Money has been a part of our lives since we were young. From the first coins we put in the piggy bank, the money our grandparents gave us on our birthday, our first summer job, the help of our parents to satisfy our first whims… And suddenly, comes the age in which, among many other changes, for the first time we have control over our money. But have we been taught about how to manage our money? Will we be able to become independent, to have enough resources until the end of the month? The answer is yes, it’s up to us to control all of this, and it only takes a little bit of organisation to get the most out of it.
- Why do we need money?
The first stereotype about money we have to break is comparing ourselves to others. Calculating what we have or earn myself compared to other people around us is neither objective nor realistic. Everyone is born and raised in certain conditions and many of them are out of our control or influence. If you’re studying and you’re just starting to figure out what your life will be like, take the pressure off yourself, because nothing is written, and the important thing is not where you start from but where you are going to arrive. So, the first thing to do is to analyse the current situation and determine our medium-term goal. Living at home with our parents and focusing on our studies will not be the same as having the willingness to become independent, although to achieve this we have to invest part of our time working. Determining this will lead us to the next question: how much money do I need to live?
At this point, we need to start playing with our finances and differentiate between fixed and variable expenses, just as companies do. Fixed expenses are there every month whether we want it or not, such as the rent of the flat, the gym, the transport card, or a Spotify subscription. Variable expenses are those whose amount can vary from one month to another depending on our needs. For example, although food is essential, we do not spend the same one month and the next, and this is precisely one of the points where we can cut on expenses. By this we do not mean stopping eating or only buying the cheapest products on the market, regardless of their quality. Rather, we mean the opposite: focus on responsible consumption.
- How can I reduce my monthly spending?
One only has to look at the current environment to see that consumer trends, that is, the type of purchase that most of the society makes, are changing, and more and more people seek local products, more quality, and less quantity, instead of buying in large industrialised superstores. These small changes allow us to make conscious purchases, prioritizing only the products we need and taking care of our health and economy at the same time. An example that we can apply to our daily lives could be to drink water in reusable containers (glass or metal bottles) and thus avoid the daily purchase of water bottles, replacing them with larger bottles that are cheaper and last longer.
We can do the same at the time of purchase, carrying our bag to avoid buying plastic bags. Another useful trick can be to organize our weekly menu to know what we will eat each day and therefore planning beforehand what we need to buy. Nothing more and nothing less. When it comes to hygiene products, we can opt for family packages, that imply more quantity for less money, or alternatives such as soap bars or menstrual cups that, in addition to being cheap, do not generate waste. There are also bulk stores where you can buy only the amount you need, whether for groceries or cleaning products. Research your area and look for the option that best suits your pocket, always remembering that what has always been done, or what most people do, is not always the best option for you.
With regard to transport, it is also necessary to look for this balance and consider alternatives to private transport, which means a higher cost if we add petrol, taxes, insurance and car repairs. Public transportation or cycling are two inexpensive options that can help us control our spending while caring for the environment. Even when going out we can cut expenses if we act conscientiously. Booking in advance, taking advantage of offers and discounts, or establishing the amount we want to spend before the night starts will help us keep some control. If the latter part is the most difficult, a trick can be to carry only the amount we want to spend. That way, there will be no room to go over budget and this will allow us to better manage the nights out , without spending a single more euro than we planned.
- Monitor your finances from your mobile phone
These are some of the recommendations that will help us keep track of our savings, but the important task is to analyse our particular situation and ask ourselves the following questions: What income do I have? How much should I spend on fixed expenses? What do I have left for leisure? Do I need to save for the future?
Our main advantage is that there are currently applications for almost everything. Controlling our finances has never been so easy. Most banks have been pulling up their socks for years so that the new digital customer experience is intuitive and agile. In a single click, we have at our disposal all the information we want, from the total balance of the account (the money we have), to the expenses we have made with the card, seeing graphically where we are spending most of our money. This will allow us to get an idea of our current situation and where we need to direct future efforts.
- Work and save, our two greatest allies to have money
A key tool for managing our savings are digital piggy banks, a secondary account where we will put the money we want to spend on a specific activity. The operation is simple: we have to set a goal, be it a trip or something we want to buy, and from there we calculate how much we would have to deposit each month. We need to find a balance between what we want and our current resources. If we want more money, we will have to work harder. If we can’t work harder, we need to manage it more efficiently. Whatever our situation, taking control of our finances and knowing at all times what is happening in our bank account is a must.
Our last piece of advice is to keep in mind that we never walk alone. We have parents, family, and a lot of people around who can help us understand what all that money has to do with, which is ultimately about understanding how the world works today. Having their support and following their advice is an indispensable pillar for this first contact with the world of finance to be clear and understandable. When we take control of our money, we take control of our lives.