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Created on 12.11.2018

Save where it’s worthwhile – the four main savings steps in your budget

Everyone’s priorities are different when it comes to spending money, or not as the case may be: some people love long-haul holidays, a car is important for others, while some like spending their money on fashion items. However differently people plan their budget, there are four major items in every household budget which are essential: accommodation, insurance and health insurance, food and tax. We’ll show you how you can save money on them here.

  • Accommodation in Switzerland can be very expensive – between 20% and 30% of income is generally spent on rent, the mortgage and utility costs. However there is potential for saving here too. That does not necessarily involve moving to a less expensive area or to a smaller apartment. You can save on accommodation costs with the following savings tips:

    Review your utility costs

    Take a close look at your utility costs. See if you can make any savings for your household budget. Do you use energy-saving light bulbs? Do you turn your electronic devices off instead of constantly leaving them plugged in on standby? Do you air your home well for a short time instead of leaving the window open? Do you only leave mobiles and laptops plugged in until they are fully charged instead of having them constantly connected? Do you use low-tariff electricity for washing? For homeowners, it is worth considering replacing window sealing to help you save on heating costs. Tenants can report unsealed windows to their landlord. 

    Make claims for defects

    Tenants who live in apartments with serious defects can claim an appropriate reduction of the rent under the Swiss Code of Obligations (OR) until they are rectified. For example, these include poor insulation or radiators that don’t work properly. The Tenants’ Association has published a comprehensive factsheet on this matter.  

    Update your household insurance

    Check online to find out whether you actually save money by extending your existing household insurance. There may be less expensive offers with similar benefits. It is well worth checking regularly to determine whether you really need all of the benefits included or whether the value of your contents has even gone up and you’d like to take out insurance for a higher value which would also mean paying a higher premium. 

    Check the reference interest rate and apply for a rent reduction

    Check to find out whether you’re entitled to a reduction in rent. The entitlement depends on inflation, running and maintenance costs and changes to the reference interest rate. The Tenants’ Association provides a simple tool for this purpose, allowing you to check if you are eligible: go to the online tool. If you’re entitled to a reduction in rent, submit an application to your landlord. 

    Moving home

    If your rental costs exceed 20% to 30% of your income, it’s worth considering a move. If you leave an urban area, you also have to factor higher public transport and motoring costs into your household budget. Relocating is also expensive. It may be worth buying your own home: but first work out exactly how much money you would actually save long-term by purchasing your own property with the costs involved, mortgage interest and taxes in your new municipality. Quality of life is also a major consideration when it comes to moving home: many people believe the freedom of owning their own home is worth more than saving a few thousand Swiss francs over the long-term – for others, living in the city is more important than leaving town for lower accommodation costs.

  • Insurance is important – health insurance, liability insurance, household insurance and perhaps motor insurance are standard policies for everyone. However there are ways of reducing premiums and saving money here too – by following these savings tips for your budget:

    Health insurance

    Basic cover with a health insurance scheme is mandatory – and usually not exactly cheap. It’s advisable to regularly compare premiums and to bring deductibles and excess into line with your requirements. Insured parties with low income can apply for premium discounts. Check once a year whether your basic cover and any additional insurance policies really meet your requirements: do you actually need and use the benefits you are paying for? Could you take out cheap additional insurance? Is a free choice of doctor important to you? You can save money by opting for the highest deductible and restricting your choice of doctor. But not always: work out exactly how much you’ll save with this premium variant. 

    Liability insurance

    Private liability insurance is strongly recommended for most people. With a relatively low premium, insured parties cover themselves against damages which they could do to other people or property. A family insurance policy may be a good way of saving money for families. The same applies as to health insurance: check your liability insurance regularly, particularly the excess. If you own a car, motor insurance is mandatory. 

    Household insurance

    As previously mentioned, there are also ways of reducing your costs on household insurance: get a number of different quotes and work out what’s best for your situation and budget plan. Also consider which benefits you really need or whether a change could save you money. 

    Comparing what’s available is worth it

    As a general rule of budget planning, take the time to check your premiums once a year. If it’s worthwhile, change your insurance policies so that they meet your needs properly and keep your household budget down. Make sure you’re not paying for benefits each month which you don’t really need or use. If you find a quote where the premiums are lower for the same or better cover, then switch your insurance policy. Particularly with health insurance, only restrict cover to the extent you feel comfortable – alternative forms of insurance, such as the family doctor model, Telemed and the HMO model are not ideal for everyone.

  • As with everything else, priorities also differ when it comes to food. Everyone from those who’ll eat absolutely anything to gourmets can save money with a few tips – provided they have a budget. If you apply these savings tips, you can cut your food bill:

    Plan your weekly shop

    Proper planning saves money. For example, if you plan once a week which dishes you intend to prepare over the coming week, you avoid the risk of buying too much or throwing away leftovers. 

    Write a shopping list

    It may sound banal but it definitely works: write a shopping list and only buy what’s on it. Avoid impulse or frustration buys and try not to forget things so you have to go back to the supermarket. 

    Special offers

    Special offers are great and not just for families. Comparing prices online and keeping an eye on the latest deals can save you quite a bit when planning the weekly shop or before heading off to the supermarket. But watch out: don’t succumb to the temptation of buying more than you need. Large packs are usually only the best option for non-perishable foods, such as pasta, rice, flour, salt, sugar and jams etc. And make sure you store your provisions properly. 

    Going shopping just before closing time

    Many supermarkets discount the price of food approaching its expiry date shortly before closing time. That ranges from mozzarella to steak – so shopping just before closing time is also something for gourmets to consider. 

    Loyalty programmes

    Yes, loyalty programmes really do pay off. Even small households can enjoy special deals if they sign up for the loyalty programmes offered by the major supermarkets and collect points on every purchase. This also includes those with a discerning palate: large delicatessen shops also run loyalty programmes. 

    Cooking at home instead of take-aways and restaurants

    You can save a good deal of money on eating out at lunchtime – it is obviously up to everyone to decide for themselves whether to do this or not to give up take-aways, canteen food or restaurant lunches. It may be worthwhile taking snacks prepared at home to work on certain days of the week instead of getting in the habit of buying lunch every day. For example, if you went without a take-away lunch costing an average of CHF 15 twice a week and took something from home instead, you’d save over CHF 1,500 a year – this would also mean you wouldn’t have to give up visits to restaurants or the take-away stand for most of the week. 

  • Tax obviously has to be paid. With the right advice, you can nevertheless minimize your tax liability and ensure you only pay what you have to.

    The magic word is “deductible”

    find out which deductions you are eligible for and make sure you claim them. Take work-related expenses, for example: depending on the municipality, you can deduct a flat rate of  CHF 700 for your bicycle, CHF 500 for advanced training (without documentation) and flat-rate amounts for other work-related expenses, such as food, work clothing and specialist books. Also healthcare costs: healthcare and accident costs not covered by your insurance can also be deducted in addition to healthcare, accident and life insurance premiums. These include glasses, dental fees and appointments with recognized naturopathic practitioners. Donations are also deductible – up to 20% of net income. People who use a home office can also claim tax allowances for it in certain cases. Savings can also be made on retirement planning: payments to pillar 3a and the purchase of additional pension benefits can also be claimed. You can find out more about this in the article entitled “Provide for the future and save on taxes”.

    The early bird catches the worm

    in some cantons it can make sense to The link will open in a new window pay your taxes in advance. Some cantons pay interest to residents who pay their taxes in advance. In certain cantons, this can be quite a bit higher than the interest that you receive on your savings account while in others there is no compensatory interest. 

    Think carefully when deciding where to live

    Are you moving or buying your own home? Are you considering moving to a place of residence with more favourable taxes? It is important that you work out exactly how much you can save by relocating to a municipality with lower taxes if property prices and rents are higher. 

If you systematically apply all savings steps and follow the savings tips when  The link will open in a new window planning your budget, you can save a significant amount of money each month and each year. Try it yourself!

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