Saving money: a comprehensive guide

Live in the here and now or save for the future? Many of us find it hard to balance our long-term goals against our short-term needs. At the same time, we know we need a financial cushion for when life doesn't go as planned. This can happen all of a sudden. An unforeseen event, such as illness, an accident or the loss of a job, can hit us at any time and can be very expensive and financially stressful.

But we don't always want to save for an emergency. After all, there are other good reasons not to live from month to month – and some very valid savings goals: Do you want to take the plunge into self-employment? Buy a new car? Take a longer holiday for a change? Or move to your own home in the near future? No matter what life brings: a financial cushion can provide relief in many situations, and may even open up new opportunities.

Rather than setting goals and starting your money-saving adventure full of good intentions but with very little planning, it makes sense to assess your current situation. You need a clear picture of exactly how much money is coming in and how much you are spending on food, household, leisure activities, insurance, etc., before you can decide which adjustments you can and should make to spend your money more wisely.

Where did my money go? Identifying money pits

“I don't know where all the money went” – does this sound familiar to you? You're not alone. We often believe that we spend less than we actually do and then wonder where all the money went at the end of the month. The only way to get clarity about your own financial situation is to make a realistic list of all your income and expenses. This is the only way to clearly and effectively see which items are gobbling up your money each month. Don't forget the smaller expenses. It is the small spending on a coffee here or a snack there that can often put a strain on your budget without you noticing.

Fixed costs

These include apartment rent, taxes, health insurance contributions, household and vehicle insurance, mobile phone contracts, heating and electricity costs, but also payments for childcare.

Variable costs

These includes one-time purchases or recurring expenses that vary in price. For example, food, hygiene items, clothing. If it helps, make a distinction between basic requirements (what you really need) and optional requirements (things that are nice to have).

Tracking made easy – keep up to date by always paying digitally

More and more people are paying only by card or smartphone. As a result, we are more easily tempted to spend our money. Seeing physical cash leave our wallets when we pay for a new T-shirt or our supermarket shop, for example, often makes us much more aware of the purchase than when we just swipe our card or do our shopping online. On the other hand, people who only pay digitally can easily track all their expenses online. This is because your purchases are conveniently tracked automatically when you only pay digitally.

Some tricks for minimising expenses

Tell your money where to go instead of wondering where it went. You may have already noticed when listing your expenses: we often unthinkingly incur unnecessary expenses that add up to significant amounts in the long term – even if the products themselves are not expensive. Read the article “How the 50–30–20 rule helps you save” and find out how you can better manage your finances with a simple breakdown of fixed costs, wishes and savings goals.

Where should I spend my money? Manage your money with a budget

You can't do without a budget – not if you're serious about saving money. Understandably, the thought of sitting down and creating a realistic budget may not sound too exciting to many people, but it is vital if you want to get more out of your money. It's not that hard: for information on how to create a household budget in five easy steps and how to spend your money in a more targeted manner, see our article “Budgeting made easy: five tips on budget planning”.

Create a list of your subscriptions and avoid unnecessary costs

More and more companies offer subscription models for their services – from streaming providers to telecommunications companies to meditation apps. Review them on a regular basis, (once a month or every three months). Do you really use all the services you subscribed to or did you intend to cancel them after the free trial period? Can you share streaming service subscriptions with family or friends? You should also check regularly whether you can get cheaper rates for comparable services from other providers and, if necessary, change your TV, Internet and telephone provider.

Many people find it difficult to save without a specific goal. After all, temptation lurks everywhere in everyday life, trying to get us to spend our hard-earned cash instead of saving for bigger dreams or an emergency buffer. This makes it all the more important to define clear and realistic goals that motivate you to resist temptation a little more often and put money aside on a regular basis.

Make sure you set your sights on smaller intermediate goals that you know you can achieve. This way, you reward your brain and boost your morale – hopefully without resorting to an expensive shopping spree – and stay motivated. You can approach your long-term goal on a step-by-step basis.

Why only smart goals lead to success

Be smart, define your SMART goals. In this context, SMART stands for Specific, Measurable, Achievable, Reasonable and Time-Bound, an acronym coined by management researcher and consultant Peter Drucker. In other words, to be successful you should have clear and very specific goals. Therefore, a goal like “I want to spend less money”: Not great! “I want to save 10,000 francs by 1 August”: Much better!

Clear goals keep you motivated, especially when you frequently set smaller goals. Every time you achieve one of your goals, you have a sense of achievement and you generate momentum, for example, by setting a new SMART goal every month (e.g. “In March I want to make 500 extra francs by selling old things”). When you achieve a goal, set yourself a new one right away – and never lose sight of the overall goal of saving more money.

While some people find it easy to stick to a strict budget, others need some leeway so they can treat themselves to a little something from time to time. Some have no problem doing without takeaway food and visits to restaurants, others prefer to cut down on clothes shopping, while some people save on entertainment and recreational expenses. We are all different, just like our various desires, goals and relationships with (spending) money. So, too are the techniques we use to make it easier to save money. What works for others, might not work for you. Try different strategies and ideas, and find the ones that help you to save money every month.

Save where it makes sense

The easiest way to save money on your taxes while also providing for your future is, of course, by making annual payments into your pillar 3a account – ideally, you should split the annual maximum amount over 12 months and transfer the monthly contribution directly to your 3rd pillar account. You can use our online calculator “The link will open in a new window Tax savings pillar 3a” to calculate how much money you can save in this way.

Saving in everyday life: shop smart, eat well

As well as insurance premiums, rent and similar, the “Meals” category, in particular, is an area where you may be able to save a lot of money in everyday life. If you spend too much money on take-aways, snacks, dining out and groceries in general, there are many good tips on eating well, healthily, and cheaply. In general, it makes sense to cook for yourself rather than eating out. This saves money and also ensures that you eat healthy meals more often – provided, of course, you have some basic cooking skills and know how to shop smart: buy ingredients rather than processed foods or ready-made meals, and avoid branded products. Most supermarkets offer “white label” products – some of which are even manufactured in the same factory as their branded counterparts. You can also find other practical ways to save in the article “How do I save money on my household budget? Take care of your household budget with these nine finance tips”.

Just sleep on it

Impulse purchases can quickly become very dangerous – especially if the product is expensive for you. Online shopping in particular can be quick and convenient: you can place an order with just a few clicks. You should therefore limit the amount you allow yourself to spend on spontaneous purchases, and take a night to sleep on every unplanned purchase beyond that limit. This gives you time to consider whether you really need the product or whether you are just overcompensating for an emotional impulse. Emotional shopping can hurt your budget.

“Me, me, me!” – put yourself first

Planning on having a certain amount left in your bank account at the end of the month – but it all seems to have disappeared despite your budgeting efforts? To prevent this from happening, always pay yourself first. Budget your realistic monthly savings amount and transfer it as soon as you get paid – either to your savings account, your emergency account or even to a funds savings plan on which you can earn interest. To find out about a funds saving plan, see the video “What is a funds saving plan”.

Bye-bye Instagram

It is probably impossible to avoid seeing any advertising at all. After all, it's not just on billboards, in newspapers and on TV, but all over the Internet and on social media. However, you can avoid advertising somewhat by unsubscribing from all newsletters from online shops – after all, we often subscribe to them just to get a discount on our first order, don't we? If you want to go further, you can delete Facebook, Instagram, etc., reducing exposure to ads and influencers and thereby minimizing the desire to buy new things.

Save without sacrificing: How to save and still enjoy holidays and luxury goods

If you save with a clear goal in mind, you may have to do without a few smaller things for now. This means, however, that you will be able to afford something bigger and often much more fulfilling in the future that you otherwise wouldn’t have had, such as a long holiday, a new car or the long-held dream of owning your own home. And even luxury goods don't always have to be out of reach despite major goals such as your own house or a trip around the world. Depending on your budget and financial situation, you can set aside small monthly amounts to use on your birthday for a long-desired treat. Sometimes those luxuries can be just as good second-hand. After all, a high-quality luxury product is made to last and is still worth having second-hand – whether it's a designer bag, an expensive watch or even a car.

Get more from the 3rd pillar – achieve financial independence, home ownership or move abroad sooner

The money you pay into your pillar 3a account every year can be paid out early, for example, to buy your own house or apartment, set up your own business, or if you emigrate. So far, so good. With clever planning for these long-term goals you can get the most out of your retirement assets not just by putting them into your pillar 3a account, but by investing them in a retirement fund. By doing so, you earn additional interest that's worth real money when you cash out. Find out why a retirement fund can be worthwhile compared to a pillar 3a account in the article “How to get more from your retirement planning”.

“I'm just not a saver” – “Saving is so difficult” – “I've tried, but...” – Sound familiar? Look at saving as an opportunity to get to know yourself a little better and to analyse and understand your behaviour in general. Not only will this help you when it comes to saving, but also in completely different areas of your life. The journey to your savings goal can also be a journey to discovering yourself – all without getting on a plane.

Reflect on your behaviour and avoid spending traps

We know it all too well: For a few months we pinch every penny, plan our meals meticulously in advance, cook fresh and cheap, deny ourselves smaller and larger cravings – and then comes the phase where we fall back into our old habits, stop sticking to our budget and maybe end up living more wastefully than before. Use these phases to observe your own behaviour: Why did you lose your discipline? Did situations, people, or changes in your life trigger this behaviour? Think about it, write down when and why you made the wrong financial decisions, and get to know your weak points. The better you understand your own behaviour and decisions, the easier it will be for you to stay disciplined and to avoid this behaviour in future.

Spend your money where you spend your time

If you make radical cuts to all supposedly unnecessary expenses and no longer indulge in any of the small joys of life, you will soon return to your old spending habits and drop all your ambitious goals and good intentions – this can quickly become expensive. It is important to be clear about what gives you the most pleasure and to set some money aside for it, instead of spending money out of sheer habit on things that do not make you happy in the long term.

Time is money – and money is time

What is money? Particularly in the digital age, when we often only come into contact with money as numbers on a screen, money can soon become an abstract concept. It comes and goes, month by month, without us knowing exactly where. But some people have a fuller understanding of money – they appreciate the value of it, spend consciously, are fully aware of their financial options, and know what they are saving or spending their money on. The following tip, for example, can help you become that kind of person instead of someone who takes a more you-only-live-once attitude to their finances: Calculate your hourly wages and think about how many hours you had to work to earn it before you spend it on a pleasure purchase. Or you can ask yourself: If someone offered me the money that this product costs instead of the product, what would I do? Would I take the money or the product?

Say goodbye to your "future self"

“Those stylish jeans may be a size too small, but I made up my mind to lose weight anyway.” “I've never made smoothies before, but I'll definitely have one every day this summer.” “Those new high heels will make me look like a supermodel, even if I usually only wear trainers.” Do any of these statements sound familiar? Many of the things we buy aren't for us at all, but for our perfect “future self” – a person who only exists in our imagination who is smarter, fitter, more beautiful, healthier and more popular than we are. Don't fall into this trap – before making any purchase, ask yourself whether the product you want is a match for your current everyday life, or whether you're buying something for someone who isn't really you. Things that you don't use now are things you don't need now.

Stay mindful of your budget and the environment

What’s important to me? Security? Success? Helping others? Freedom? Reflect on the things that are important to you in life. And ask yourself whether you're really spending your money on things and experiences that match your personal values.

Both your budget and the environment will thank you when you align your spending with your personal values and use your money for the important things in your life.

Don't worry, we're past the days of savings books and estimates scrawled on the backs of envelopes. Fortunately, you now have access to all kinds of digital tools that make it easy for you to save and, if necessary, can even force you to stick to your budget.

Limit your expenses completely automatically

Creating a budget may be easy, but sticking to it can be a different matter. Fortunately, you can set up withdrawal limits that define how much money you can withdraw or the number of goods you can buy each day. Setting up standing orders and paying invoices on time also help you keep your finances under control. Read how you can do this quickly with the QR-bill in the article “Find out how to pay QR-bills or create them yourself”.

Keep an eye on your finances at all times – with push notifications

My account's running low – Oh no! To avoid this experience, you can set up automatic push notifications that keep you informed about transactions or limit violations.

Automate your savings with standing orders and a funds saving plan

Saving is especially easy if it happens automatically. A standing order is the perfect tool for this: a certain amount is transferred to a different account on a fixed day every month. You can use this to automate payments to your savings account. Tip: Ideally, you should have the savings amount automatically transferred to another account on the same day you receive your wages. True to the saying “out of sight, out of mind”, you won't even see the savings amount in your private account so you won't be tempted to spend it. We explain how to set up a standing order in the article “Standing order: for regular payments”. Of course, the same applies to your funds saving plan – with an automated payment, a certain amount is invested directly in a fund every month. It's very easy to set this up in “Fund self-service”.