Insurance, rent, tax... What fixed expenses will you have this year? And how much will be left over for clothes and holidays? If you want to make sure you don't accidentally get into debt, then you should draw up a household budget. comparis.ch tells you how to do this.
Have you ever found that your money has run out but the end of the month is still miles away? A spontaneous weekend trip here, a new TV there and in between a cool pair of trainers: with the current trend toward paying in instalments, cheap credit and cashless payment, the temptation to spend money is high. Before you know it, your bank balance is down to zero, then if you get an insurance or tax bill, you suddenly find yourself in financial difficulty. In the last decade alone, household debt in Switzerland has risen by 40 percent, and this figure is rising. Yet there are ways of making sure you don't get into debt. Setting a realistic household budget will make sure you don't have any unpleasant surprises. The beginning of the year is a good time to do your budget.
Step 1: What are your main fixed expenses?
To be on the safe side, you need to work out what outgoings are unavoidable. For most people in Switzerland these will include insurance, accommodation costs and tax. These alone will make up around half your household expenses. Only once you have take these into account can you budget for clothes, food and holidays.
According to the budget advice organization “Budgetberatung Schweiz”, a family with two children and a net monthly income of 7000 Swiss francs will have the following main expenses:
Accommodation costs (incl. electricity) = 1820 francs (should make up around ¼ of income)
Health insurance = around 1100 francs (compulsory insurance and accident insurance for children; plus annual deductible (franchise) of 100 francs minimum and co-insurance)
Food = 1050 francs (for young persons 12 and older you should add on up to 100 francs)
Tax = approximately 600 francs (depends on domicile; see your last tax bill)
Step 2: Variable expenses
Variable expenses include clothing, transport, education, childcare, communications, holidays and reserves (for unexpected items such as repairs). They depend on your living situation (renting/homeowner), the number and ages of your children (childcare/education), how far you live from your work (car/public transport), personal lifestyle (travel/hobbies) etc. You will have to draw these up for yourself, ideally based on old receipts. Make sure you don't forget cash payments for cinema trips, meals out, dry cleaning, etc.
Step 3: Do your income and expenses match up?
Next compare your total monthly expenses with your expected income (salaries and other income). If your expenses already exceed your income, you need to go back to your budget planner and see which items you might have allocated too much to. Where could you make savings? If your budget balances, you have a solid basis to work from. Then you can compare your forecast expenses with your actual expenses at the end of each month, and potential issues will stand out straight away.
Tips: ways of saving money
Is there a massive hole in your budget? Then it's a good idea to look very carefully at all your outgoings as there are always ways of making little savings here and there. Here are a few useful tips:
- Always make a shopping list
- Never shop on an empty stomach
- Don't be tempted by (supposed) bargains
- Think carefully about what you want to buy
- Compare prices online
- If your mobile phone bills are high, then consider changing to a flat rate, which gives you unlimited calls and texts.
- Do you go online a lot or do you mainly use your mobile phone to make calls? You might be able to swap to a cheaper plan. Compare mobile phone costs at comparis.ch.
- Although basic health insurance plans from all health insurers provide the same benefits, the premiums differ, so it can be worth changing health insurer. This could easily reduce family outgoings by a thousand francs or more. But which health insurer is cheapest? Click here for an up-to-date overview of what's on offer.
- Depending on the age and health of household members you may also be able to save money by increasing your deductible.
- A bicycle is by far the cheapest and most eco-friendly means of transport. And it keeps you fit.
- If you can't do without a car, however, perhaps you could save money on your car insurance. At comparis.ch you can compare car insurance.
For your information: digital budget planners
Traditional budget books which you use to keep track of your income and outgoings are available from stationers and department stores, but digital budget planners are even more practical. The advantage of these is that they not only help you to plan your budget, but also reveal hidden costs. There is a range of planners to choose from including Excel templates, online budget planners such as the one from Budgetberatung Schweiz (DE, FR, IT) and apps such as “My Budget Book” or “Budgetalarm K-Tipp”(DE, FR).