The ultimate guide to budgeting, with tips and tricks that are hard to beat

The art of budgeting is not a dry exercise in juggling numbers; it is the key to taking control of your money and reaching your financial goals. This is not only about listing income and expenditure, but about drawing up a road map for your financial future. Your strategic goals are the engine that drives budget planning. They are the connection between what you want and the concrete steps you have to take to get there. Your budget is not a fixed path but a dynamic map, one you draw yourself on the basis of your ambitions and your planned activities. Because in the world of budgets there are no ready-made answers — here you are the architect of your own financial future!

So what exactly is a budget?

A budget is essentially a list in which you record your income and your expenditure. You note how much money comes in each month and what you spend it on. That lets you see at a glance whether you end the month in the black or in the red. Whether you want to draw up a budget for yourself, for your family, for your association or for your company, a budget is a useful way of getting an overview of your current financial situation. It is particularly useful when you want to save money, or when you are facing an important financial decision.

Below you will find a detailed guide to your budget – with or without VisualNumbers.

What is VisualNumbers?

VisualNumbers is a tool for budgeting and for planning a company’s future financial scenarios. Its basis is the company budget, which can be created and maintained in VisualNumbers easily and together with the employees and partners involved.

How do I create a budget?

1. Set your strategic goals Before you start on your budget, you should define clear financial goals. Do you want to reduce debt, save for a larger purchase, or simply make sure you stay within your means? Your goals will help you shape the budget accordingly and make clear which results should be in place by a given point in time.
2. Identify your income and revenue On a sheet of paper, in a Word document, in Excel or in a template, list all your sources of income. That might be your salary, any rental income or subsidies. Suitable table templates for different households are available from Budgetberatung Schweiz (in German). Various Excel budget templates from Microsoft are available as well. The budgeting tool VisualNumbers even lets you import your chart of accounts from bexio, from Excel, or from one of the standard templates for a Swiss association, foundation, limited liability company, public limited company or partnership, so that you can work through the budgeting process efficiently.
3. Identify your fixed costs In the same document, now list all your fixed monthly costs. These include rent, electricity, water, subscriptions or insurance premiums. What are fixed costs? Fixed costs are recurring expenses that stay constant over a given period, regardless of how much of a resource or service you use. Put differently, these are expenses that stay roughly the same whether you use more or less of a particular good or service.
4. Identify your variable costs Finally, list all the variable costs that can differ from month to month. These include food or transport, for example. This is usually where the real drains on your savings are hidden. What are variable costs? Variable costs are costs that are different every month — put more simply, all the rest. Variable costs include your spending on food or on clothing, but also on the unforeseen, such as illness or an accident. At the start of the month you do not yet know how high they will be, so you have to estimate them yourself. You can also look at the Budgetberatung Schweiz website (in German), where you will find suggested amounts.
5. Plan an emergency fund It is important to include an emergency fund in your budget. Set yourself a realistic target so that, over time, you have enough money available for unexpected costs.
6. Draw up the budget Now that you have identified all your income and expenditure, create a table — in Excel, for instance, or with a budgeting tool such as VisualNumbers — to list everything. In the first column you list all the income and expenditure items, and in the column beside it you enter your monthly budget. Not sure whether your figures for particular expenses are right? Then write down all your spending for three months. After that you can review your budget and adjust the figures. In the following twelve columns you record the actual spending per month. Finally you can have Excel, or the budgeting tool in question, calculate the difference between the budgeted and the actual figures. To draw up a budget with VisualNumbers, first log in at VisualNumbers and go to the “Charts of accounts” menu. Click the “Import chart of accounts” button at the top right. Now name your chart of accounts and choose your source (bexio, Excel, or one of the standard charts of accounts for an association, foundation, public limited company, limited liability company or partnership). Then create a new budget under the “Budget” menu. Here you can name your budget and choose your chart of accounts, the currency, the breakdown scale and the time period individually. You immediately get an overview of your chart of accounts as a table. Now you can fill in your budget figures as you like, attach documents to individual items, delete rows or add account details. Once you have filled in all the rows, close your budget. Your budget is ready!
7. Review and adjust Regular budget reviews are essential. Monthly reviews help you spot deviations and make adjustments. If you find you are spending too much in one category, consider how you could reduce that spending.
8. Keep your discipline A budget only works if you stay disciplined. Stick to your financial goals, and be prepared to make adjustments when your financial situation changes.

Other VisualNumbers features

• VisualNumbers also generates an income statement automatically.
• Comparison figures can be added to the budget from bexio, from Excel or as an empty column (which you can fill in yourself at a later step) in order to create a budget-versus-actual comparison.
• Would you also like to build a scenario? No problem: with VisualNumbers you can simulate complex scenarios easily.

We hope you enjoy drawing up your own budget.

Any questions? Then get in touch.