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Setting up a budget

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Lesson time
3 min.

In this lesson you will learn 💸

  • What a budget is
     
  • What tools you can use to set up your budget

What is budgeting?

Budgeting is the process of creating a plan to spend your money. Your budget usually operates on a monthly basis and details all the income and expenses in your current financial situation.

It's time for a quiz 🎯

What is the main benefit of having a budget?

😕 That's not quite right

Your budget is a tool that provides your money with the necessary direction for where it should go. Unless absolutely necessary (for example if money is super tight), it should not control you. You are in charge of your budget and your money. 

👏 Correct!

A budget helps you to ensure that you can fit in the things you want, as well as the things that you have to do.

😕 That's not quite right

Your budget is a tool that provides your money with the necessary direction for where it should go. It'll help you to put money aside and avoid unnecessary money wasters. But it won't make your money grow automatically as it does not provide any return on investment. 

What should I include in my budget?

Remember the 50-30-20 rule? Here are some examples of what should go into your budget:

Budget pie chart with 50-30-20 rule

How often should I review my budget?

  • When starting a budget for the first time, you should get into the habit of reviewing it pretty regularly, e.g. monthly.
     
  • Keep track of your budget with a budgeting app, in your e-banking account or in a spreadsheet.
     
  • Once you get into the habit of budgeting, it makes sense to do a larger review every three months or at least once a year.

Tip 📌

One of the easiest ways to review your budget is when you're checking your bills and direct debits.

Budgeting tools ⚒️

We’ve looked at lots of free budgeting apps and online tools, and here are some that we think are worth your time specific for Switzerland:

If you prefer a good old excel spreadsheet, find our budgeting calculator next.

SmartPurse Calculator: Budget like a Pro

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Your action 📝

  1. Pick a budgeting tool (app, card, spreadsheet).
     
  2. Set up your budget.
     
  3. Decide how frequently you want to re-visit your budget and either create auto-alarms or calendar reminders to make the necessary time.
Ready to test your knowledge?
Finish this lesson and get rewards🏆
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