Goodbye, piggy bank! How to invest money wisely as a family

Risky, complicated, only for rich people … There are a lot of prejudices about investing money. However, it is worthwhile, especially for young families, to invest their money and to take private measures, instead of just saving. Here we explain why it is high time to start thinking about investing money and how you can find your way around, even as a beginner.

With the first baby usually comes great caution. After all, we don’t want to take any more unnecessary risks, but want to give our little ones safety and security and also take a little more care of ourselves in order to enjoy our family happiness for as long as possible. Many young families therefore simply park their money in a savings account instead of investing it – and thus feel safe, but miss the opportunity to make more out of the family’s money and to provide for the future. As long as the inflation rate is higher than the interest rate on savings, the money in the savings account is gradually eaten away by inflation. 

How? Our money is continually losing value: if a cup of coffee in Switzerland cost an average of CHF 3.93 ten years ago, today it costs CHF 4.30. That doesn’t sound much, but it soon adds up. And that’s exactly how it works with the money in your savings account. Savings remain dormant and thus lose more and more of their value. This makes it all the more important for families to get more out of their money – and that can be done without taking major risks. 

Provisions for families: 3rd pillar has 1st priority

Private pension provision is particularly relevant in Switzerland. Of course, people who work already save for their retirement with the 1st pillar (state pension) and the 2nd pillar (occupational pension). However, these contributions will hardly be enough to maintain the accustomed standard of living after retirement – and after all, we want to enjoy our retirement! In addition, the payments to the 3rd pillar can be claimed for tax purposes and the tax burden for your family is therefore lower. So, whenever possible, you should pay in the maximum amount – regardless of whether and how much you work. This is also the easiest way to get more out of your money. You can pay money that is in your 3rd Pillar account into a pension fund – and thereby benefit from higher return opportunities. As your money usually stays in your 3rd Pillar account for a long time, it is particularly well suited for investments. If you have a long-term investment horizon (more than 10 years), you can better compensate for short-term interest rate fluctuations on the market and thereby usually take a smaller risk than with short-term investments. 

If you want to minimise your risk, you can invest in funds that comply with the BVG guidelines and therefore invest a maximum of 50% in shares. In this way, you not only provide for your retirement but can also easily profit from developments on the financial market.

Investing money for children: regularity pays off

How do we give our children the best possible start in life? This is a question most parents ask themselves. From a purely financial point of view, it pays to start investing for your children when they are still very young. Parents who invest wisely for their children can help them realise some of their dreams later on – be it the driving test, university studies, a trip around the world or their first flat. Regular investments are particularly suitable for this. These can be payments into funds or ETFs, for example always on birthdays and at Christmas. Most Swiss banks now also offer fund savings plans in which a fixed amount is paid into a fund every month or every six months. You don’t have to be rich to do this: Even regular payments of CHF 50 or 100 are worthwhile. That is because with regular investments, the compound interest effect helps. If the interest earned is invested again and again instead of being paid out, the return increases proportionately. 

Achieving great things even with little money

“Small contributions” is the keyword for many young families. After all, family life in Switzerland can be quite expensive. But precisely because everything is becoming more and more expensive, it is worth investing money instead of letting it languish in a savings account and being rewarded with low interest rates. Which investment forms are best suited depends entirely on your goals and needs and your financial situation. With most investments, however, it helps if you can invest over as long a period as possible – which makes it all the more important to start investing early.

Invest money monthly or rather all at once?

If you can put some money aside each month, you should consider the fund savings plan mentioned above. Those who prefer to invest an amount all at once can also do so with just a few thousand francs. And families who are always short of money at the end of the month can find our best savings tips here . Awina supports you exactly at the time when you need a lot of support: when everything is happening at once. Starting a family, partnership, career, self-care, finances – everything is equally important and happening at the same time? Then you are in the middle of the “rush hour of life“. A very stressful time! It is precisely at this time that you need to decide how you want to handle your finances as a family in order to make the future as easy as possible for you and your children. 

Investing sustainably – for your wallet and the environment

Making a better future for our children can also mean investing sustainably. After all, by investing money, we give companies the capital they need to do business and support their economic activity. Just as with the consumer decisions we make every day, we can also give preference to sustainable companies via our investment decisions. In the meantime, there are also many opportunities in Switzerland to invest money according to sustainable criteria (ESG criteria). In this way, young families don’t only generate returns, but also promote the very issues that are particularly close to their hearts – and thereby also make the world a little better.

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