Are we spendypants? RIP vs The Average Swiss

Hi frugal RIP friends,

In the previous post about my FIWE trip report I mentioned how I felt like being the spendypants of the party. After 3-4 talks about “how we live with 500 Eur in SUPPOSED_EXPENSIVE_CITY“, or “How to travel with 100 Eur in your pocket INSTEAD OF GOING TO MALDIVES, BITCH!“, or “How to save 70% of your salary WITHOUT YOUR FUCKING 20K+ AVERAGE MONTHLY TAKE HOME PAY“… I felt like being the elephant in the room.

Then I came back home, in rich Switzerland where everybody spends their salary off on luxurious vacations, extra useless insurances and cutting edge sport gears for sports they don’t regularly do.

And I felt, again, the good old cheap-ass-y RIP.

We don’t have a car, we live in a 50m2 apartment with no elevator, no dishwasher and no washing machine. I almost never bought a piece of furniture, I got 80% of our furniture from previous tenant for 300 CHF total. I almost never buy clothes and my beauty case only contains toothbrush, toothpaste and a soap (50% of the time coming from hotels’ courtesy kits). I cut my own hair and shave my beard every two weeks, reusing razors twice. I decline restaurants invite and cut grocery stores coupons. 90% of BabyRIP material comes from gifts or we borrowed from friends.

“… and?”

And we still spend a shitload of money for my standards. Average RIP family monthly expenses in 2018 so far are 5384 CHF.

Are we cheap? Are we spendy?

Finally we have some objective data to compare ourselves against!

I’ve found this nice budgetberatung (budgeting advice) site, which claims to use actual Swiss data! It covers several situation (single, couple, couple with 1-2-3 kids, single with 1-2-3 kids…) under different income situation. Perfect, let’s see how Swiss spend their money!

Sadly, the docs are in German, French and Italian but not in English. I’ll use the Italian one as a reference for this post.

Before we move on: the budgetberatung site contains “budgeting advices” and (translating from Italian) they claim that “our budgeting examples are based on average Swiss data”. What it actually means is a little bit obscure, but let’s not be super picky for now 🙂

Ok, income on the budgeting site for family with one kids ranges from 4250 to 9000 CHF/Mo. And here we have a problem: our income is way bigger than 9k per month. So far, in the first 6 months of 2018, our take home pay averaged above 20k CHF per month.

Let’s not dig deeper in how we calculate our take home pay but I want to mention it here again: gross salaries, minus expected income taxes and Pillar 1 contributions plus Pillar 2 employers’ matches (minus expected lump sum taxes on them). Why? Taxes and Pension Pillar 1 contributions are “not our money anymore”, while Pillar 2 contributions and employers matches are our money. We could cash them out under some circumstances like leaving Switzerland, buying a home or funding a company (paying a lump sum tax named kapitalauszahlungssteuer).

The budgeting tables claim to use “net monthly salary” but then I see an entry named tasse/steuern (taxes). I’m getting confused. Maybe “net” for a Swiss resident or a C permit holder means “what you get wired to your bank account from your employer”, which means Gross salary minus Pillar 1&2 contributions (I don’t see pension contribution entries in the budget suggestions). Taxes for a Swiss is considered a regular expense like restaurants, maybe.

Anyway, let’s of course jump on the budget for a family with a kid earning 9k CHF.

Our expenses can be found in our NW document.

• Rent: 2250. We’re doing great here. Our rent of 1385 CHF is on budget for a family with total income of 5-5.5k CHF per month.
• Taxes: 1200, depending per Canton. Confusing… Well, I’ll subtract taxes from the total.
• Health Insurances: 990. That doesn’t scale down with salary. It’s a fixed expense in the budgeting suggestion tables. We spend only 701 CHF in insurances and it bothers me a lot because it’s growing by 10% per person each year since 4 years. Anyway, apparently we’re doing great here too! We’re doing better than a family with 4250 CHF monthly salary 🙂
• Other insurances: 60. Maybe here we’re being naive. Everybody in Switzerland have some kind of extra insurance for domestic responsibility. We spend Zero on that.
• Utilities 140. This also apparently doesn’t scale down with salary in the tables. Well, we spend more here but with some caveats. We spend 114 CHF/Mo on Internet&TV, but Hooli reimburses 50% of it. We spend mandatory 450 yearly (37.50 CHF/Mo, going down next year I heard) on Billag, i.e. TV and Radio national “tax”. We spend less than 10 CHF/Mo on Mobile Phones. Mrs RIP uses Lycamobile 1G Internet for 5.90 CHF/Mo and we usually don’t call phones but use Skype for calls (sporadic 10 CHF top-ups, usually once per quarter) while my mobile plan is fully covered by Hooli. If we sum up our expenses we reach 160 CHF/mo but as I said, 57 are being reimbursed by Hooli. Btw, I have a TODO to check if our current plan with UPC Cablecom is still the best for us.
• Energy 80. Not sure why it’s not in utilities. We spend roughly 30-35 CHF/Mo in Electricity. We kick the 4250 CHF family ass too!
• Transportation 130. Doesn’t scale, don’t know why. And it says “public transportation”. Wait, I don’t see any car related expense here. Where I live a garage costs more than the budget for the entire category. Fishy… However, our monthly spending for transportation varies a lot, mainly because everything falls in this category: trains (we go to Italy roughly once per month), local transportation, car sharing, carpooling, taxis, uber, gas (for rented car or for in-laws car usage in Italy), tolls, parking… Plus Mrs RIP annual local transportation pass of ~800 CHF. It’s hard to extract a number. In last 24 months (since I started tracking our expenses in detail) we have spent 7603 CHF on transportation. It’s 317 CHF/Mo. And we don’t have a car and a garage. I bike to work 6-8 months per year. But I don’t believe this 130 per month includes car related expenses, it can’t be.
• Subscriptions 50. We don’t pay monthly subscriptions. No Netflix, no Spotify, no Amazon Prime, no YouTube Premium, no nothing. Thinking about Zattoo (and killing TV bills).
• Food, beverage and other domestic costs 1200. Our grocery expenses average to 600. I don’t know if this expense line includes restaurants. Even if it will, we’re at 6000 Family level 😉
• Personal expenses (shoes, clothes, haircuts, aesthetic treatments) 990. If we sum up clothing (82 CHF/Mo so far in 2018, mainly by Mrs RIP) and Leisure (283 CHF/Mo so far in 2018, including new smartphone, a concert, a trip to central Switzerland and a lot of books, an extraordinary leisure expensive year) we sum up to 365. Kicking the 4250 Family ass as usual.
• Extras 620. In this category of the suggested budget I see essentially medical expenses not reimbursed and gifts. So far in 2018 we’ve spent 179 CHF/Mo in these categories. Less than our friendly 4250 family.
• Available x other Discretionary expenses / Savings 1290. LOL. Add a zero on the right and that’s our average savings.

That’s how a Swiss Family of three is supposed to budget with 9k “net” income.

Comparing this to our budget I see something is missing on our side. For example we spent money on travel that are not budgeted here (ok, they are in the “savings”). We have a cleaning lady that I don’t see here. Is she a utility?

Apart from these minor ambiguity, average monthly expenses in 2018 for RIP family are 5384 CHF (sadly growing in last three months). The budget suggestion for the 6000 Family is 5400. We’re living like a family who earns 6k per month and saves 10% of it.

Given we earn more than 3 times the 6k family I thereby confer the RIP family the badge of honor in frugality and bla bla bla…

“Hey RIP, what a lame analysis! Budgeting suggestions on that site are based on a given income with the assumption of spending almost all of it!”

Well… actually it’s not true. You can see the savings portion growing more than linearly with income. But I agree, that doesn’t prove anything…

“Don’t we have actual spending data for Swiss couples available?”

Good point! Luckily we have better data available! Switzerland is really awesome with data, we have a Federal Statistical Office that publishes fresh data about households income and expenditure!

Their website is available in the three main Swiss languages as usual (sorry Romansh friends) and in English too. Sadly, the detailed tables are only available in the main Swiss languages.

The freshest data available are from a Households Budget Survey from year 2015 and can be summarized by this graph:

This graph summary shows income/expenses/savings mean values per household in Switzerland. I don’t fully get the details (what the hell are financial transfer income/expenditure?) and even the meaning of the data. Pensions, Employee Income, Self Employment Income and Investment Income are put together. It seems like the average household income is 10k CHF gross per month, but I assume situations are substantially different from Single person, SINK, DINK, SIWK, DIWK, retired couples and so on. And we’re talking about gross income and gross expenses (taxes and pensions / social security contributions are included). And why there’s a “sporadic income” entry in the expenses side?? Kind of a mess!

Let’s dig deeper on the expenditure side! The page is in English but the tables are in the three languages. I’ll use Italian as a reference.

First table we find is a detailed expense report by year, still aggregate over all Swiss households. Each tab in the spreadsheet covers a 3 years period (except the most recent one that covers 4 years, 2012-2015).

First fun facts: gross household monthly gross income went down in 2015, from 10079 to 9946. I suspect there are more single-person households thanks to heavy immigration or more retiree thanks to increasing life expectancy and population aging. I don’t know, the numbers are aggregated on a too large scale.

Anyway, average households expenses in 2015 were 6468.42 CHF/Mo. Here’s the split:

• Housing and Energy: 1458.01
• Transports:  758.91
• Health insurances:  721.32
• Food and drinks: 627.26.
• Restaurants and Hotels:  570.72
• Free time, Leisure, Culture:  557.07
• Health (not health insurance):  260.61
• Furniture and home maintenance:  235.35
• Apparel (clothing, shoes…):  221.75
• Gifts and Charity:  193.64
• Communications:  186.68
• Other Insurances:  185.77
• Alcohol and Tobacco:  107.74
• Other Taxes:  69.83
• Schools:  49.40
• Others:  264.34

According to these numbers, we’re still kicking some asses 🙂

But we can dig deeper! If you scroll down the household expenditure page you can find metrics by:

• Linguistic region
• Canton (only main cantons)
• Household Income range
• Age of reference person
• Kind of household (single person, single with 1-2-3 kids, couple no kids, couple with 1-2-3 kids)
• .. even some breakdown by age of the oldest child or some double breakdown by income and number of children!

This is heaven for a data geek like me! Of course I’d start my analysis complaining I can’t find my perfect breakdown (couple with one newborn child, in this particular canton, with this particular income) but let’s skip my complainypants instinct and check where we stand on each table.

I’m using the big Complete Table for years 2012-2014. Note that expenses are split in several macro-categories and I’m doing some math here to make apple to apple comparison with our expenses. I’m adding up consumer expenses plus insurances & other expenses EXCLUDING taxes, pension and social security contributions.

Plus, we’re looking at 2012-2014 data, which are on average 5 years old. Inflation has been very low on paper during last 5 years, but I can tell insurance premiums skyrocketed, public transportation tickets rose, rent increased and so on.

By Canton (tab 4)

Average monthly household income in my canton is slightly above 10k CHF gross. Better than the global average of 10063. I expected much more, since my canton is highly productivity, but I suspect there are a lot of single person households here, and that brings down the metric.

Average monthly household expenses in my canton are ~7000 CHF. not much left for saving if you consider taxes and social security contributions!

That’s great, we’re kicking asses by 1.5k to the average same-canton family!

Problem with this metric: we’re averaging over household kind (single, couple, family of 10, retired people…), income level and age.

By Age of the reference person (tab 11)

Cmon, Swiss! Tell it! By age of Der Mann. Switzerland is very traditional. I’m kind of surprised by their political correctness here. Well, there are households composed by a single female person, they couldn’t have said differently. Anyway, I and Mrs RIP are in the same age range here: 35-44, sadly getting closer to the right than to the left of the interval 🙁

Average monthly household income for households whose reference person is in 35-44 range is 11458.96 CHF (not bad). It means our age range performs better than the overall households average of 10063

Average monthly household expenses for households whose reference person is in 35-44 range are 7146.54 CHF. We’re the spendy generation, but we (the RIP family) still kick asses!

Problem with this metric: we’re averaging over household kind (single, couple, family of 10), income level, canton…

By Income (tab 12)

Here I want to laugh! Let me see how households who earn as much as we do squander their hard earned money! We are in the upper bracket, which I assume is very long-taily and sparse.

Average monthly household income for households whose gross income is above 13688 is 20302.26 CHF. The bracket is “above 13688 gross per month”, but the average income in that bracket is above 20k!! We’re just averagely rich. Welcome to Switzerland.

Average monthly household expenses for households whose gross income is above 13688 are 10489.02 CHF. We kick asses by a factor of 2!

It might be interesting to check where this money goes, but it’s already 2.5k+ words in this post, so go check yourself 🙂

By Kind (tab 13)

Let’s compare with families with kids.

Average monthly household income for families with kids is 13643.62 CHF. Wow, do Swiss people send kids to work? 🙂

Average monthly household expenses for families with kids are 8639.66 CHF. Well, if they aren’t they should! Kids are expensive!

Anyway, what a coarse table! Can we do better?

By Age of the oldest child in couples with kids (tab 41)

It’s a good proxy for our family situation. It’s not possible to specify how many kids, but if your oldest one is less than 4 years old good chances are that it’s a family with 1 or 2 kids.

Average monthly household income for families with oldest kid age 4 or less is 11569.99 CHF. 

Average monthly household expenses for families with oldest kid age 4 or less are 7692.22 CHF. Do they count childcare in this number? Full time Kinderkrippe for a child 0-4 costs between 2.2k and 3k per month!

Still kicking asses though 🙂

Last one:

By number of kids in couples with kids (tab 43)

Average monthly household income for families with 1 kid is 13005.94 CHF. Ouch, a lot more than couples with oldest child age 4 or less! Of course, within these households there might be old bankers & board members with a 20yo daughter still at home. I don’t know if this breakdown is more or less representative of our situation compared to the previous one.

Average monthly household expenses for families with 1 kid are 8200.65 CHF.

Still kicking asses 😉

Conclusions

Our average income is ~20k CHF, our average expenses in 2018 so far are ~5.4k CHF (trending toward 6k though).

By every possible way you can slice and dice 2012-2014 data we’re well above average income and below average expenses. The data breakdown closer to our situation is probably “families with kids age 4 or less“. We earn more than double than the average (in their average gross income there are taxes and pension contributions) and spend 30% less than the average. Actually 30% less than they were spending 5 years ago!

We can surely do better, but it’s also time to celebrate a little bit. We’re not spanypants, we kick asses.

TL;DR

We kick asses.

Have a nice weekend 🙂