Budgeting made easy: five tips on budget planning (2024)

• While studying or training Keep your finances under control with the right products for you
• For children and young people Simple products that can grow along with you

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 incomeshould 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 CHF350 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.

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. What’s more, they can save with a savings account and a retirement savings account 3a.

Set up a standing order from your private account to a savings account. This means you save regularly and don’t have to remember to transfer money from your private account to your 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.

• To savings account

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 CHF7,056 a year (as of 2023) for their retirement and the self-employed 20% of their earnings up to a maximum of CHF35,280 per year (as of 2023). 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 thecompound interest effect.

• To retirement savings account 3a

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