Welcome, Money Essence Readers! ✨

Before You Start – An Important Disclaimer!

This chapter is meant for absolute beginners in personal budgeting in Switzerland.

If you already have a good overview of where your Swiss francs go – feel free to jump to the next stage!

🤔 Why does this even matter?

You know, not being aware of how our spending actually looks is common. I wanted to write that it's "normal" – but no. In my opinion, it shouldn't be the norm.

High living costs in Switzerland (rent, transportation, health insurance) make it so easy to lose track of our spending. Even if you’re not living paycheck to paycheck, you might still feel like you’re not moving in any financial direction.

That’s where STAGE I of your Freedom Budget begins – understanding yourself and your money.

Realizing where my money actually went helped me save hundreds of francs every month and start building my safety cushion.

4 Key Elements of Personal Budgeting

When starting your personal budgeting journey, focus on these:

1. What categories are you spending your money on?
2. How much do you really spend each month?
3. Do your financial priorities match your values?
4. And most importantly — how do you feel about what you discover?

My Own Swiss Budget Story

Realizing where my money went changed everything. I started saving hundreds of francs every month and finally began building a true financial cushion.

I was lucky – life never forced me into debt. I could start everything calmly. But even though I wasn't living paycheck to paycheck, I felt like nothing was happening. No progress.

After a few years of ups and downs in Swiss reality, I created my own system – Freedom Budget.

STEP I – Expense Analysis 🔎

👉 Take your bank statements from the last 3 months (PDF or printed). If you don’t have s statement, you can find a printable table in the PDFs available after joining my newsletter - so you can fill it out yourself.

👉 Grab some highlighters or use a PDF editor to color-code your spending.

👉 Dedicate 2–3 days to this step.

Example categories:

• Groceries & food (Migros, Coop, Aldi)
• Bills (rent, Stromrechnung, internet, Krankenkasse, Swisscom, Sunrise, Salt)
• Transport (SBB, local tickets, car)
• Lifestyle & fun
• Clothing & shopping

Mark each category with a different color. Go expense by expense through 3 months. Check receipts in Migros or Coop apps if you don't remember specific purchases!

Really, give yourself time and space. A task done properly once will pay off in the future.

Come on, you’re finally doing this for yourself! 💪

Different Levels of Budget Detail

In the study How Consumers Budget by C. Yiwei Zhang and others, researchers found that people organize their budgets with very different levels of detail. Some keep it simple, dividing expenses into just a few broad categories, while others break everything down to the smallest items. The examples observed in the study ranged from very general to very specific:

• Necessities, Discretionary
• Housing & Transportation, Food, Discretionary, Other
• Housing & Transportation, Food, Entertainment, Clothing, Other
• Housing, Car, Groceries, Dining Out, Entertainment, Clothing, Other
• Rent, Utilities, Cell phone, Car, Groceries, Dining Out, Movies, Travel, Clothing, Other
• Rent, Utilities, Cell phone, Internet, Car, Groceries, Dining Out, Movies, Travel, Clothing, Exercise, Healthcare, Other

This shows how differently people think about budgeting - from a few simple categories to a detailed breakdown of nearly every expense.

STEP II – Summary Table 📑

Transfer your expenses into a spreadsheet (Excel or Google Sheets).

⏰ Time needed: max 2 days!

Your monthly average will help you plan ahead - crucial in Switzerland, where life is pricey! 💰

STEP III – Where Are You on Your Journey?

Calculate this simple formula:

👉 Monthly income – Monthly expenses = Savings

Easy, right?

Now, here are 3 possible scenarios:

🔴 Scenario 1: Financial Challenge

• Expenses > Income
• A feeling of being trapped financially (especially tough in Switzerland) - state of financial slavery
• Action: Change your habits ASAP!

🟡 Scenario 2: Status Quo

• Expenses = Income
• You're not sinking into debt, but not saving either
• Typical situation for many people in Switzerland
• My beginning: ~150 CHF monthly (unsatisfying at age 30!) 😅

🟢 Scenario 3: Swiss Success!

• Income > Expenses
• Congratulations – you’re on your path to financial independence! 🎊

These three stages help you see where you stand.

STEP IV – Reflection & emotions

Being in the first scenario can feel tough. But recognizing that things aren’t right - that’s already a win.

Now’s the moment when motivation kicks in.

Sit down with your notes and reflect on these questions:

• ❔ Which expenses surprised me the most? (often insurance or eating out)
• ❔ What did I buy impulsively and why? (cross-border shopping in Germany?)
• ❔ Which expenses were completely unplanned?
• ❔ Do sales or ads influence my decisions? (Migros deals, Coop promotions, influencer marketing, sales at Manor or Globus)

Awareness is the first step toward financial peace.

Why Budgeting Isn’t Just About Numbers

Your budget is deeply emotional.

If it were pure math, we wouldn’t see so many bankruptcies – even in wealthy Switzerland.

I want your budget to not hold you back, but give you opportunities. That's why there's a big emphasis on the first stage – understanding your own spending.

Summary

Your first step toward personal budgeting:

✔️ Analyze your expenses

✔️ Summarize them in a table

✔️ Reflect on your emotions and habits

This is just the beginning of your Freedom Budget journey

👉 What’s Next?

In the next stage, we'll tackle irregular expenses – from annual premiums, through vacation trips to the Alps, to unexpected costs!

💬 Got questions? Share them in the comments – let’s build a community of financially aware expats together!

With pride,

– ME, your Freedom Budget guide ✨