Finally, your own apartment! A dream come true, but is your apartment more expensive than you originally thought?
Before looking for your own place to live, it is important to take a close look at certain costs. Insurance, housing costs and taxes often account for the highest proportion of expenditure. What percentage of your income should the rent take up, so that at the end of the month it’s not spaghetti for dinner again?
One rule of thumb is that not more than a third of one’s income should be spent on rent. Since this rule, however, refers to the gross income including utilities, this maximum amount of one-third should only be utilized by someone who has no debt and has a secure income or even promotion opportunities in their career outlook.
The Swiss budget consultancy even recommends that rent should not exceed one quarter of the salary paid (net wages). If your rent is too high compared to your wages, then you should be looking for either a new home or a new professional challenge.
Desires and dreams for your own home or career can be assessed financially by drawing up a personal budget. Write down your income and expenses. You can find this information on salary statements, insurance certificates or on your last tax return. Round up to even numbers. This creates a little leeway for reserves. Being honest about your household budget is a great help because housing will eat up the biggest portion of your budget. Don’t lose any more sleep worrying about bills!
Housing costs and wages
You will quickly see that a good salary does not automatically mean that you will have vast amounts of money reserves at your disposal. The two following examples of housing budgets show what should be included in the monthly bill.
ZH, computer scientist and student (26) who is working full-time, is living with his girlfriend (26), who is a student and part-time employee in HR
Joint monthly income: an average CHF 8,300.-
Apartment (rent, utilities, insurance): CHF 2,650.-
Household items (food, cleaning products, Billag (costs related to taxes paid on telecommunications and electronic devices in the home), etc.): CHF 750.-
Taxes: CHF 1065.-
Communication (phone, TV, Internet – Sunrise/Salt –, Spotify, Netflix etc.): CHF 260.-
Health insurance (including franchise, deductible): CHF 1,200.-
Public transport subscription (GA): CHF 435.-
Tuition fees: CHF 435.-
Extraordinary (dentist, contraceptive pills, gifts, leisure time expenses, etc.): CHF 450.-
Savings/vacation fund: CHF 1,000.-
Total average monthly expenses total approx. CHF 8,245.-
AG, married couple with baby (9 months old), husband (29) employed full-time and wife (28) works about 28 hours a week. Both are employed in the field of education.
Joint monthly income: on average CHF 9,655.-
Apartment (rent, utilities, insurance): CHF 2,550.-
Household items (food, cleaning products, diapers, Billag (costs related to taxes paid on telecommunications and electronic devices in the home), etc.): 1,000.-
Child (clothes, extraordinary, etc.): CHF 100.-
Taxes: CHF 1,550.-
Communication (phone, TV, Internet – Swisscom –, Spotify, Netflix, etc.): CHF 320.-
Health insurance (including franchise, deductible): CHF 1,135.-
Car: CHF 400.-
Occasional expenses (dentist, occasional doctor visits, gifts, leisure time expenses, etc.): CHF 600.-
Savings/vacation fund: CHF 2,000.-
Total average monthly expenses total approx. CHF 9,655.-
Of course, priorities can vary from person to person. One person may place more value on a large, spacious apartment, while another prefers to put aside enough money for a vacation. It is important that your monthly income covers all your monthly expenses. For greater security—follow the 25% rule!
If your rental offer does not live up to your expectations, it may be worthwhile to look for one or more roommates, move to another city, or change jobs. If the decision to stay in spite of higher housing costs might mean you need to earn more income or, to cover other large costs, you might need to ditch the car.