Budget planning: how to achieve your goals

Traveling, theater visits and hobbies, plus the desire to buy property at the same time: in a household, the expenses can soon add up. Good budget planning can help you 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.

A household is like a business. You and your family manage the finances – and at the end of the year, all being well, your income is greater than or at least equal to your 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. By drawing up 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 identify potential savings.

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, individuals with a net income of CHF 7,000 should spend no more than half of it on fixed costs such as housing, taxes, insurance, telephony and public transport subscriptions. For a family with two children, the rule of thumb is to spend no more than 30 percent of income on accommodation, 20 percent on household expenses and 12 percent on leisure.

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 CHF 1,525 per month (Office for Youth and Vocational Guidance. Last updated: 2022.)) Children aged 13 years and older cost the most – at this age, it’s not only hobbies that have to be financed, but education too. Overall, parents should reckon with additional expenditure of around CHF 18,000 a year for their household expenses alone. By the time a child turns 18, this will have added up to the tidy sum of CHF 330,000. This does not include indirect costs such as external childcare, lower income in case of self-care or the value of unpaid family work. 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’s still usually the woman who stops working or reduces their working hours. Child allowances of at least CHF 200 per month or CHF 250 during education aren’t enough to make up for this shortfall.

Budget planning is important for keeping your finances under control. And in the long term it also pays off for financial planning. For you, it’s not just a matter of keeping tabs on 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.

Lastly, it’s important to consistently stick to your 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.