question is: what are you actually doing with it?
What is holiday pay?
Holiday pay is calculated as a percentage of your previous year's earnings, known as the feriepengegrunnlaget (holiday pay basis). The statutory rate is 10.2 per cent for four weeks and one day of holiday. If you have five weeks' holiday under a collective agreement, the rate is 12 per cent.
For someone who earned 500 000 kr last year, that means:
- 10.2 %: 51 000 kr
- 12 %: 60 000 kr
Holiday pay earned in the previous year is tax-exempt at the point of payment, so the net amount in June is often somewhat higher than a normal month's salary. It is still money you have already earned, not an extra income.
The temptation sets in early
Many people book flights and hotels as early as January or February, long before the holiday pay is visible in their account. That is not necessarily wrong, but without a plan it is easy to spend more than intended.
The result is often that the holiday pay disappears within one or two weeks, and the rest of the summer feels tighter than it should. The bills in August are exactly the same as in April.
Divide the money into four buckets
A simple way to avoid this is to split your holiday pay into four categories before you spend anything. Here is an example based on 60 000 kr:
| Bucket | Purpose | Example (60 000 kr) | Share |
|---|---|---|---|
| Holiday and travel | Flights, hotels, activities | 28 000 kr | 46 % |
| Buffer | Top up or start an emergency fund | 10 000 kr | 17 % |
| Debt | Pay down credit cards or consumer loans | 12 000 kr | 20 % |
| Savings | BSU, funds, or long-term savings | 10 000 kr | 17 % |
The percentages are not a prescription. If you have no debt, move that share to savings or travel. If your buffer account is empty, prioritise it higher.
The point is that you decide the split before you book anything, not after the money is gone.
BSU (Boligsparing for Ungdom, the Norwegian tax-advantaged savings scheme for first-home buyers under 34) is worth filling before any other savings vehicle if you are eligible.
Who should prioritise what?
For most people, the sensible starting point is the buffer account. Having three to six months' salary set aside is a common recommendation from personal finance advisers, but many Norwegian households are far from that target. Holiday pay is a concrete opportunity to move in the right direction.
If you have high-interest debt such as consumer loans or credit cards, paying it down is in most cases more profitable than saving. Interest on consumer loans typically runs at 15 to 25 per cent, while a savings account rarely pays more than 4 to 5 per cent.
The holiday is of course important, but you do not need to spend all your holiday pay on it. It is entirely possible to plan a good summer and still keep some flexibility for the rest of the year.
Set up a holiday budget line from May
A practical approach is to create a dedicated budget line called "holiday" or "summer budget" as early as May. Allocate the four bucket amounts in advance, so you already know what you can spend when the money arrives in June.
You do not need to wait for your bank statement to have the plan ready. The earlier you set the limits, the more relaxed your summer will be.
If you use Luma, you can create a separate category for your holiday budget and track spending in real time throughout the summer.