1. Calculate your savings capacity
1. Calculate your income
Revenue from investments (rent, interest, etc.)
Be careful when your income is irregular… Don’t be too optimistic when calculating your income.
2. Calculate your expenses
A. Add up all of your regular expenses.
Regular expenses =
Loan and credit payments
Water / electricity / gas
TV and internet subscriptions
B. Add in your non-monthly expenses: insurance, car expenses, taxes, gifts, holidays, etc.
-> The difference between your income (1) and your expenses (2A,2B) is the amount you can save.
A little rule of thumb
To help you make your budget, keep in mind this simple breakdown:
for fixed expenses (housing, transport, taxes, insurance)
for variable expenses (food, healthcare, clothing)
for annual expenses (birthdays, Christmas)
What should you do when your expenses are greater than your income?
It’s time to find new sources of income or reduce your expenses.
Check your subscriptions : magazines, newspapers, music or video streaming services, etc. Are you really using them?
Contact your phone/TV/internet provider: does your plan fit your actual needs? Do you need so much data? So many TV channels?
Be careful with your energy expenses: avoid unnecessary heating, turn off lights and shut off taps as much as possible.
Consider carpooling, public transport (free in Luxembourg), or cycling to get to work and save on your petrol and parking expenses.