How to save successfully with a family budget

Sep 21, 2020.

Going from being a couple with two salaries to a family with one – that’s a big step both personally and financially. The topic of families and finances raises many questions. One thing is clear: if you keep to a realistic family budget, you’ll be able to cope well with this new phase of your life. Here are some top tips from our partner Budgetberatung Schweiz, an umbrella organisation for budget advice providers, on how to create, manage and control your family budget correctly.


When your family grows and your income shrinks

Upscale rent, two leased cars and costly hobbies are fine for a couple with two incomes. Even with modest salaries, dual earners can afford a lot. But that changes suddenly when the couple becomes a family and their income is noticeably reduced. If you continue making financial decisions based on impulse and don’t alter your fixed costs, sooner or later you’ll find yourself struggling. It’s difficult to curtail your standard of living from one day to the next. So start early if you want to have a family.



How to draw up a family budget in two steps

A budget should list all your income and expenses so that you can allocate your income optimally. Budgetberatung Schweiz offers blank budget templates for you to fill in. They’ll help you create a personal, customised budget.


Step 1: Enter current amounts

You’ll find four blocks in the template for budget items: fixed costs, household costs, personal expenses and provisions. These are the standard expense items in ordinary private households. Regardless of whether your bills are due on a monthly, quarterly or yearly basis, calculate them all for the year as well as the month.


What does that mean? For example, divide your Serafe bill (radio and television licence fee), which is CHF 365 per year, by 12 months, and enter the result (approximately CHF 30) as a provision in the “monthly” column. This is the only way to see how far your income actually goes.


Start by entering all your income and all the expenses you incur in the template. Then list further expected costs, such as visits to the dentist or education, and expenses for things you'd like to have, such as holidays. You probably know the exact amounts you pay for rent, taxes and insurance, so they are easy to enter in the template. Household, clothing and other expenses can be estimated based on your spending in the past months or years, or you can consult our sample budgets.


Step 2: Make corrections

Ideally, your income and expenses should balance each other out, or you should have an income surplus. If your income falls short of your expenses, you should go through your budget again point by point and consider where you can save. If the difference is small, often you only need to adjust your personal expenses. You can do this immediately. If the difference is large, you might have to consider moving to a cheaper apartment or giving up your car to solve the problem in the long term. Alternatively, the shortfall could be offset by additional income.


Budgetberatung Schweiz has put together sample budgets for various phases in life, household sizes and income levels. Some users find these examples unrealistic. However, they show what direction you need to take if you don’t want your household to go into debt.


Step 3: Long-term perspective

Your civil status makes a big difference when it comes to money and provisions. Whether you are married or cohabiting, the way your income is split will affect your professional development opportunities and thus also your salary level. This will in turn have an impact on the division of roles, social insurance and pension provision.


We therefore recommend that couples make arrangements in good times for all the things that would be difficult to sort out in bad times.


What’s more, you should get neutral advice on employment contracts, contractual solutions with your cohabiting partner and other contracts if you’re unsure whether they’re a good solution.


The fact is: if you give up your gainful employment entirely or to a large extent to look after your family, you will have to absorb higher financial losses in the long term than your partner does. Especially when it comes to pensions, and also in marriage. This is especially true if your partner dies before you.

You should also know that shared parenting, involving part-time work for both parents, also has long-term consequences for social insurance and pension cover, which needs to be considered.



Saving money in your everyday life: five practical, effective tips

Tip 1: Resist temptation and achieve your savings goals

There’s a great sale here and rock-bottom prices over there – the temptations in shops and online stores are huge. Be critical and think carefully about whether you really need a product before you buy it. Special offers are where the greatest temptations and traps lurk in everyday life,

  • because they aren’t always cheaper. “Three for the price of two” is actually more expensive if you only wanted to buy one product.
  • The items that shops want to sell you are at eye level. You can usually find cheaper alternatives on the very bottom shelf or at the top. 
  • Is your wardrobe full? Before buying anything new, ask yourself if you really need another sweater.
  • Leftover food in the rubbish bin is a waste of money. Declare war on food waste and serve up a buffet of leftovers from time to time.
  • Looking ahead saves money: for example, you can find inexpensive gifts to bring your hosts at a party. Take advantage of half-price and quarter-price offers. 


Tip 2: Think twice before making large purchases

Think twice about major expenses, and ask yourself a few important questions before making a purchase: 

  • Is this really necessary and important?
  • Will we be contractually bound to someone for a long time?
  • Will we have to go into debt to make this purchase?
  • Would this purchase rule out projects such as unpaid leave or a professional development course?


You should critically examine anything that will curtail your flexibility in the long term. When sellers offer buyers substantial freedom, this often turns out to be disadvantageous – because it involves instalment payments or long contract terms, for example.


Tip 3: Don’t shop with borrowed money

Buying something with your own savings is always cheaper than financing it with borrowed money, such as a consumer loan. If you pay for something later, it is always more expensive and complicated in the end. You should therefore weigh up big financial decisions carefully and discuss them with your family. That will help you to recognise potentially bad decisions and avoid conflict with your nearest and dearest.


Tip 4: Track your budget and keep an overview

A budget only makes sense if you keep an eye on it. Clearly define who in the family is responsible for which budget item. There are different strategies for keeping an overview: Some people put money aside in various envelopes. Others withdraw a certain amount every week or work with lists and apps.


If you don’t want to pay in cash, you can use debit cards, which immediately deduct the expenses from your account. If your account isn’t charged until long after your purchase, it’s much more difficult to keep track. Money is one of the most common topics of disagreements in relationships. If you are open with each other about your finances, this creates a solid basis for finding solutions together. Such openness is even stipulated by law for married couples (Swiss Civil Code Art. 163 / Art. 170).


Tip 5: Recognise and react to warning signals

Don’t hide your head in the sand if you can’t make payments on time or if you have to keep overdrawing your account. Take these warning signs seriously before your budget gets weighed down further by late payment interest. Ask yourself how you can improve your situation:

  • Can you increase your income within a reasonable period of time?
  • Are you already receiving all the state benefits that you are entitled to, such as reduced premiums and birth, child and education allowances?
  • Are you really making the most of the savings potential in your budget?


“We often find that people seeking advice have a very good feeling for their own finances. Our consultations merely show where the root of certain problems lies. This process creates clarity and security. If you get your budget sorted before you embark on the new phase of your life, you’ll be able adjust it and apply it comfortably. That will stabilise your family life enormously.”


Andrea Schmid-Fischer, President of Budgetberatung Schweiz (Budget Advice Switzerland)


A budget is not a straitjacket, but a practical support to steer your money to the places where you want it to be. If you have enough income to cover your living costs, your budget will help you meet medium- and long-term financial goals and avoid short-term temptations. If you review your budget regularly and make adjustments when things change, you can rest assured that your income will last until the end of the month. That’s a good feeling!

Budgetberatung Schweiz

The Budgetberatung Schweiz (Budget Advice Switzerland) provides various budgeting tools. In addition to budget templates, you can find various sample budgets of different phases of life and incomes at or in the BudgetCH app. While the sample budgets may not fit your situation perfectly, they will give you a good overview.


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