Saving: The Most Basic Principle of Personal Finance

Starting your journey as a university student or a young professional is an exciting time filled with new opportunities. Many of you may have moved to a new country, setting high expectations for your life abroad. Perhaps you envisioned cooking nutritious meals, staying active, studying diligently, and still having time for socializing. Fast forward a few months, and reality often looks different: exams bring stress, exercise takes a backseat, takeout becomes the norm, and your bank account feels emptier than expected.

This is a common experience, and it’s okay. Managing your finances can feel overwhelming, but having solid financial principles can help you navigate adulthood and set the foundation for a stable financial future. This blog series is here to guide you through the essentials, providing practical tips to develop smart saving habits. Let’s dive into how you can better manage your budget as a student or young professional in Europe.

The first step in taking control of your finances is understanding where your money goes. Track your expenses and divide them into key categories:

• ‍Housing: Rent is likely your biggest expense. Make sure it fits within your budget.

• Utilities: Don’t forget about electricity, heating, water, and any local taxes. These small costs add up quickly.

• Groceries: Food expenses can fluctuate, so it’s important to monitor your spending here.

• Transportation: Public transport can be costly if you’re not careful. In many European cities, you can save with transportation passes or discount memberships. For example, look for monthly or student travel discounts offered in your region.

• Leisure and Entertainment: It’s important to enjoy your free time, but dining out, events, and nightlife can get expensive. Set a monthly limit and stick to it.

By creating a realistic budget and reviewing it regularly, you can ensure that your income covers all necessary expenses while leaving room for savings and fun.

If you’ve recently moved to a new country, opening a local bank account is essential. It simplifies receiving payments, such as salaries or grants, and helps avoid unnecessary international fees. Look for banks that offer low-cost or student-friendly accounts tailored to young adults. These often come with features like free withdrawals or discounted service fees.

Groceries can be one of the easiest areas to overspend, but small changes can make a big difference:

• Shop at Discount Supermarkets: Look for budget-friendly chains such as Lidl, Aldi, or other regional alternatives. While more upscale supermarkets may be convenient, they often come with higher prices.

• Plan Ahead: Create a shopping list and stick to it. Impulse purchases are the enemy of smart spending.

• Buy in Bulk: Essentials like rice, pasta, or canned goods are cheaper in large quantities. Stock up on these items during sales to save even more.

• Use Apps for Discounts: Most supermarkets have apps that provide updates on weekly deals and loyalty rewards. Make the most of these tools to stretch your budget further.

Whether you’re a student or just starting your career, having an additional source of income can ease financial pressure. Popular part-time jobs include working in cafés, restaurants, retail, or as a teaching assistant. For those in the EU/EEA, there may also be government financial support available:

• Basic Grants or Subsidies: Some countries offer grants or subsidies for students who work a certain number of hours each month. Check your local guidelines.

• Travel Discounts: Many regions provide free or discounted public transportation for students. Investigate options that might apply to you.

• Scholarships or Family Support: If your family’s income meets certain criteria, you may be eligible for additional grants or assistance.

Check government or university websites for details specific to your location.

Living independently abroad, whether as a student or a young employee, can be both thrilling and challenging. Managing your finances effectively ensures you can make the most of this exciting phase of life. By budgeting, saving smartly, and finding ways to increase your income, you’ll reduce financial stress and gain confidence in your financial future.Remember, it’s not about cutting out every indulgence but finding balance. Treat yourself occasionally, but stay mindful of your spending. With a bit of planning, discipline, and a proactive mindset, you can enjoy your independence and set yourself up for long-term success.