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Created on 12.11.2018

Three golden rules for a household budget

The main financial expenses of Swiss households are generally accommodation, taxes, food shopping and health insurance. Keep your budget under control by applying three simple golden rules.

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Many people quickly lose track when planning their budget. There are three very simple golden rules that you should follow:

  1. Around 60% of income should be set aside for monthly fixed costs, such as accommodation, taxes and health insurance.
  2. The accommodation costs should not exceed a third of the income available.
  3. The cost of food shopping for an adult is estimated at CHF 350 a month. It’s half that amount per child.

Plan your budget at the start of the year and save more

Setting a budget is time well spent that will benefit you financially. Use the e-cockpit to work out your budget while at the same time saving with the e-moneybox, an (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 and on which of your budget items at any time at the click of a 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 expenses with the full-text search, rename them and define savings goals. You can arrange to receive notification  via e-mail or SMS once you have reached them.

  • Set up an e-moneybox. This enables you to put some money away without really noticing too much. 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 – or to your nephew’s gift savings account. 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 by the savings accounts is higher than on a private account. The best time to transfer the money for savings is immediately after your salary is paid.

  • The fixed pension plan (pillar 3a) allows you to accrue assets while enjoying tax benefits. People in employment with BVG pension funds can pay in up to CHF 6,768 a year 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 all or some of your retirement assets in retirement funds, allowing you to benefit from the The link will open in a new window compound interest effect.

The personal financial plan – here’s how it works

Working out a budget requires the ability to juggle figures as well as a certain degree of discipline. The following four steps will help you to plan your budget:

1st step: List your incomings

You can find this information in your salary statements or in your most recent tax return.

2nd step: Then set out your expenses

Make sure that you include expenses paid annually, half-yearly or quarterly as well as monthly outgoings. Examples of this include insurance premiums, the Half-Fare travelcard and taxes. Use e-cockpit to gain an overview of your finances in next to no time.  Or check your account and credit card statements.

3rd step: Compile a list detailing your personal budget that is as complete as possible.

Don’t forget fixed costs not paid monthly when working out your budget – such as servicing the car, any medical appointments or holidays – and work out how much you need to set aside for these each month.

4th step: Deduct your outgoings from your incomings

If this produces a figure below zero, check your items of expenditure again for saving potential and recalculate the amount.  You’ll find a few pointers here ((LINK: article 11 – 10 unnecessary expenses in everyday life)). You can only build reserves and provide for unforeseen events (e.g. fines, accidents, family emergencies) if you have money left over.

The four most important tips for your finances

  1. Always keep an eye on your budget, check it from time to time and adjust your budget planning if necessary.  This can be done easily anytime at the click of a mouse with e-cockpit.
  2. Separate your outgoings and savings and – in addition to your private account – set up an (e-) savings account into which you can pay your savings by standing order.
  3. Set up a monthly standing order for taxes and divide the anticipated tax amount by 12 (or even better by 11) and automatically withdraw this money from your salary account at the end of each month.
  4. Set up a variable standing order and have the money left over in the salary and household budget account automatically transferred to your savings/e-savings account at the end of the month.
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