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Creating a budget

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In order to meet the savings goals you set, it's a good idea to establish where you're starting from, and how much you can afford to save. Creating a budget will help you do this.

By creating a budget you can:

  • Record income and expenses
    Helping you to get a clear picture of your current position
  • Control spending
    Helping to identify areas to cut back and increase opportunities to save
  • Establish new habits
    Helping you to avoid unnecessary spending and stay motivated to save
  • Feel in control
    Giving you the peace of mind that comes with taking control of your finances

There is a culture of household savings in China, and savings, as a percentage of GDP, is currently more than twice the world average.

How to create a simple budget

  1. Make a note of everything you spend each day, over the course of a month. If that sounds like too much work, review your account transactions in your bank and card statements. Include regular payments, such as your rent or mortgage, and utility bills, as well as irregular payments, like holidays, or the bills you only pay quarterly or once a year.
  2. Record all your sources of income, after tax. If your income varies from month to month, take an average over a 3-month period.
  3. Add up all your expenses and subtract this total from your monthly income.

If your expenses come to less than your take home pay, you have a surplus, which you can prioritise for paying off debts or putting into savings or investments. 

If your expenses come to more than your take home pay, you have less money at the end of the month than at the start. Before you can save on a regular basis, you should focus on ways to reduce your spending.

How to reduce spending?

If your budget indicates that your expenses are higher than your income, you might want to look at ways to reduce your spending. What might work for you? Could you:

  • switch insurance or utilities provider?
  • choose activities or days out in nature over those that cost money?
  • try going a whole day without spending any money? Or try a day a week?

How much should you save?

Everyone's circumstances are different, so there's no specific amount of money you should save each month. Your budget will help you determine what you can afford to put aside.

Some people find it helpful to follow the 50-30-20 model, where you aim to spend no more than 50% of your income on the things you need, 30% on the things you want, and 20% on building up savings or repaying debts.

HSBC China offers you a wide range of products and services for savings accounts and time deposits, empowering you to accumulate and manage your wealth with ease for all your future plans.

Learn more about deposit products and offers

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