Traveling, theater visits and hobbies, plus the desire to buy property at the same time: in a household, the expenses can soon pile up. A budget can help you to keep your finances under control and avoid surprises – but only if you do it right. We show you how to draw up your budget and how it will help you to achieve your common financial goals in the long term.
Keep control over your budget and finances
A household is like a business. You and your family manage the finances – and at the end of the year, all being well the income should be greater than the expenses. With this money you, or the whole family, can fulfill a long-held wish, or save up for something specific in the long term. The basis for this is knowing what you spend your money on. With a household budget, you can see at a glance how much money you and your family will have left at the end of the month. A budget also helps you to identify savings potential.
Draw up a budget: what are your monthly expenses?
To draw up a budget, you need to know your precise financial situation. It is therefore important to be honest and provide accurate information. This is the only way to ensure that it will be of benefit to you and your family. Even if you plan to spend less money on your car, vacations, clothing or leisure in the future – the current amounts should be entered in your budget. Our tip: if your monthly expenditure on an item fluctuates a great deal, you can take the average of the last six months as a basis, for example.
1. The first step is to calculate your total income consisting of:
- Any premiums
- Financial income from assets
- Pension entitlements such as AHV and IV
- Other income
2. The second step is to make a list of your expenses broken down into individual categories:
- Habitation: in addition to rent or mortgage interest, all incidental costs and maintenance costs should also be included
- Insurance policies: health insurance, car insurance, household insurance and all other insurance policies
Extra tip: you can classify all your payments in UBS E-Banking. This will allow you to obtain an overview more quickly when listing your expenses.
3. Finally, compare your income with your expenses
There are several tools and templates that can help you with this. Our online budget calculator can be useful. This tool will help provide clarity about your financial situation. You can easily enter your family’s income and expenses. Based on this information, the calculator creates your personal budget so that you can keep a healthy balance between income and expenditure and regularly put money aside.
How to best allocate your financial resources
As soon as you have obtained an overview of your income and expenditure, you can make a start on the actual budget planning. To find out what proportion of income you should be spending on the various cost categories, it’s worth taking a look at the usual benchmarks, such as the Swiss budget advisory association. For example, a family with two children should ideally spend a maximum of 30% of income on housing, 20% on household and 12% on leisure.
Consider family planning
When budgeting, you should also take into account your personal planning – for example, family planning – regardless of whether you are expecting your first child soon or are already a mother. This is because a child increases consumer spending in the family budget by an average of 819 francs per month (Federal Statistical Office). Children aged 11 years and over are the most expensive – at this age, it is not only hobbies that have to be financed, but education too. Overall, parents should reckon with additional expenditure of around 10,000 francs a year for the household alone. By the time the child is 18, this will have added up to the tidy sum of 200,000 francs. Each extra child causes additional costs – but the cost per child decreases.
You mustn’t forget that having a child usually results in a decline in income at the same time – it is still often the women who give up or reduce their gainful employment. Child allowances of at least 200 francs per month or 250 francs during training don’t make up for this shortfall.
Use the household budget as a basis for long-term financial planning
A household budget is important for keeping your finances under control. And in the long term it also pays off for financial planning. Be it for you or as a family, it is not just a matter of having an overview of your current expenses, but also of thinking in the medium and long term and structuring assets according to your financial needs. You should therefore set your financial goals early on and consider what financial resources you need and when. For the children’s education? Your own retirement planning? Or maybe for real estate? This will facilitate financial planning that is tailored to your assets, needs and financial goals. Perhaps it won’t be possible to put money aside for all your desires right from the start. So you should set priorities and start with what is most important to you.
Use E-Banking and co. – to put your plans into practice
Lastly, it’s important to consistently stick to the planned budget – this is the only way to achieve your goals without effort. E-Banking provides vital support by allowing you to keep constant control of your spending and your account balance. We also recommend setting up direct debits and standing orders for regular expenses. This will ensure you don’t forget to make a payment and help you to avoid unnecessary fees.
We would be pleased to assist you along the way.