Have you ever wondered how people in different countries and different economies manage their money? Salaries and expenses may vary widely from place to place, but the basic decisions on spending, saving and investing remain very similar. We’re looking at the financial management styles and decisions of people around the world, providing snapshots of budgeting methods in different environments. Today we’ll look at the finances of a young couple in Lausanne, Switzerland.
Lausanne is a picturesque lakeside town with an extremely high standard of living and quality of life. Many of the largest commercial banks and corporations in Switzerland have their headquarters in Lausanne, and the city hosts two of Europe’s most highly regarded universities. Export manufacturing and information are also prominent industries in Lausanne. The high standard of living comes at a price: Lausanne’s cost of living is among Europe’s highest, just behind Zurich and substantially higher than costs in Paris, London, or Berlin.
Did You Know
- The average take-home salary in Lausanne, Switzerland is CHF 89,065 (US$98,093)/year, or CHF 7,422 (US$8,174)/month.
- Swiss federal income taxes are relatively low, with a maximum 11.5% tax rate in the highest tax brackets. Social Security, health insurance, and other contributions are deducted at the source. Deductions reach 25% of the average paycheck.
- The unemployment rate in Switzerland is consistently low and remained under 4% even at the peak of the COVID-19 pandemic. It’s currently 3.6%.
- Switzerland has a private but heavily regulated health insurance system with mandatory coverage. Basic health insurance premiums average CHF 350 (US$385) for an adult and annual out-of-pocket healthcare expenses average CHF 1300 (US$1,431)/year .
What Does it Cost in Lausanne, Switzerland?
- 3-course meal for 2, mid-range restaurant: CHF 115 (US$127)
- Beef round, 1 kg: CHF 53.83 (US$59.29)
- Domestic beer, .5 liter: CHF 8 (US$8.81)
- Broadband Internet: CHF 59.86 (US$65.93)
- Cinema, 1 seat: CHF 20 (C$22.03)
- Monthly public transport pass: CHF 74 (US$81.5)
- 3 bedroom apartment, city center: CHF 2,985/month (US$3,288)
On the “Big Mac Index” Switzerland is the most expensive of 56 countries surveyed, with the iconic burger costing the equivalent of US$7.29.
Getting to Know the Household
We started our interview with some basic questions about the household, their lifestyle, and their approach to managing their finances.
Introduce yourself – Tell us a couple of things about yourself so we get to know you better.
I am a 26-year-old Information Sciences student living with my girlfriend in Lausanne. I work and study part-time.
Location – Where do you live (city, country)? What kind of place is it? How do you like living there?
I live in Lausanne, Switzerland. It’s a large city in Switzerland with 2 great universities (University of Lausanne (UNIL) and the Federal polytechnical school of Lausanne (EPFL)) situated on the shore of the lake of Geneva.
Household structure – How many adults, kids, what ages?
Occupation – What do you and other adults in the household do for a living?
I am an Information Sciences student and work part-time as a software engineer. My girlfriend is an architect.
Net household income – What is the take-home pay of your household (income after taxes and other deductions)?
6,500 Swiss Francs per month (US$7,159)
How would you describe your standard of living? – Based on the place you live in, your income, compared to other people around you…
Transitional between student and working adult. We have a slightly higher living standard than most of our friends and colleagues.
What is your approach to managing your finances? – What is your general approach or personal philosophy on managing your finances? Do you use a budget and if you do do you generally stick to it? How do you make financial decisions in your household?
We have been living together for 5 months now and have not yet defined a budget. We have been tracking our expenses though and we usually spend about CHF 1000 (US$1,101) on food. Food is definitely the biggest expense. This is due to the price of food in Switzerland which is abnormally high.
Let’s Break Down the Expenses
Now we’ll break down our respondent’s monthly household expenses into different budget categories.
CHF 1,530 rent
CHF 30 for insurance
CHF30 for news media tax (tax each household has to pay if they have access to media/internet, a way of financing news outlets to keep them free of corruption).
CHF 100 for heating, water, and electricity
CHF 40 internet.
CHF 45 and 40 for cell phones
CHF 900-1000 for groceries
CHF 100 for takeout
CHF 50 for alcohol
CHF 230 each for a nationwide public transportation pass. We do not need or own a car.
👗 Clothing and personal care
CHF 100 each on clothing
CHF 50 each on cosmetics
CHF 50 each on barber/hairdresser
🧹 Household supplies
Mainly cleaning supplies. Furniture is not a monthly expense.
CHF 750 for my medical insurance
CHF 500 for hers
Health supplements. Rest is mostly covered by insurance.
Hugely depends on the season. Spring to autumn is mainly
going to be going out (if COVID allows it) while winter will count towards indoor entertainment.
CHF 18 each for Apple One
CHF 10 for YouTube Premium
CHF 25 for Netflix.
Depends on other expenditures.
* All figures are as reported by respondents. Totals may not add up to 100%.
What are your thoughts on this couple’s budget? Let us know in the comments below!