Author Topic: Swiss 'stache: Let's talk frugality in the most expensive country of the world  (Read 9739 times)

Grog

  • Bristles
  • ***
  • Posts: 296
As promised to the swiss fellows in the investor section, here the topic for us to talk frugality here.

To be honest, the title is misleading: while for many index/table Switzerland is really one of the most expensive country, I do think that is possible to be really frugal and come out ahead.
The main problem I see is that not only COL is really high, but swiss people are expected to be, well, rich. And to spend. Keeping the right balance is not easy.

Personally, I think I've developed my frugality muscle early thanks to my students life: I had a total yearly revenue of less than 20'000 chf (only exclusion health insurance, paid by my parents) during my 5 year in the university in Zurich. Living with less than 20'000 chf in Zurich it ain't easy, but doable. And you learn a lot about frugality.


So you any of you swiss fellows as a special trick dialed down? How are your budget? I'll start with mine:

Me: 28 y old, male, live with my gf in the centre of a medium sized town in Switzerland, 5 min from the station.
Salary: average of 5700 chf per month, including the 13.th

Rent: 875 chf per month for a 120 m^2, 4.5 apartment, shared with GF
Shared expenses: (internet, utilities, phone, vacations etc): for the moment an average of 150 chf per month
Groceries: 150 chf per month

Health insurance: 195 chf /month

Smartphone: 25 chf/month

Total: 1545/month

Transportation:
Public transportation: 300 chf/month, free access everywhere inSwitzerland (general abo)
Mobility (sort of a rental, cars are parked in the train stations): ~60 chf per month
Bicycle pass for train and bus: 18 chf month
Bicycle maintenance: ~10 chf month
Car contribution when a colleagues bring me to work: ~30 chf per month
Total: ~420/month

I don't have a car

Work expenses:
lunch, caffe: 140 chf/month

Hobby/personal expenses: 250-400/month

Total expenses: 2200-2350/month

Taxes:~800 chf/month

Total saving: ~2600 chf/month


EDIT: I counted my groceries two times
« Last Edit: July 08, 2014, 02:26:39 AM by Grog »

SwissStashelina

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Great thread!

Agree, COL in CH is high but from my experience having lived in 2 European countries and now CH, as a comparison you end up with a lot more savings capacity due to very high salaries here!

I'm curious about your groceries bill :)

This below is our total, monthly household budget: a young family with two adults and a baby & a dog. We live on the country side.

(in swiss francs, ignore the dollar signs :)

Groceries   Food   $800 (shop: Coop, we buy a lot of vegetables, beans, lentils, organic chicken breast and ground beef. Pretty much cook from scratch every day and no ready-made food. We drink a lot of coffee and love dark chocolate..)
Health   Insurance   $570
SBB railways   Transportation   $316 (this is how it will be shortly, will stop buying GA's, doesn't make sense with little travel to the big cities)
Mortgage or Rent   Housing   $300
phone & Internet   Housing   $300 (I know this could probably easily be in the area of 180)
Electricity & heating   Housing   $200
Clothing   Personal Care   $150
Dining Out   Food   $100  (this is more like a coffee/sandwich every now and then in the city)
Donations   Gifts and Charity   $100
Credit card 1   Loans   $100
Property   Taxes   $75
Food   Pets   $70
Water bill   Housing   $60
Taxi   Transportation   $60
Credit card 2   Loans   $50
children supplies   Children   $50 (lots of beautiful second hand clothes yay!)
Gemeinde   Taxes   $50
Mobility   Transportation   $45
Medical, health   Children   $30
Gondolas mountain, entries, cinema   Entertainment   $30
Medical, taxes   Pets   $30
Home   Insurance   $25
BBC app, itunes   Entertainment   $20
Grooming   Personal Care   $20
Spotify, music, books   Entertainment   $16 (working on getting a library card for e-books)
Total   costs   $3 567

I did a lot of research if it would make sense to buy in bulk from Aldi, Denner etc. even traveling to Italy or Germany but can't seem to make any bigger improvement to our grocery bill.. maybe 200 less if we didn't eat meat or didn't buy organic + free range eggs etc. but haven't found that tradeoff worth it. Also spending hours with coupons, researching or traveling to buy something 5 chf cheaper doesn't make sense to us. Any other tips are welcome!
« Last Edit: July 08, 2014, 03:38:52 AM by SwissStashelina »

Grog

  • Bristles
  • ***
  • Posts: 296
my grocery bill is twisted by the fact that during the weekend I'm more often than not back to my family and my parents won't accept any financial help while I'm there. The travel is 400 km one-way, so that's why a pass for the train (5 hours) still makes transportation for me quite cheap.

And I included my lunch cost under "work related expenses" so in the hand I'm giving out 150 chf for an average of 25 breakfast and 25 evening meal. I could probably lower this.

I usually don't buy meat and I live near an huge migros/denner (2 minutes walking) and I've notice that tuesday/wednesday evening and saturday evening they have huge sale on all the fresh products. That helps.

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
Grog, your stats look pretty healthy to me!

I assume you've done the maths about the GA - it's cheaper than buying a train ticket each time?

Why cut down the 'work expenses'? 150 for 30 meals is amazing!


What I find tricky about saving in Switzerland is that in nominal terms I can save quite a lot but in percentage of income terms it's quite low.
I mean, maybe I could save 500,000 CHF in ten years or whatever, but it wouldn't be close to financial freedom! In Zurich anyway.
However, I could certainly live off that and retire in anther country.

I assume you guys plan to stay in Switzerland?

luigi49

  • Bristles
  • ***
  • Posts: 291
Gruezi mitenand. 
 Crazy Street parade for entertainment.  Coop and migros have good sale on food.  Brokiland with a nice poster outside. :) 
« Last Edit: July 08, 2014, 08:06:53 AM by luigi49 »

Grog

  • Bristles
  • ***
  • Posts: 296
Grog, your stats look pretty healthy to me!

I assume you've done the maths about the GA - it's cheaper than buying a train ticket each time?

Why cut down the 'work expenses'? 150 for 30 meals is amazing!


What I find tricky about saving in Switzerland is that in nominal terms I can save quite a lot but in percentage of income terms it's quite low.
I mean, maybe I could save 500,000 CHF in ten years or whatever, but it wouldn't be close to financial freedom! In Zurich anyway.
However, I could certainly live off that and retire in anther country.

I assume you guys plan to stay in Switzerland?

I still don't know where I'll end up, but probably yes. Maybe not all year, but yes. Let's say I plan 9 months/y.

About train tickets: yep it's by far the cheapest option. Other than that, I can deduct it from taxes (since I don't have a car) for commuting purpose. Average cost of the pass is 10chf per day and I started tracking "what would my tickets cost"  and it was around 18 chf.

About financial freedom, it's not true what you say. The maths are similar with what MMM says: if you have save 75% of your pay, you reduce your cost of living and then it wouldn't matter.
The only difference is that in Switzerland, if you want passive income in chf and split your AA in swiss equity and swiss bonds, then your SWR is probably closer to 3% instead of 4%. On the other hand, we receive an hefty social security (AVS) of up to 28'800 chf per year starting from 65. I could live with that, so my capital must only sustain me for like 20-30 years (assuming retirement around 40).

With some efforts and sacrifice I could live in Zurich with 20'000 chf per year (alone without family), and that would be a total net worth of about 600'000.- (assuming 30x expenses)

Instead of going out, invite the friend over for a grill evening and home-brew beer. Avoid the club. Move with the bike. The usual stuff works in Colorado as in Zurich ;). The library is amazing in Zurich and we really don't need all the Bluewin TV/Horizon digital tv shit.

Smartphone: I had infinity XS with swisscom (59.- /month, crappy internet) and switched over to a dual sim with a swisscom prepay (for calls, I average 5 chf per month) and a second orange sim, for tablet, with 1GB full speed internet for 19 chf (use for sms whatsapp and so on). My total expense went down to 25 per month and I'm planning to switch from orange to sunrise 250 MB for 7.50/month, bringing the total down to 12.50.

There are a lot of workaround that can be exploited, just don't buy into mainstream shit.

Of course, I contniously revealuate my budget and if in the future there will be children, everything will be looking differently. But for the moment is doable.

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
Grog, I don't spend much money on stuff and since I started being careful about what I spend on food and drink I'm living (quite happily) close to my lowest possible budget.

In September I'm moving into a new flat which will cost 1300/month. If I'd become Mustachian before signing the lease I might have chosen something cheaper! But that's fixed for a year, and it's a really nice flat in a good location for work. Anyway, the flat plus other fixed bills and my half of the basic groceries budget comes to 2,600 a month. Realistically I'll spend 200 a month buying the occasional beer or sandwich. So my absolute base for the next year is 2,800. That doesn't count going to the dentist and whatnot. (I go to Konstanz :) )

If I earned UBS money I could retire in 7 years. Maybe 5! But I'm a poor English teacher and my average salary is about 4,500. I can increase that (and I'm working on it) but at the cost of giving up my free evenings and Saturday mornings and whatever.

So I'm optimistic but getting the 800,000 or so I'd need is a tough gig!

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
I've found a fast, frugal meal that's tasty enough to satisfy me for a few hours.

Denner has a pre-packed salad thing for 1.60
Migros has a yucutan salad for something around 2 francs

They both have bits of corn in and some variety of greenery. I dribble on a couple of tablespoons of balsamico (the premium one) and that makes it taste delish.
Seriously, that balsamico is to die for. It was about ten francs from Denner and it's giving me all these cheap meals.

blackomen

  • Stubble
  • **
  • Posts: 189
  • Location: Former Californian in Dallas
  • Antifragile since 1983
    • Gimme Serendipity (a Stumbleupon Clone)
I studied abroad at the Universite de Lausanne back in 2008..  my expenses were not that high:

Rent (dorm, might be much higher if it's an apartment): 400CHF/mo.
Public Transit Pass: 60CHF/mo.
Food: 300 CHF/mo.
Health Insurance: 80 CHF/mo.

Total base expenses: 840 CHF/mo. (Probably more like 1000/mo in today's CHF)

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
If I could pay that much I could retire in 5 years!

My main bills, not including stuff like dentistry:

Phone 30
Health insurance 198 (my income is low enough that I get some help and 'only' pay 130)
SVA (self-employed tax thing) 158
Tax 451
Travel 61
Halbtax (gives discount on travel) 12
TV license* (mandatory) 39
Electricity* 20
Internet* 73
Food and Groceries 400

The three with asterisks are shared with my gf, so I only pay half of that.

So let's call all that 1,300 a month.
Rent is exactly that much, so my monthly expenses are 2600 ish.

You might quibble that I shouldn't pay X or Y or that I could cut my costs on Z. But I'd be amazed to find someone living with something like my (moderate) standard of living for half the cost. If anyone can say how, let me know!

Keen

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Here's one neat thing I'm using to cut internet costs: Cablecom free internet. Basically, I have a box for cable TV included in my rent (Nebenkosten), so the basic charge of ~30 CHF is covered already. I paid 50 CHF once for a modem and that was it. The catch is that it's only 2 Mbps, but it's really solid, so it's even enough for streaming video if it's not full HD. Downloading anything large (Steam) is a pain though.

More info at Cablecom

Grog

  • Bristles
  • ***
  • Posts: 296
Here's one neat thing I'm using to cut internet costs: Cablecom free internet. Basically, I have a box for cable TV included in my rent (Nebenkosten), so the basic charge of ~30 CHF is covered already. I paid 50 CHF once for a modem and that was it. The catch is that it's only 2 Mbps, but it's really solid, so it's even enough for streaming video if it's not full HD. Downloading anything large (Steam) is a pain though.

More info at Cablecom

this is a good tip, often people look only at the number and want as many Mbps as possible, but not anyone need them. Since I have a dual-sim system (swisscom pre-pay for calls, orange only internet for surfing 1 gb) I have opted for a very hidden offer of cablecom for 25 chf/mo (I pay only half, other half is gf) that include a 5 Mbps internet and free calls on all ch-landline, that we use to call and be called by parents/relatives. This helps keeping my prepay down and there is the bonus of 2.5x the speed of the basic free offer. For 2 people is more than enough, even for online gaming/streaming/steam



A good tip about food: look for asiatc/world food grocery shop. I've found a couple of them that offer bulk quantities of bean/peas/rice/cous cous that are often waaaaay cheaper than migros/denner/coop. Since they are dried, they can be kept very long. It's probably only possible to find them in the big cities. Yesterday I've check two of them out.

Chinese: a part for the bulk rice (2 chf/kg) the rest was very expensive, more than migros. Kind of disappointed. The m-budget creole rice is still undefeated: 1.15 chf/kg!

World food shop: mostly indian and north-african.  Veery cheap. Price of beans/lentils is 50%/60% the one of migros, cous-cous is 40% cheaper (3 chf / kg compared to 4.5/kg) and one kg onion was 0.80 chf, compared to the 2.40 of migros is only 30%!

In these day I'm cooking extermely cheap: fry some onion and 2 carrots in a stir pan, add some water and cook 50 g of lentils, then when the water is evaporated add some 5-6 boiled potatoes (sliced up) for a very healthy, equilibrated meal under 1 chf ;) possibly under 0.60 chf too (0.15 for lentils, 0.15 for 200 g m-budget potatoes, 0.15-0.2 for carrots)

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
Is this one of you guys?

http://www.mustachianpost.com/

Astromarine

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Anyone done any research about bank accounts, credit and debit cards, and so on? I think I'd be interested in moving all my stuff away from UBS, now that I'm not throwing all my money at their shitty active funds they've started charging me for services again :D So I'm on the market for a banking platform for my day-to-day, and for cheap, preferably rewards-enabled, cards.

varepsilon

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Bank accounts: PostFinance doesn't charge you for an account if you have more than CHF 7'500 in total with them (including Pillar 3a). Many people using their banking and are pretty happy (I'm one of them).

Credit cards: SBB, Migros and Coop has free credit cards (the one from SBB is combined with the Half-fare card). These are just the ones that I have. PostFinance's credit card is not free, but it has a cashback (I don't have it, but I know a few people who really like the convenience of it).

These options are all for CHF. If you need to pay in other currencies this is a different story.

Okanager

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Here's one neat thing I'm using to cut internet costs: Cablecom free internet.

It's "free" in that you're already paying for it! :) It's likely hidden in your Nebenkosten, but you aren't required to pay if you don't want it:
  https://www.mieterverband.ch/mv/mietrecht-beratung/ratgeber-mietrecht/top-themen/tv-internet.html

Fuzz

  • Bristles
  • ***
  • Posts: 331
What's your industry? I dated a girl from Zurich for a brief period and your expenses actually seem pretty low to me. Just buying a loaf of bread, cheese, an apple and chocolate was 20 francs. Can you do anything to boost your income? Are you going to get raises?  What can you do on the income side of the equation? That seems low from what I know about Switzerland.

Ralph

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Hello fellow Swiss Mustachians!


I moved to Switzerland a few years ago and discovered MMM in 2013. Although I've always considered myself frugal, MMM opened my eyes in many ways.

But let me tell you a thing or two about my situation first. I'm 36 years old.
For four years, my wife and I have been earning about 240000 CHF together per year (after taxes). We saved about 60% of it. Which sounds good, but also means we spent about 8000 CHF per Month. This included some very nice vacations in the U.S. :)

After carefully analyzing and cutting our expenses, we now spend about 6000 CHF per month. Even though we moved into a more expensive apartment because of our first child.
Or monthly spending looks roughly like this:

  • 3500 rent & utilities (3100), furniture, TV, phone etc.
  • 1000 food
  • 750 health
  • 250 car
  • 500 everything else (hobbies, travel, gifts, child stuff)

Because my wife does not earn any money this year, our savings rate dropped to about 40%. But she will start working again next year. Child care for three days per week will cost about 1500 per month. Our savings rate will hopefully rise above 50%.

We invest our money in a self-managed ETF portfolio, "Pillar 3a" accounts, and pension plans. I think with a strong (overvalued) Swiss Franc, aggressively investing in foreign stocks makes a lot of sense these days.

Our net worth grew to about 650000 CHF, but, as another user said, this is nowhere near financial independence in Switzerland. I think we'll be able to retire in ten years, and then we won't need to live in such an expensive apartment. Right now, the apartment is a smart choice because it's in walking distance to our high-paying jobs and other things such as child care, grocercy stores, parks etc.

My top savings tips are:

  • live close to work, don't commute by car
  • buy and sell used stuff using Ricardo (like eBay) and OLX (like Craigslist)
  • get the cheapest phone, internet and TV plans possible (cellphone is paid by our employer)
  • use Skype for long-distance calls
  • buy "durable" groceries in large quantities in Germany
  • make your own bread, muesli etc.
  • bring lunch to work
  • don't eat out
  • exercise at home, avoid gym membership
  • cut your own hair (doen't work for women :))
  • avoid expensive bank accounts, credit cards, mutual funds
  • use LED light bulbs, kill standby consumption

What about you? What do you do to keep your expenses low? And do you think 6000 CHF is an outrageous monthly budget for a family of three?


Best regards,
Ralph

tensile

  • 5 O'Clock Shadow
  • *
  • Posts: 59
    • Podcast Pals
My absolute minimum spend is something like 2850 a month, and realistically I'm actually spending 3300. So a family of 3 for 6000 seems fine.

I just popped some numbers in a calculator - 650,000 growing at 5% and adding in 50,000 a year (all on the conservative side, let's hope) comes to 1.7m in ten years.

What's your goal?

Expatriate

  • 5 O'Clock Shadow
  • *
  • Posts: 40
Hi fellow Swiss residents! Decided to give this thread a small boost.

I 'met' MMM late 2013 when I had very little savings. The concepts took some time to take hold, but I started changing my finances mid 2014. While early retirement is not a goal in itself for me (though ~7 years away at this rate), the independence very much is. As my stash grew, so did my level of financial tranquility and overall ease in life and at work. Has been definitely worth it.

Situation:
  • Mid 30s, working in finance in Zürich, earning very well - but not extraordinary
  • In a relationship but with separate finances, no kids, sharing the cost of our flat & daily expenses
  • No car, so public transport and cycling whenever I can
  • I am an absolute travel addict
My expense pattern (breakdown below) is fully by choice and am very happy where I am, but feedback is always welcome :) For all US readers who'd like to put this in perspective: my basic cost of living is quite cheap for Zürich standards, and I think it's overall (also in terms of income) quite comparable to VHCOL cities in the US (SF, NY, etc).

Description
2017
    Monthly
Groceries
-1,624
-203
Drink & eat out
-3,664
-458
Purchases
-1,472
-184
Other daily
-440
-55
Rent & utilities
-8,464
-1,058
Healthcare
-2,096
-262
Transport
-1,352
-169
Other frequent
-520
-65
Travel
-10,080
-1,260
Durables
-2,704
-338
Other infrequent
-800
-100
Total expenses
-33,208
-4,151
After-tax income
83,740
10,468
Employer pension contributions   
10,254
1,282
Net cash flow
62,907
7,863
Savings rate
66.9%
FX & investment return
20,761
2,595

So... feel free to share :)
« Last Edit: September 03, 2017, 04:36:58 AM by Expatriate »