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Created on 12.11.2018 | Updated on 10.11.2020

Budgeting made easy: five tips on budget planning

How much do you have left over at the end of the month when you deduct all your expenses from your income? A budget plan gives you an overview of your finances. Thanks to these simple tips, you can improve your budget in a targeted way.

Why draw up a budget plan?

It’s actually quite simple: you have income and expenses. The only way you will have money left over to save up for something you want or to make an attractive investment is by earning more than you spend. OK, let’s be honest: we shouldn’t be putting money aside for our wishes and dreams alone. It’s important to have reserves so that we are prepared for any unforeseen expenses, able to pay our taxes and can provide for our retirement in the long term.

With a budget plan, you can obtain an overview of your finances and find out where you are spending money unnecessarily, as well as where you could perhaps save a bit more money.

Many people quickly lose track when planning a budget. But drawing up a budget plan is not difficult at all. Here’s how it works in five easy steps.

Step 1: three general rules to get you started

Before making a start on the specific breakdown, the first step is to pay attention to these three basic ground rules on how to structure your budget.

  • About 60% of your income should be reserved for monthly fixed costs (housing, taxes, health insurance).
  • Housing costs should not exceed a third of your available income.
  • The cost of food shopping for an adult in Switzerland is estimated at CHF 350 a month. It’s half that amount per child.

Step 2: set out your income

You can use an Excel template from the Internet, produce your own Excel table or draw up any other kind of list. It doesn’t matter which option you choose. The important thing is to draw up the list in a way that works for you.

You can find information about your income in your salary statements or on your most recent tax return. Your income is made up of your salary or your pension. You might receive additional income in the form of state subsidies, interest and investment earnings, rental income payments or any other regular income.

Step 3: compile a list of your expenses

Make sure that you include expenses paid annually, half-yearly or quarterly, as well as monthly expenses. Examples of this include insurance premiums, the Half Fare Travelcard and any taxes. Check your account statements and credit card bills to do this. Some banks now also provide an automatic financial assistant. PostFinance, for example, offers e-cockpit, which provides an overview of your finances in next to no time.  

Step 4: make a list detailing your personal household budget that is as comprehensive as possible

When planning your budget, make sure you also take into account fixed costs that do not occur monthly – such as car servicing costs, any potential medical costs or holidays – and calculate how much you should save each month for these costs in your personal budget plan.

Step 5: deduct your expenses from your income

If this produces a negative figure, check your expenditure again for any potential savings and recalculate the amount. You will find a few helpful pointers in the article “Unnecessary expenses that you can keep under control with a budget”. You can only build up reserves, provide for unforeseen events (e.g. fines, accidents, family emergencies) and save up for the things you want if you have money left over.

Plan your budget at the start of the year and make additional savings

Creating a budget takes effort but it’s well worth it in terms of your financial situation.  The easiest way for PostFinance customers to create their budget is with e-cockpit. What’s more, they can save with e-moneybox, a savings or e-savings account and a retirement savings account 3a.

  • E-cockpit records all transactions and assigns them to pre-defined categories. You can see how much money you have spent on which of your budget items at any time with a click of the mouse: e-cockpit presents this for you personally in the form of a pie chart. This means you always keep track of how much money you have left over for the current month. You can quickly find all your expenses using the full text search, rename categories and define savings goals. You can ask to receive a notification via e-mail or SMS as soon as you have reached these goals. 

  • Set up an e-moneybox. This enables you to put some money aside without really noticing it. Whenever you pay with the PostFinance Card, you can opt for the debited amount to be rounded up to the nearest franc or nearest CHF 10. You can have the rounding difference credited to one of your accounts. By doing so, you save regularly.

  • Set up a standing order from your private account to a savings or e-savings account. This means you save regularly and don’t have to remember to transfer money from your private account to your savings or e-savings account each month. The interest paid on a savings account is higher than on a private account. The best time to transfer the savings amount is immediately after your salary is paid.

  • The fixed pension plan (pillar 3a) allows you to accrue assets for your retirement while enjoying tax benefits. People in employment with BVG pension funds can pay in up to CHF 6,768 a year for their retirement and the self-employed 20% of their earnings up to a maximum of CHF 33,840 per year (as at: 2018). The money paid in can be deducted from taxable income. You don’t pay any wealth tax on the retirement assets and interest and investment earnings are exempt from income and withholding tax. In addition or as an alternative to fixed-interest account deposits, you can invest your retirement assets either partly or entirely in retirement funds. By doing so, you make provision for your retirement while also benefiting from the compound interest effect.

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