Borrowing with children: how to plan your family budget

Children change the budget, not just household size

Having children does not fundamentally rule out a loan. What matters is whether enough reliable income remains for repayment after necessary family expenses. Children must therefore be fully accounted for in the household calculation. A form that records both parents’ salaries but deducts only one adult’s costs shows misleadingly high capacity.

Start with the need: which purchase is necessary, when is it needed and what amount remains after using your own funds? Smaller financing may make more sense than the calculated maximum. Family expenses and working hours can change considerably during a multi-year term.

Record income without counting it twice

A shared household overview should include regularly available net salaries and other genuinely secure income. The legal credit assessment then determines which share is attributable to the applicant. A partner’s salary is not a freely available extra amount without living expenses of its own.

Child allowances may already be included in the amount paid on the payslip. Adding them separately again makes the budget too optimistic. The same applies to maintenance received and other income already included in a recorded total. Note what each net amount contains. The lender assesses actual eligibility for inclusion using the documents.

Include health insurance for the whole family

A joint family calculation must include health insurance premiums for every adult and child covered. One field may record the total, provided it clearly explains who is included. Premium subsidies must be deducted consistently. A bill already reduced must not be reduced again by the same subsidy.

Premiums do not cover all healthcare costs. Deductibles, co-payments, dental care and uncovered treatments can add to the personal budget. The statutory calculation follows the relevant rules for necessary additions; your personal caution may go further. A high deductible may save premiums but requires a corresponding available reserve.

Which other expenses are often missing

• Housing costs including actual ancillary charges.
• Necessary childcare, school meals and work-related travel costs.
• Maintenance for people outside the household.
• Existing loan, lease and instalment payment commitments.
• Irregular bills and foreseeable changes in daily life.

Cantonal guidelines provide basic allowances for children, sometimes differentiated by age. These do not automatically replace every additional expense. Conversely, costs already included in a basic allowance should not be deducted again indiscriminately in the statutory calculation. A transparent calculation identifies which items use allowances and which use actual documents.

A personal family budget may be more detailed. For example, spread an expected annual bill across months in your planning and set that amount aside. Otherwise, the month without the bill looks comfortable even though the money will be needed later. For childcare, also note whether the amount depends on working hours, subsidies or the child’s age.

Look beyond the current month

Planned reduced working hours may lower childcare costs while reducing income even more. A new job may pay more but involve longer journeys. Calculate such changes as a complete scenario. Taking only a favourable individual item while omitting adverse consequences is not reliable planning.

With shared care or different residential households, allocating costs is especially important. Children must not simply disappear from the budget because they spend some time in another household. Equally, the same maintenance payment must not be counted twice as an expense and a salary deduction already made. Have agreements and records of actual payments ready.

From the family budget to a credit decision

A positive surplus initially offers guidance. For a cash loan within the Consumer Credit Act (KKG), assessment follows the canton of residence’s rules and the statutory 36-month approach. The result of the borrowing capacity calculation therefore remains an indication until the information is verified.

If little reserve remains, first consider smaller purchases, spreading the project over time or saving up. For ongoing payment difficulties, budget or debt advice helps more than an additional instalment. Our guide to insufficient borrowing capacity explains how to reconcile needs and financial possibilities.

Frequently asked questions

Must children’s health insurance premiums be recorded?

Yes. If the budget represents the family, it includes the premiums of the children concerned. Totals already recorded are not added again.

May I add child allowances to net salary?

Only if they are not already included. The actual treatment is checked against the documents.

Does having a family automatically mean rejection?

No. The complete financial situation, affordability and lender’s criteria are decisive.

Sources and information date

Information as of 13 October 2026. The applicable rules, individual assessment and contract documents are decisive.

• Consumer Credit Act, Art. 28 and 31
• Canton Zurich: basic allowances for children and necessary additions

Credit must not be granted if it would lead to over-indebtedness. A budget calculation provides a non-binding indication, not a loan offer.