Compulsory expenses, accommodation and transport: these are the main spending items for a Swiss household. Compared to other countries, the Swiss are distinguished above all by a high savings ratio. However, the title of world savings champion is held, by a wide margin, by another country.

Generally speaking, the Swiss are earning more and more. In 2018, the median income for a Swiss household was CHF 10,114 per month. This is almost 200 francs more than the previous year, and 1,500 more than in 2006, the year the current data collection method was first used.

Three quarters of income comes from paid employment, while pensions and social benefits contribute approximately one fifth of the gross income of an average household of 2.2 people. In contrast, income from assets plays almost no role for the vast majority of households, as a study recently published External Link External Link by the Federal Statistical Office External Link shows.

A third in compulsory expenses

It is also interesting to know the destination of the money spent by families. Almost a third of gross income goes to paying taxes to the various tax authorities, social security and health insurance. These compulsory expenses have grown since 2006 in an excessive way, with an increase of almost 27%.

After deducting these expenses, an average household still has 7,069 francs a month. However, not everyone living in Switzerland has this amount of money. About 60% of households have to get by on less than the median disposable income.

At just under 1,500 francs a month, housing is the largest item of voluntary spending. If the costs of decorating and furnishing and maintaining the house are added, the amount assigned to housing increases to 1,700 francs per month.

Transportation is also very expensive for households. The Swiss spend more than 750 francs a month on cars, motorbikes, trains, planes, bicycles and other means of transport. Cars account for by far the largest share of this spending. Transportation is the second budget item after housing.

Food is getting cheaper

Food is only in third place, with 730 francs a month. Here we can also observe a recurring phenomenon in other countries. The higher the income, the lower the part spent on food. For Switzerland, this means the following in concrete terms: in 2006, Swiss households spent 8.6% of their gross income on food, in 2018 only 7.3%.

It is therefore not surprising that within the European Union (EU) Romania is the country with the highest proportion of consumption destined for food (data from 2017). In this EU country, with the second lowest per capita income in purchasing power parity, more than a third of consumer spending goes to food, beverages and tobacco.

On the other hand, in the United Kingdom, which is the EU country where this category represents the lowest part of consumer spending, only about 14% goes to food, the same as in Switzerland.

On the other hand, people in rich countries spend more money on luxury items and goods. In Great Britain, for example, 15% of consumer spending goes to cultural and leisure activities. Of course, the British clearly value their free time more than the Swiss: in Switzerland, only around 10% of consumer spending goes to culture and leisure.

However, there are also notable exceptions to this general rule within Europe. Economics professor Galina Kolev from the German Institute for Economics in Cologne talks about regional preferences. For example, it is surprising that the part spent on catering in Greece is approximately three times higher than in Germany.

1,589 francs earmarked for luxury

But back to Switzerland: out of 10,114 francs of initial gross income, an average household, after spending 5,296 francs on consumption, 2,872 francs on compulsory spending and 357 francs in other expenses such as donations and insurance, you still have 1,589 francs a month for savings, or around 16% of gross income.

With this proportion of savings, Switzerland regularly ranks among the leaders internationally, alongside countries such as Sweden, Luxembourg and Germany. However, China, with a savings rate of close to 40%, is in the lead, well ahead of everyone else.

Translation from German: José M. Wolff